Investors are positioning to take advantage of provisions of the Draft Mini-Grid Regulations enacted by the Nigerian Electricity Regulatory Commission (NERC) to generate 10,000MW of power starting next year.
The investors are positioning to take advantage of the provision that allows investors in embedded generation charge cost reflective tariff, which are in line with the Multi-Year Tariff Order (MYTO) and allows them recover cost and include a profit margin.
It also, for the first time, makes a permit optional for a mini-grid operator that distributes up to 100kw. For anything over this amount and installed generation capacity of up to 1MW, a permit would be required, which would not impede their ability to generate, transmit and distribute power to willing buyers.
The Association of Alternative Power Suppliers of Nigeria (AAPSN), a pressure group for alternative power generation, comprising MDs and CEOs of businesses interested in providing alternative power in Nigerian, is pooling resources, skill and technical know-how, to provide power for their businesses.
“The idea for us, is if we do it as individuals, we will not achieve much, but if we do it together as a group, we achieve more. We share knowledge, intelligence, resources, expertise,” said Femi Omotayo, MD and CEO of AOS Orwell and President of the association, at the group’s breakfast meeting held in Protea Hotel, Lagos on December 8.
Omotayo said the group’s principal objective is to help their members who are mostly industry leaders, to transit seamlessly from generating power to transmission and distribution, complementing the efforts of government to make power available.
This, they plan to do by helping investors tackle financing issues, provide standardised templates upon which legal agreements will be drawn, a pool of technical manpower, reliable data and feasibility studies that will help projects from idea to completion.
“Our strategy in the short-term, is to get 10,000 Nigerians doing 1MW each and half of our problem is solved. If you divide this by the local governments we have, we are looking at 12 companies per local government, generating roughly 10,000mw,” said AbdulRahman Abiola-Odunowo, MD and CEO PNN Group.
In October this year, NERC released the Draft Mini Grid Regulations 2016, which stipulates that electricity distribution companies could use mini grids as a bridge technology to accelerate their electrification activities.
The regulations were specifically designed to fast-track electrification in areas without any existing distribution grid and provide access to power to areas poorly served, or with non-functional distribution grid.
“It is to encourage investors on off-grid, not only in the main grid, so that they can bring power to the rural communities at affordable cost, and also protect investors who are going to invest in mini-grid. There is no such regulation in place at the moment,” said Haliru Dikko, Deputy General Manager in charge of Renewables, Research and Development, NERC on the issue.
Dikko said the regulation provides for permit and tariff approval procedures, which will ease the administrative burden on the mini-grid operators and ensure the process of obtaining the permit in a timely manner, ‘Nigeria Today’ reported.
However, the investors are calling on the discos and NERC to engage more with them, as their offer helps to ease the burden of irregular power supply.
“At the moment, the regulator is saying ‘go and discuss with them (the Discos) directly’, what the regulator should be saying is that this is the template for all of you in my sector, work with it,” said Abiola-Odunowo.
ISAAC ANYAOGU
