Surge in global renewable energy generation underlines Nigeria’s unpreparedness
A last week release by Renewables 2016 Global Status Report (GSR) states that 2015 saw record additions of 147 gigawatts (GW) of renewable power capacity, which again questions Nigeria’s readiness to take advantage of alternative energy sources.
Published by the Renewable Energy Policy Network for the 21st Century (REN 21), a global renewable energy network that connects governments, non-governmental organisations, research and academic institutions, international organisations and industry to share information and advance renewable energy, indicated that renewable energy was the future of any country’s energy security plan.
According to the report, global capacity reached 1,849GW, up 8.7 percent over 2014. Hydropower rose by 2.7 percent to 1,064GW, and other renewables collectively grew by 18 percent to reach 785GW.
Growth in solar photovoltaics (PV) global capacity averaged 42 percent annually over the past five years. Renewables made up 19.2 percent of overall global energy consumption in 2015. Modern renewables like wind, solar, biomass, and geothermal power cumulatively made up 1.4 percent of global energy consumption.
Analysts say this development questions Nigeria’s readiness to exploit alternative energy to improve power generation in the country. They cite the absence of a regulatory framework for renewable energy, lack of net-metering and feed-in-tariff as huge barriers to investments in the sector.
“Nigeria needs a national energy policy, regulatory programmes and innovative financing mechanisms that encourage the development of distributed energy, particularly, applications that combine solar generation with energy storage,” Patrick Owelle, a solar energy research fellow and managing director of PSC Solar UK, said.
However, the Nigerian Electricity Regulatory Commission (NERC) has said it is working on a policy regulatory framework for renewable energy.
“NERC is working on appropriate regulatory mechanism to help implement the draft renewable energy power policy; this will help to cushion the tariff shock on the electricity consumer,” Anthony Akah, acting chairman, NERC, said in response to questions.
“Based on the policy, the Commission has initiated regulations for promoting renewable energy penetration, namely – net metering, feed-in-tariff and competitive procurement for different size ranges,” he said further.
Industry operators say that net-metering, which is a billing mechanism that credits solar energy system owners for electricity they add to the grid, is essential to encourage investments in the sector.
Also feed-in tariff, a renewable energy payment made to households or businesses generating their own electricity through the use of methods that do not contribute to the depletion of natural resources, proportional to the amount of power generated requires proper framework to drive it.
According to Akah, the Commission is working on a feed-in tariff for four priority resources namely – solar, biomass, wind and small hydropower of different capacity limits.
Nigeria has 16 solar power projects across the country, expected to add 1,300 megawatts to the nation’s generating capacity, which are lying comatose.
At a recent meeting with representatives of the Federal Capital Territory Administration (FCTA), state governments, Nigerian Bulk Electricity Trading Company (NBET), distribution companies (DISCOs) and prospective solar power promoters and investors with Babatunde Fashola, minister of works, power and housing, in Abuja, it was stated that the projects had been unable to progress because of the lack of bankable power purchase agreements (PPAs).
Fashola said about N3 billion was required monthly to fund subsidies in solar power consumption in the country, and the money not available to the government.
He however advised investors to consider securing bulk electricity consumers they could sell their outputs to at prices that would guarantee them return on their investments.
In the absence of proper regulatory framework private investors are taking a chance providing off-grid power solutions. They operate bulk purchase models where consumers pay for renewable energy infrastructure, while some operators set up a rental arrangement where energy is sold for per-day consumption.
Industry operators want the government to review duties and taxes on solar component to deepen the sector.
“Batteries are the more expensive component of every solar installation, but batteries attract 20 percent custom duties, while solar panel is 5 percent. If energy is critical to the nation why don’t we make it all zero percent? This is further going to drop down the cost of deployment,” Sulaiman Yusuf, MD/CEO, Blue Camel Energy, said.