Assessing FG’s implementation of ERGP power sector objectives
The Federal Government in February 2017 released what it termed an economic blue print for the nation called the Economic Recovery and Growth Plan (ERGP) which provides a medium-term plan for sustainable development of different sectors of the economy, including the power sector.
Regarding the power sector, the objectives of ERGP are to overcome challenges relating to governance, funding, legal, regulatory and pricing issues across the Nigerian Electricity Sector Industry (NESI) value chain.
The policy document like many from the Federal Government is not short on ambition. It aims to optimise the delivery of at least 10GW of operational capacity by 2020 by encouraging small-scale projects building capacity over the long term and investment in transmission infrastructure.
A key policy objective of the ERGP with respect to the power sector is to improve energy efficiency and diversity the energy mix through greater use of renewable energy. While there have been renewed interest in ramping up renewable energy adoption in the country, it is not clear how much of this drive can be attributed to the policy.
Operators have hailed the mini grid policy and it has begun to gain traction. It was enacted a year before the ERGP was released. Last year, it birthed two new solar power projects according to Babatunde Fashola, minister of Power, Works and Housing in a speech at the 19th edition of the monthly power sector operators meeting in Lagos.
One of the projects that will be sited in Abuja would provide stable electricity to 145 households and five businesses by Havenhill Synergy Ltd. Fashola said there is another one scheduled for completion and commissioning in Kano which was not elaborated upon.
A Spanish firm, ENAFRO, last year said it was bringing a €120 million solar electricity project to the state. It plans to recoup its investments in the project within 20 to 25 years, subject to agreement by the state government.
“Let me commend the Nigeria Electricity Regulatory Commission (NERC) for the issuance of regulations issued at our last meeting in Kano. It is beginning to bear the results of registration and licensing because the Vice-Chairman of NERC informed me that a solar-based mini grid facility will be commissioned in Kigbe community, Kwali Local Government, FCT Abuja,” Fashola said.
The mini grid regulation contains a net-metering for very small capacities (typically below 1MW); feed-in tariff for capacities up to 5 megawatts (MW) of solar, 10 MW of wind, 10 MW of biomass, and 30MW of small hydro; as well as competitive tender for capacities above these thresholds to be procured through the Nigerian Bulk Electricity Trading Plc (NBET).
Other important objective of the ERGP is to facilitate private sector investment in generation, transmission and distribution, and improve access to electricity to all Nigerians. Not much has been accomplished on these objectives. Private investments into the generation, transmission and distribution have stalled. The sector still lacks cost-reflective tariff and this is the biggest deterrent to new investments.
On increasing rural electrification using off-grid renewable solutions, there is considerable progress in this regard. The Rural Electrification Agency is assisting industrial clusters in Lagos, Kano and Aba by providing power as well as to some Federal universities.
The policy objectives of restoring financial viability in the electricity market, implementing a data-driven approach in power sector development planning and elimination of sabotage in gas and power infrastructure are largely mirage.
ISAAC ANYAOGU