NERC okays mini-grids for power firms

NERC10 October 2016, Lagos – Power distribution firms will soon begin the development of mini-grids to augment electricity supply to households, businesses and institutions in the country, the Nigerian Electricity Regulatory Commission has said.

This came amid a report from the System Operator that the total electricity generation in the country dropped to 3,894.40MW as of 6am on Friday, from 4,229MW recorded on October 2. The nation achieved its peak generation of 5,074.70MW on February 2, 2016, according to the Transmission Company of Nigeria.

NERC said in a Draft Mini-Grid Regulation 2016 obtained by one of our correspondents on Friday that electricity distribution companies could now use mini-grids as a bridge technology to accelerate their electrification activities.

NERC said the mini-grid regulation was specifically designed to accelerate electrification in areas without any existing distribution grid and areas with an existing but poorly electrified or non-functional distribution grid, especially but not limited to rural areas.

Mini-grid means any electricity supply system with its own power generation capacity, supplying electricity to more than one customer and which can operate in isolation from or be connected to a distribution licencee’s network.

Within the regulations, the term mini-grid is used for any isolated or interconnected mini-grid generating between zero kilowatt and one megawatt of generation capacity.

NERC said, “If the power distributed by the isolated mini-grid is larger than 100 kW, the mini-grid developer will need to apply for a mandatory permit. If the generation capacity of the power station installed is larger than 1MW, the plant is not a mini-grid under this regulation and other regulations apply.”

To encourage mini-grid development, the commission said cost-reflective retail tariffs would be utilised, adding that tariffs would be higher than the current electricity distribution company’s retail tariffs.

The commission, however, said the tariffs would be lower than any electricity supply of the same quality generated from conventional sources in such areas.

It said, “This regulation is suitable for any business model or technology that mini-grid operators may wish to implement.

“The DisCos stand to benefit from mini-grid operations and some of these benefits include the development of the DisCos’ licensing areas, which are not being exploited at no cost to the DisCos pending when they are ready to extend their operations to such areas. At such time, demand would have increased to attractive levels for profitable operation, and customers will be used to paying for electricity and complying with the safety requirements.”

Meanwhile, the African Development Bank has launched a Green Mini-Grid Help Desk to facilitate the provision of renewable power to rural African communities.

A total of 645 million Africans, nearly 60 per cent of the continent’s population, are said not to have access to electricity.

The GMG help desk was unveiled during the 3rd International Off-Grid Renewable Energy Conference held in Nairobi, Kenya.

A report from the website of the AfDB on Friday stated, “The GMG Help Desk provides online technical assistance on the myriad of activities important to the business cycle of developing and operating a clean energy mini-grid.”

It added that the help desk was part of the larger Green Mini Grid Market Development Programme implemented by the SE4All Africa Hub and funded through the AfDB’s Sustainable Energy Fund for Africa.

The report quoted the Coordinator, SE4All Africa Hub, Dr. Daniel-Alexander Schroth, as saying, “Mini-grids are a key piece of the energy access puzzle in Sub-Saharan Africa and the GMG Help Desk will be a key tool to accelerate the deployment of private sector-led mini-grid projects in support of the New Deal on Energy for Africa’s vision of universal energy access in Africa by 2025.”


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