02 November 2015, Sweetcrude, Abuja – Nigeria’s dream of generating more megawatts of electricity received a boost, following the Nigerian Electricity Regulatory Commission, NERC,’s approval of a regulation to stimulate investments in 2,000mw from renewable energy sources by 2020.
The regulation, Feed-in Tariff Regulations for Renewable Energy Sourced Electricity in Nigeria, which was approved at the Commission’s last regulatory meeting, envisaged that the country would generate at least 1,000mw from renewable energy sources by 2018.
The Chairman of NERC, Dr. Sam Amadi, who spoke to journalists about the new proposal, said: “With this regulation, we have been able to unlock further investment potentials in the country’s power sector. Its major objective is to diversify our sources of electricity, and take advantage of our options.”
He noted that the regulation expects electricity distribution companies to procure 50 percent of the projected renewable sourced electricity, while the Nigerian Bulk
Electricity Trading Company (NBET) is expected to procure the balance of 50 percent.
Renewable energy sources are electricity generated from biomass, small hydro, wind and solar energy sources.
Meanwhile, the regulation specifies capacity for renewable plant should be between 1mw and 30mw.
But plants that are above the aforementioned threshold will require additional conditions other those already specified in the regulation.
The regulation stipulates as follows: “The provisions of these regulations shall apply to all qualifying renewable energy sourced electricity of capacity above 1mw and smaller than 30mw at a site that is connected to the transmission grid, or the distribution network. For large renewable (30mw and above), integrated resource planning will be carried out before the NERC will initiate a competitive bid process”.
The buyer will, after this, solicit bids and purchase at the most cost effective based on the optimal technology available at the location.
The law allots maximum amount of renewable sourced electricity an electricity distribution can have on its network based on the optimal potential available in their franchised areas.
This provision of the law is to achieve right mix of energy for the Disco, as well as protect electricity consumers from spike in tariff.
For instance, the regulation allots higher volume of biomass 26mw, 22mw and 19mw to
Ikeja, Ibadan and Eko electricity distribution companies, respectively, whereas Abuja Disco has highest of wind sourced electricity at 14.4mw, while Port Harcourt has 11.4mw of biomass and 6.5mw of wind sourced electricity.
However, Kaduna and Kano discos have highest allotments of solar sourced electricity than other discos at 12mw, with small hydro at 10mw and biomass at 6mw apiece.
The regulation specifies that provisions of Distribution Code will apply to embedded generation, while Grid Code will apply to those that will use the transmission network to transport their electricity.
Embedded generation is a power plant whose electricity is used within the distribution network, where it is generated without using the transmission network.
Useful life of every renewable power plant is fixed at 20 years by the law, which expects recovery of the plant and that generators have obligations to ensure that their source of energy is credible.
“NERC shall be responsible for regulations of feed-in-tariff, whereas NBET serves as counterparty to power purchase agreement (PPA) with renewable energy project developers,” the law added.