Power Manufacturers spent N129.95bn on power in 2016

NERC’s Mini-grid Regulation To Improve Electricity Investment

Power For All, a global coalition of companies and civil society organisations has expressed optimism over the new regulations for electricity mini-grids by the Nigerian Electricity Regulatory Commission (NERC), stressing that it will enhance investment in the power sector. Mini-grids are electricity supply systems with their own power generation capacity, mostly from renewable energy, supplying more than one customer and can operate either in isolation from or connected to an existing distribution network.

The regulations, which are the country’s first for mini-grids, were the result of engagement between NERC and industry stakeholders, covers the licensing, tariff and technical standards for all mini-grids from 0kW to 1MW.

The former Power Minister, Barth Nnaji, had said during a Natural Gas Business Forum in Lagos, that hostile operating environment and regulatory challenges are the foremost reasons why Nigeria’s power sector is not attractive to investors. He said the Federal Government had not addressed major issues that would guarantee the return on investment, citing non-cost-reflective tariff, gas constraints, transmission constraints, non-credit worthiness of the distribution companies, over leveraged power assets, among others, raise the fear of investors.

However, reacting to the new regulations for electricity mini-grids, the Nigeria Country Manager for Power for All, Ms. Ify Malo, said:

“The regulations will go a long way to boosting investment in renewable energy through mini-grids and providing electricity to consumers in underserved and unserved areas. In particular, the cost-reflective tariffs and clearly defined procedures for obtaining permits will encourage solar mini-grid developers.”

She noted that, “The regulations also define rights for communities being connected to mini-grids in order to protect them, which will encourage communities to install mini-grids for power supply.”

Similarly, founder and Chief Executive Officer of Nigerian mini-grid developer GVE, Mr. Ifeanyi Orajaka, said:

“The signing of the mini-grid regulation into law, marks the beginning of the much-needed disruption that will eventually ensure that all Nigerians, irrespective of the region of abode, will have access to stable and reliable electricity.

Orajaka stated that this is a bold step from the Federal Government, adding that,

“It will go a long way in attracting private investments that will solve Nigeria’s electricity crisis.”

Also, the CEO of Arnergy, a Lagos-based renewable energy, and a solar mini-grid developer, Mr. Femi Adeyemo, said:

“The new mini-grid regulation is an indication that the Nigerian government is thinking of decentralized renewables in her electrification plan energy mix. Via the new regulations, adoption of off-grid renewable energy in Nigeria is poised to increase localized, rugged, reliable, cost-effective and easy-to-deploy electricity to hospitals, schools, and rural communities enhancing the overall development of the country.”

Vanguard reports that Power for All,  has lauded the new regulations for electricity mini-grids by the Nigerian Electricity Regulatory Commission Power for All promotes decentralized renewable energy as the fastest, most cost-effective and sustainable approach to universal energy access.

It is present in six countries and has its headquarters in California, USA. In Nigeria, Power for All has been instrumental in the establishment of the Renewable Energy Association of Nigeria (REAN) to enable the private sector be a part of renewable energy policy formulation, supporting the Rural Electrification Agency (REA) to integrate distributed renewable energy into its work and facilitating action-oriented collaborations between stakeholders working to build sustainable DRE markets and increase energy access.

Busayo Oladejo

Passionate about Information technology, Project management and Social media.

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