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NERC woos manufacturers on embedded generation

By on August 5, 2015

The Nigerian Electricity Regulatory Commission (NERC) has expressed its desire for the members of the Manufacturers Association of Nigeria (MAN) to drive its plan to grow investments in embedded and captive electricity generation in Nigeria.

NERC said at a recent meeting with top management of MAN led by its president, Dr. Frank Udemba Jacobs that it would welcome a partnership with the association to develop embedded power generation in industrial clusters around the country.

Both parties however agreed on the need to create a framework for the creation of micro grid for industrial clusters across the country, as well as driving same with a Special Purpose Vehicle (SPV) that could be created by MAN.

NERC and MAN in this regard decided to set up a committee that would understudy and address possible challenges posed to industrial productivity and the country’s broader economic goals as it relates to power.

The committee will also plan how to develop and dedicate small grids that can be connected to large distribution grid to industrial clusters.

Chairman of NERC, Dr. Sam Amadi said in his remarks at the meeting that the Commission had briefed the Vice President, Prof. Yemi Osinbanjo on the objective of the meeting, which is to make power available to industrial clusters in a reliable and quickest possible approach.

He noted that amongst the options that are being considered are an arrangement to upgrade licences of captive electricity generators with excess capacities to supply firms within their vicinity through commercial arrangements that would be jointly beneficial to the electricity distribution companies and the industries.

Amadi equally stated that MAN could take up the options of developing small embedded power plants using the huge coal deposits that are found across Nigeria.

According to him, investments in such small size coal-powered plants could be quite economical for MAN to promote especially amongst its members in industrial clusters with good coal deposits.

He further explained that the establishment of micro grid could be, “beneficial as it will provide commercially viable electricity to industries and free grid electricity that goes to industries for residential and other consumers.”

The meeting also revealed that a technical committee with nominations from the Commission will be set up and coordinated by MAN since its members will be the main beneficiary of stable and adequate electricity supply.

The committee it is learnt, is expected to develop the framework that would provide alternatives solutions to associated financial and technical impediments to realising the objective.

The framework on the micro grid is also expected to adapt to NERC’s regulations on embedded generation, which is applicable when electricity is generated and consumed within a distribution network as well as similar regulation on independent electricity distribution network, which permits development of electricity distribution to an area yet to be developed by a distribution company.

A major approach being suggested would entail mobilising industrial clusters to establish a special purpose vehicle that will secure equity participation of members in a cluster and access project finance to sponsor modular power plants using networks of electricity distribution at mutually beneficial financial terms. The committee is expected to submit its recommendation within four weeks.

 

[ThisDay]