NERC’s regulations seen deepening offgrid investment opportunities
Babatunde Fashola, Nigeria’s minister of Power, Works and Housing has urged investors to take advantage of budding opportunities in alternative power generation by taking advantage of new regulations by the Nigerian Electricity Regulatory Commission (NERC) such as Eligible customer and the mini grid regulations.
While delivering the keynote address at the Franco-Nigeria Chamber of Commerce and Industry (FNCCI) conference held in Lagos on Monday, Fashola also urged investors to seize the moment as government has included solar energy technologies such as panels, batteries, diodes and other components in the new pioneer status.
Africa’s largest economy has managed to ramp power generation close to 5,000MW but the inefficient DisCos can only manage to distribute 4,000MW when their systems are running at full capacity, but current distribution averages about 3,600MW.
Fashola told the investors that this challenge presents an opportunity to tap into such policies like the eligible customer declaration and mini grid regulations to take advantage of this stranded capacity.
“I find it rather strange that business men and entrepreneurs are still talking about power challenge in Nigeria, because the current data and record show that the DisCos have a customer base of about 7.5million households in a country of over 180million people so that cannot be a challenge in my humble view, that’s an enormous opportunity,” said Fashola.
The mini grid regulation allows investors to build mini grid of about 100Kwh without recourse to government permits. Investors who build mini grid of up to 1MW capacity will require a license. The power generated can be sold between a willing buyer and seller at market prices. In the case of the eligible customer declaration, electricity consumers of up to 2MW can apply for power directly through the GenCos.
The minister said the opportunities lies in solar home systems, hybrids of renewable energy and these opportunities lie there because government has made a very conscious policy statement in reversing the pioneer status in approving solar manufacturing, solar panels, batteries, light emitting diodes and all the accessories necessary for manufacturing solar equipment’s in Nigeria.
The opportunities lie in the construction of mini grids, an area the regulatory commission has issued regulations saying very clearly that if you build a mini grid of about 100Kwh, you are not required to obtain a permit but for projects above 1MW said Fashola.
Laurent Polanceaux, French Consul said the country was willing to partner with Nigeria to grow the alternative energy sector and many French companies are seeing opportunities in Nigeria’s offgrid market.
The economic summit which focused on the power challenge in Nigeria and the ease of doing business had participants from the chamber of commerce who showcase their activities such as Schneider and Total who are ramping investments in alternative energy.
Panel members also called on the government to review the licensing process of the value chain and the processes involved in getting approvals from the regulations. There is a need to review policies that has allowed for ineffective power generation and distribution, said a communique from the summit.
The French Week is one of the biggest bilateral events in Nigeria put together to promote French and Nigerian brands, culture and relationships to the international business community and to create an atmosphere for networking and exchange of ideas.
ISAAC ANYAOGU