November 26, 2014

NERC Decries Absence of Renewable Energy Policy in Nigeria

The Nigerian Electricity Regulatory Commission (NERC) has decried the absence of a policy on renewable energy in the country, saying the development is retarding the contribution of solar energy to the power supply.

Speaking at the Nigeria Photovoltaic Energy Conference, Solarcon 2014, held in Lagos at the weekend, NERC’s Deputy General Manager in charge of Research and Development, Mr. Imamudeen Talba said Nigeria had all the potentials for solar power but lacked policies and legislations to drive this renewable energy option.

“The problem we have in solar in Nigeria, particularly renewable is absence of policies, regulatory challenges and other challenges. Why is it that we do not have adequate solar projects in Nigeria, despite all the potentials that we have? When we go to international for a, we find ourselves embarrassed because most of the West African countries have structured processes for renewable. Some countries have gone to the extent of making legislations for renewable; some countries have policies for renewable energy but Nigeria does not have,” he explained.

He said grid-connected solar power faced a lot of challenges in the country, adding that grid supplies are usually the cheapest option in areas with high load densities, as well as in areas near the grid.

However, Talba said a number of challenges militates against grid-connected solar energy.

He listed the challenges to include high costs of installation and wiring; large land area required and the fact that solar power is not dispatchable, that is, cannot respond to automatic generation control signals from the control centre.

Talba also stated that connecting small, isolated villages to a grid can be expensive because of the necessary investment in transmission lines, poles, transformers, and other infrastructure.

“Solar PV power come in relatively small size and are best connected to low voltage lines whereas NBET buys power only at transmission voltage,” he said.

According to him, the National Energy Policy provides for increase renewable share of power supply, adding also that the yet-to-be approved draft renewable energy master plan provides for 18 per cent of the electricity installed capacity from renewable energies not including the existing large hydropower by the year 2020.

He argued that the country should effectively harness solar energy resources and integrate them with other energy resources. 

Talba also called for the promotion of the use of efficient solar energy conversion technologies, such as use of photo-voltaic and concentrated solar panels for power generation. 

He also called on the Federal Government to intensify efforts to increase the percentage of solar energy in the present energy mix.

To encourage investment in renewable energy, Talba listed the incentives that are implied in the feed-in tariff to include guaranteed market; priority grid connection and offtake ; simplified licensing /permit process; concessionary tariff rates and facilitated land acquisition/ site access.

Other recommended policy incentives, according to him, include tax holidays; import duty exemptions; investment tax credits.

He said NERC on its part, had initiated regulatory instruments to drive solar energy in the country.

He identified the regulatory instruments provided by the agency to include feed-in tariff methodology; draft standard power purchase agreement (PPA); draft licensing guideline; interconnection guidelines; draft incentive proposal and embedded generation regulation.

According to him, feed-in tariffs refer to a minimum guaranteed price per unit of produced electricity as approved by the regulator, to be paid to the producer, or as a premium in addition to market electricity prices.

“Regulatory measures are usually applied to impose an obligation on electricity utilities to pay the (independent) renewable energy power producer a price as specified by the government. The level of the tariff is commonly set for a number of years to give investors security on income for a substantial part of the project lifetime. Nigeria is currently assessing the various regulatory, policy and incentive options, given that each approach has its pros and cons,” he added.

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