The Nigerian Electricity Regulatory Commission and the Manufacturers Association of Nigeria have inaugurated an eight-man task team to fashion out ways to increase power supply to the industries through establishment of micro grids to capture embedded power
| By Anayo Ezugwu | Oct 19, 2015 @ 01:00 GMT |
THE Nigerian Electricity Regulatory Commission, NERC, and the Manufacturers Association of Nigeria, MAN, on Tuesday, October 6, are working out modalities to upgrade the quantity of electricity supplied to industries across the country. In this regard, NERC and MAN have inaugurated an eight man team to fine tune the processes for the establishment of the micro grids for capturing embedded power which will be supplied to the industries.
Sam Amadi, chairman, NERC while inaugurating the team, said it evolved from the need for the country’s power sector to effectively support Nigeria’s efforts at industrialisation by increasing the amount of energy supplied to industries. NERC had in the past made critical regulations to encourage off-grid electricity supply to industrial clusters in the country. Amadi stressed that the partnership with MAN would reactivate such regulations and helped develop social and regulatory frameworks to boost industrialisation.
“Few months ago, we thought about how to support industrialisation by increasing energy supply to industries thereby reducing the cost of doing business. I do know that energy accounts for 40 percent of cost production which is a huge drag on profitability, industrial capacity as well as global competitiveness of Nigerian manufacturers.
“NERC has always thought about how we could unleash the industrial potentials by meeting the power supply needs of the industries. We established the embedded generation regulation, the independent distribution network regulation and the independent transmission network regulation. These three critical regulations were aimed at helping to deal with providing some kind of modular power both for off-grid and for rural clusters. And towards the end of last year, we started thinking of how we can innovate these regulations to help industrial clusters,” he said.
While clarifying the choice of MAN as a partner to help drive the embedded generation plan, Amadi said: “We found a ready and willing partner in MAN, so we have been collaborating, thinking through how we can drive this process. We have been having meetings with MAN in the past and this culminated in the setting up of a committee, a task team, to help us think around the regulatory, technical, financial and social issues around providing steady power supply to the industries through the micro grid for the industrial clusters initiative.”
According to him, the team has a thematic term of reference that include developing a policy and regulatory framework for viable and feasible micro grid for industrial clusters; develop business models for prioritising the financial viability of micro grid technologies within existing framework; identify relevant stakeholders and key interest groups and describe what they will likely contribute to the micro grid industrial cluster initiative; as well as develop a framework for grid interface, evacuation agreement and purchase obligation.
Other areas of interest that the team will work on are: developing a framework that encourages renewable energy sources based projects; developing a framework for third party sale and captive use; identifying eligible existing incentives and applicability of incentives and designing special concession for innovative micro-grid projects that converts waste to energy.
Similarly, Frank Udemba Jacobs, president, MAN, explained that energy accounts for 40 percent of cost of production for industries in Nigeria, adding that the new effort could have a far-reaching impact on the cost of production in the country. He, who however, charged the task team to complete their work within one week.
Nigeria’s attempts at industrialisation has been held back by lack of electricity. This is why Jacob sees any initiative or innovation that will assist us in reducing the cost of power supply to the industries as highly welcome.
MAN and NERC had in August this year agreed to work together in order to drive electricity regulator’s plan of growing investments in embedded and captive electricity generation in the country. Both parties agreed on the need to create a framework for the creation of micro grid for industrial clusters across the country, as well as driving same with a Special Purpose Vehicle, SPV, that could be created by MAN.