The Nigeria Electricity Regulatory Commission takes measures to promote renewable energy investment in the country
| By Anayo Ezugwu | Sep 12, 2016 @ 01:00 GMT |
THE Nigerian Electricity Regulatory Commission, NERC, has made remarkable adjustments to accommodate and promote investments in Nigeria’s renewable energy sector. In a presentation at the second edition of the Nextier Power Dialogue in Abuja, the regulatory agency identified some of the adjustments to include a very attractive renewable energy feed-in-tariff, and a regulation that ensures that local electricity distribution companies, Discos, source for up to 50 percent of their power from renewable sources.
The agency also described the long-term cost recovery cycle as another significant incentive to make the country to become a choice destination for renewable energy investors. Anthony Akah, acting chairman, NERC, said the country’s challenges with conventional power generation gave renewable energy a perfect condition to become the energy source of choice for consumers.
He stated that though there were still challenges in developing renewable energy projects in the country, the commission’s regulations had largely ameliorated the challenges and unlocked investment opportunities in the sector.
Akah described the ‘Feed-in Tariff Regulations for Renewable Energy Sourced’ , which targets at least 1,000 megawatts, MW, of electricity from renewables by 2018, and also allotted respective volumes of renewable energy procurement to Ikeja, Ibadan, Eko, Kaduna and Kano Discos, as a remarkable piece of law enacted to woo investments in the sector.
“The Act gave NERC the authority to issue licenses for power generation over 1MW and also empowered NERC to set tariffs for operators. NERC had streamlined the licensing process so that any investor applying meeting the new requirements would be issued a power generation license expeditiously. Changes have also been made to the feed-in traffic mechanism, and this is important for investments in the market to address the high demand and low supply of electricity in the country,” Akah said.
Similarly, other speakers such as Tinyan Ogiehor, technical leader for British-funded Solar-Nigeria project, and Yesufu Alonge, head of Power and Procurement at Nigerian Bulk Electricity Trading Plc, NBET, made presentations on how the country could maximise her renewable energy potentials.
Ogiehor, in his opening remarks, highlighted the opportunities and challenges in the off-grid space. He proposed policies to tackle the challenges in the off-grid electricity markets, adding that such policies should include off-grid mapping, technical skills, mobile infrastructure and a designated body to drive the country’s off-grid electricity market.
On his part, Alonge, who spoke about current investment opportunities available in Nigeria’s solar energy market place due to the electricity supply deficit, noted that the country’s small hydro dams were other good alternative renewable energy sources that could be explored by investors to stabilise the power supply in the country.
Renewable energy penetration in Nigeria is still in its nascent stage. It is below that of other widely known energy sources due to technological and economic drawbacks, in addition to deep rooted policy inertia. The only source of renewable energy in the country is hydro-power and biomass; wind and solar energy have only been deployed in minuscule amount. Hydroelectric power plants with installed capacity and those coming on stream cumulatively accounting for roughly 13,000MW.
The country has a target in 2007 to produce seven percent of its 2025 energy needs from renewable with solar and hydro as the major priority. Nigeria has the potential to exploit its abundant solar energy resources considering its geographic location around the equatorial sun-belt.
The country receives abundant sunshine all year round ranging from 6.70kwh/m2/day in Borno State to roughly 4.06kwh/m2/d to 5.86kwh/m2/d in locations such as Calabar in Cross Rivers State. The Federal Capital Territory has a daily horizontal solar radiation ranging from a high of 6.07/kwh/m2/d to a low of 4.42/kwh/m2/d during the month of August.
This level of solar radiation across the country can support huge deployment of solar power infrastructures designed to primarily feed in to the regional power distribution entities. Despite the glaring economic constraints of solar power generation, its limited competitiveness, a low capacity factor, in addition to high cost of PV cells, renewable power sources mainly solar power development can support peak time energy consumption and can add considerable capacity directly to the national grid or embedded network of distribution enclaves.