Embedded power generation: an innovation to fix power outages
A novelty is being experienced in power sector with the introduction of embedded power generation scheme. With the introduction of the scheme electricity provision would be available for those, especially industries and companies, through special arrangement between the suppliers of power, distribution companies and the consumers under an agreed term which would have structured out a tariff plan that would be satisfactory to all the parties involved.
Through smaller modular generators using a variety of generation technologies such as solar, wind, biomass, diesel, low fuel oil (LPFO), high fuel oil (HPFO), crude oil and small hydro embedded generation is a useful means of dedicating power to high net worth customers, state and local governments respectively.
The operative guidelines of this interventionist scheme which has the potential to bridge the gap being experienced currently in the power sector for the scheme is being finalised by the National Electricity Regulatory Commission (NERC).
The tariff that would be charged in the scheme will however not follow the regular tariff pattern, typically N12 is charged per kilowatt hour. In fact the expected tariff under this scheme is between N24 and N30 per kilowatt hour for it to be economically viable according to experts.
If the scheme is to achieve the desired result NERC must do everything possible to ensure that the implementation of the embedded power generation scheme takes off with little hitches.
This kind of arrangement is not new. A lot of advanced countries where uninterrupted power supply is not taken for granted use it; it is time we took advantage of this type innovation and its benefits.
Nigeria can benefit tremendously from the initiative when put in place. It can help bridge the gap in terms of electricity supply in the country as it has done in advanced countries like Germany.
Countries like Germany and the UK had at one time or the other used such interventionist approaches to boost electricity supply when the need arose and it was of tremendous help to their economy.
Perhaps, it was because of the monumental benefits that can be derived from such a scheme that made the German government support it. At a recently organized seminar on renewable energy with the embedded generation as the focus, Micheal Derus, the Consul-General of the German embassy described embedded generation as very important to the nation’s economic development and urged Nigerians to embrace the scheme.
With embedded generation the country should be able to achieve its national aspiration within a short time and reduce technical losses because of proximity to networks system and deepen the electricity market. If the scheme takes off smoothly distribution companies would have access to power supply and better cash flow as more customers would be ready to pay for a regular and steady electricity supply.
It is therefore very cheering that Eko Electricity Distribution Company is planning to achieve 1,000 megawatts of electricity through embedded generation. This will be done in phases between now and 2020 and will take up to a year to be installed. There is a gas pipeline facility in place already by Gaslink , one of the off-takers of the gas supply from Nigeria Gas Company (NGC).
With respect to gas for electricity generation, this is an investment opportunity for businessmen with resources to build small plants. It is an opportunity since the arrangement is between a maximum of three parties and it would be easy to be paid for the services rendered.
Already a Power Purchase Agreement (PPA) arrangement has been entered into by some interested parties. This is good because it will make the service faster to execute. Similar schemes already exist in some areas just that it requires regulatory backing for them to be consummated.
While the efforts of NERC must be commended, it must however be stated that it must remove all restrictions, bureaucratic bottlenecks that would discourage potential investors. All hands must be on deck to move the power sector forward in order for the economy to attain the desired goals of creating employment and other sundry benefits.