In its bid to deal with the stubborn challenge of inadequate generation and supply of power in the country, the Nigerian Electricity Regulatory Commission, NERC, recently revealed the Draft Mini-Grid Regulation 2016. It was designed to simplify and accelerate the electrification of areas that are cut off from the distribution grid or with non-functional distribution grids.
According to the draft, registered entities that are able to generate 1MW of electricity are allowed to supply directly to the end consumers and fix their rate.
This is considered a very welcome development by the Association of Alternative Power Suppliers of Nigeria, AAPSN, who have shown their support and readiness to take advantage of the draft regulation.
The President, AAPSN, Mr. Femi Omotayo, who also is the Managing Director, AOS Orwell, said members of the association would provide alternative power mainly through embedded generation projects to fill the supply gap in the power sector.
Omotayo, who stated this at a breakfast meeting in Lagos, said, “We need to explore all the sources of energy — gas, coal, solar, among others — because we are still underserved.
“There is a need to revisit the regulations on embedded generation because, at the moment, you cannot complete the cycle. We are all very excited about the mini-grid regulation. We just need 10,000 companies doing one megawatt each and half of our problem will be solved.
“In driving such concept, there will be challenges. Our role as an association is to foresee these challenges and proffer sustainable solutions to ensure that all members succeed in this.”
Also at the event, Managing Director, PNN Group, Mr. AbdulRahman Abiola-Odunowo, who is the Public Relations Officer of the association said, “The conventional generation is about 4,000 megawatts; the alternative power all of us currently provide individually is more than what government generates. So, regulation is now making it possible for organisations to come together under this association to complement what government is doing through alternative generation.”
Abiola-Odunowo said the decentralisation which the draft regulation provides would be effective as production could be localised and engaged in by numerous players. He said the association’s plan is to find 10 companies in each local government area to generate 1MW each for a start.
According to him, “The regulation says you can generate one megawatt and sell to the end users. It says when you are doing a mini grid, register it with us and agree with the Disco that when they are ready, you can pack out or they can pay you off. So, there is no problem. What the alternative power will do is that instead of every one of us self-generating, some people will carry the burden and reduce our cost of production.
“We expect the regulation of the mini grid to come on stream by the first quarter of next year. The advantage of this mini-grid regulation is that it solves everybody’s problem; we had wanted to sell to the Discos but they can’t give us guarantee; so we can’t sell. They don’t have the money.”
He said the mini-grid regulation would afford alternative power producers the opportunity to go to the consumers directly.
“As an alternative power producer, the regulation allows me to charge my own tariff as long as it is cost-plus. In other words, the regulation is not insisting that we must charge N26 per kilowatt hour. We know that for self-generation, majority of us are currently paying N75 per kilowatt hour.”