NERC Targets 2,000MW from Renewable Energy Sources

Fri, Nov 6, 2015
By publisher
4 MIN READ

BREAKING NEWS, Power

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A new regulation approved by the Nigerian Electricity Regulatory Commission targets generating 2000 megawatts of electricity in the country from renewable energy sources

By Anayo Ezugwu  |  Nov 16, 2015 @ 01:00 GMT  |

THE Nigerian Electricity Regulatory Commission, NERC, has approved the application of a new regulation that would give Nigeria up to 2000 megawatts, MW, of electricity generated from renewable energy sources in the next five years from now. The new regulation is expected to stimulate investments into the renewable energy sector in the country. The new regulation entitled: “Feed-in tariff regulations for renewable energy sourced electricity in Nigeria” was reportedly approved at the last regulatory meeting of the commission.

A statement from Usman Arabi, head, public communication, NERC, on Sunday, November 1, explained that the commission envisaged that the country would generate at least 1000MW of electricity from the various renewable energy sources that she’s endowed with by 2018. The balance, it however hopes, would be realised by 2020. Renewable energy sources are electricity generated from biomass, small hydro, wind and solar energy sources, amongst others.

According to the statement, Sam Amadi, chairman of the commission, noted that: “With this regulation, we have been able to unlock further investment potential in the country’s power sector.  Its major objective is to diversify our sources of electricity and take advantage of our options.”

Amadi said 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. The regulation also specifies that the capacity for renewable plant for use in the sector should be between one and 30MW. Plants above this threshold will require additional conditions other than those already specified in the regulation.

The provisions of these regulations shall apply to all qualifying renewable energy sourced electricity of capacity above one megawatt and smaller than 30MW at a site that is connected to the transmission grid or the distribution networks. For large renewable (30MW 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 maximum amount of renewable sourced electricity a distribution company can have on its network based on optimal potential available in their franchised areas was also allotted. The statement noted that this provision of the regulation was geared towards helping the sector achieve the right mix of energy for the Discos 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 the 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.

According to the statement, provisions of distribution code would also apply to embedded generation while grid code would apply to those that would use the transmission network to transport their electricity. The business life of every renewable power plant, according to the statement, was fixed at 20 years by the law which expects recovery of investment to last within this life span of the plant. “NERC shall be responsible for regulations of feed-in-tariff whereas NBET serves as counterparty to power purchase agreement with renewable energy project developers.”

Currently, Nigeria generates 4516MW from her thermal and hydro power plants. Gas supplies to the thermal plants which generate about 80 percent of the country’s electricity have in the last couple of months improved. Additional supplies from her renewable sources could provide some level of stability in supplies, especially if embedded within the distribution networks.

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