Power: NERC drafts regulation for mini-grids

Energy Crisis Threatens the Western Power GridsKunle Kalejaye 04 October 2016, Sweetcrude, Lagos – In a bid to ensure effective regulation of the power generation in the country, the Nigerian Electricity Regulatory Commission, NERC, has produced a draft regulation for mini-grids.

The objective of the 140-page regulation, according to NERC, is to accelerate electrification in areas without existing distribution network and areas with existing but poorly electrified or non-functional distribution grid.

It is also aimed at attracting participation of private sector, communities, non-governmental organisations in achieving nationwide electrification.

The regulation seeks to minimise major risks associated with mini-rid investments such as sudden tariff changes, as tariffs would have been agreed in advance by the relevant parties; and  stranded mini-grid operator investments due to extension of main grid to cover the mini-grid area.

In such cases, NERC said a fair compensation mechanism would be applied for mini-grid operators that choose to exit.

The regulation provides for permit and tariff approval procedures which will ease the administrative burden on the mini-grid operator and ensure the process of obtaining the permit in a timely manner.

The distributed power of the mini-grid determines the regulatory procedure to be followed, NERC stated.

“For distributed power of up to 100kW, a permit is optional for the mini-grid operator; while for distributed power of over 100kW and installed generation capacity of up to 1MW, a permit will be required.

“Beyond that limit, a full licence is required which is outside of the scope of this regulation and is taken care of by other already existing regulations,” NERC said.

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