18 August 2015, Abuja – Strong indications emerged that the Nigerian Electricity Regulatory Commission, NERC, and the Nigerian Bulk Electricity Trading Company, NBET, may be heading on a collision over the decision of the former to introduce new regulations on renewable energy.
The NERC had last week presented to power sector stakeholders a consultation paper on the draft feed-in tariff regulations on renewable energy electricity in Nigeria. The policy was designed to promote generation of electricity from renewable energy sources by allowing power producers to sell renewable energy sourced electricity to distributors at a predetermined fixed tariff over a guaranteed period of time, usually from 20 to 35 years.
The idea for the new policy, NERC said is that the government wants at least 10 per cent of electricity generation in the country to come from renewable energy by the year 2020. According to the presentation, NERC already made cost assumptions on renewable energy sources from Wind, Bio-mass, Solar among others.
But the NBET’s representative at the programme, Mr. Demvihim Tsumba, noted that the document lacked specifics, adding that the regulatory agency was assuming the position of the off-taker as well as the regulator at the same time. Tsumba, who is a senior counsel with NBET, picked holes with the new policy, asking, “Why is the Commission taking the position of the off-taker?” adding that the document is not enough because it lacked specifics and could not be fully understood by the Bulk Trader at the time.
But NERC said the Federal Government would produce renewable energy of about 20,000 megawatts which would be injected into the National Grid by 2020. Principal Manager, Renewable Energy Research Unit, of NERC Mr Abdulsalam Yusuf, made the disclosure in Abuja at public consultation forum held by NERC for draft regulations, smart metering and estimated billing.
According to Yusuf, 1000mw of renewable is to be injected into the grid by 2018, while the remaining 19,000mw would be injected before the end of year, 2020. He listed the ratios of these targeted grid renewable energy as follows: solar 387mw, wind 412mw, small hydro power 675, and Biomass 526mw, totalling 20,000mw.
Yusuf said that to acquire these renewable energy, the NBET would procure about 50 per cent while the distribution companies would get the other 50 per cent.
Yusuf said that there are many positive attributes of generating electricity from renewable energy sources, which include environmental concerns, energy security, and off grid supply to small isolated loads especially in rural areas where conventional electricity supply was not feasible.
He said that renewable energy has friendly policies such as pricing, feed-in tariff, net metering, competitive bidding as well as capacity based policy. Yusuf also argued that part of the objectives of renewable energy policy is to ensure that private investors were mobilised into the sector as well provide revenue security and market stability for the investors.
He said that another objective was to reduce transaction and administrative costs associated with the conventional bidding processes in the small project.