30 July 2016, Sweetcrude, Abuja – The Federal government has approved an entry price for solar power operators, as part of its pledge of promoting the development of renewable energy in the country.
The long-awaited entry solar sale price is expected to give further impetus for investment in the renewable energy sector, especially in the solar sub-sector, as well as boost the operations of companies that are already exploring solar energy resources as an alternative to gas and hydro-powered plants in the country.
The Nigerian Bulk Electricity Trading Company (NBET) has finally reached an agreement with solar developers, endorsing $11.5 cents down from $23 cents per kilowatt hour (kWh) for solar energy sale price.
A team of solar developers comprising 14 pioneers are collectively expected to generate 1,125MW of electricity, which will be distributed to the grid through a stepped down transmission network to enable them to minimise levels of transmission losses.
The Managing of NBET, Mr. Waziri Bintube noted that “Working in concert with our advisers, NBET developed a form solar Power Purchase Agreement (PPA) to be used in negotiations with these solar power developers.
“In the course of negotiations, NBET made it quite clear from the onset that it was not ready to offer any developer the MYTO II tariff as published by the Nigerian Electricity Regulatory Commission (NERC).”
He added that “By early 2015, after protracted negotiations and aggressive price discovery on the part of NBET, a consensus was reached around a wholesale solar tariff of 23 cents per kWh. The general elections of 2015 and the attendant anxieties led to a lull in the industry.”
Bintube noted that “Following negotiations and positive support from the ministry of power, works and housing, NBET finally agreed with 14 frontline developers to an internationally accepted rate of $11.5 cents (about N30) per kWh, which is less than half of the MYTO II tariff.
“The PPAs with the 14 developers who have agreed to this tariff were initialled on 4 July 2016.”
He further observed that additional regulatory requirements for the projects have been procured and there are no longer impediments to the promoters achieving their financial closures and mobilising to site.
“The PPAs, after initialling, were sent to the regulatory agencies for approval. The necessary approvals have been obtained and we are here today to formally sign the PPAs.
“It is our hope and expectation that following today’s ceremony, the developers will quickly push their projects to financial close and commence construction in a few months’ time,” he added.