Implementation Progress
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Introduction
Generation Facility Status as at date
Generation
Power stations capability 5GW
for 180 million people
• Units available : 81
• 28 Stations(3 hydro, 25 thermal) • Units on bar : 58
• 130 Turbine units
2030
2020
Strategies
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The New Paradigm
• The new strategy will
– reduce inequalities in access to electricity and the
associated opportunities for increased social welfare,
education, health and income generating opportunities.
– it will be progressively demand-driven; with active private
sector participation
– Include PPP strategy areas not yet attractive for the private
sector,
– guarantees that the investor will recover all the cost of
supply either from tariff or tax.
– Will deploy the Rural Electrification Fund to achieve
equitable regional distribution access to electricity
REF
The RE Fund consisting of contributions from government, electricity
market, donors etc. in accordance with provisions of EPSR Act of 2005
will be used to :
– bridge the gap between commercial viability and tariff affordability in
remote rural communities,
– buy down investment costs, risks and information barriers to public or
private initiatives.
– Support increased access (connections to grid and off-grid supply) but
not consumption, through open competitive bids;
– provide counterpart contribution of the total funding will other
parties (distribution companies, local communities, business groups,
etc.) would have to provide the rest.
• The efficiency of REF operation will be measured by number of
access created per invested subsidy amount subject to the
satisfaction of regional equity requirements.
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Tariff Policy
• In order to stimulate decentralised initiatives, projects must
be commercially viable.
• Tariff revenue must cover the costs to the service provider,
allowing private capital to make a return on equity and
finance the investment.
• No Uniform tariffs across the country
– Cost structure –Investment costs, financing Customer
categories
• No tariff cap
– Recover costs
– Ability to pay by the population
– No predetermined ROE
• No Lifeline/Social tariff as part of the tariff structure
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WHY REGULATING OFF-GRID PROJECT?
Slide 9
THE MINI-GRID REGULATION
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Barriers to Private Investment in Rural Electrification
Investors’ concerns
Expansion
Stranded Profitability
scope Will cost reflective
investment Will competitors tariff be allowed ?
Would the main grid ‘steal’ good
arrive too soon? contiguous sites ?
consumers’ concerns
Safety
Would the mini-grid Affordability
operate at the required
Reliability Will it be not be too
safety standards How reliable is small expensive ?
scale utility ?
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Features of the mini-grid regulation
Slide 12
What is a mini-grid?
Isolated Mini-grid <100
A mini-grid, in the context kW
of rural electrification, is
an integrated Only registration required but may opt for a permit
decentralized local
generation, transmission Isolated mini-grid
and distribution system >100kW and <1MW
serving numerous
end‐users that stand on its Requires permit and minimum network standards
own separated from the
national grid with an Interconnected Mini-grid
installed generation >100kW and <1MW
capacity below 1MW
Why regulating mini-grid?
• Major barriers against investment in mini-grid
– Concerned that grid may arrive faster than expected, and
all customers shift over to main grid.
– Concerned that competitors might steal good sites
(especially an issue when subsidies start to be available)
– Lack of clarity about whether cost-reflective tariffs can be
charged.
• Customers need confidence that:
– Mini-grid is safe
– Power is reliable
– Not too expensive
Slide 14
Removing the Barriers
• How does the mini-grid regulation Address these
concerns ?
– Permit
• Streamlined for projects >100kW and < 1 MW
• Voluntary for projects < 100 kW
• Exclusivity period : legal right to reserve a site subject to
demonstrating progress
– Tariffs: permission to charge cost-reflective tariffs
– Provides for
• Quality of service
• Dispute resolution framework
• Options when main grid arrives
Slide 15
WHAT IS A MINI-GRID?
Isolated Mini-grid <100
A mini-grid, in the context kW
of rural electrification, is
an integrated Only registration required but may opt for a permit
decentralized local
generation, transmission Isolated mini-grid
and distribution system >100kW and <1MW
serving numerous
end‐users that stand on its Requires permit and minimum network standards
own separated from the
national grid with an Interconnected Mini-grid
installed generation >100kW and <1MW
capacity below 1MW
Requires permit and minimum network standards
ISOLATED MINI-GRID <100KW
With No permit
With a permit
• Mandatory Registration with • Voluntarily elect to
NERC obtain a permit
• Sign Exclusivity
2 agreement
All documents are uploaded on the online tool on the Commission’s website
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Require document for permit
application
• Main Document
– Registration/Incorporation papers
– Site title document
– Relevant maps and drawings
– Contract between the Community Representative and
Mini-Grid Operator
– Environmental Impact Assessment
– Building Permit only in case they need to build
powerhouse (e.g. not applicable for container solution
• all documents should be uploaded on the online
tool)
Mini-grids and the
Arrival of the National Grid
Arrival of Disco network
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Screenshot of the Homepage
Access to the Developer Page
Search Engine
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Mini-Grid Developer Space: Application Process (2/3)
• NERC receives a notification and has, according to the regulation, 30 working days to process the
application.
– If the request is not approved, the developer is informed per email with a justification (e.g. document not compliant,
wrong information in a form). The developer can then make the necessary adjustments and submit the request again.
Demshin Plateau State 52.65 352 GVE & Plateau State Govt
Egbeke-Etche River state 9 4200 GVE Projects Ltd
Umuagwu Rivers State 6.84 86 GVE
Umuokwu Rivers State 10.65 120 GVE
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CHALLENGES FACING MINI-GRID
PROJECTS
• Higher Tariffs compared to National Grid
– Tariffs should be set to recover investment, operation and
maintenance costs, management fees as well as the return on
investment;
– Higher distribution price – even with no investment related costs
– Cost-reflective tariffs for mini-grid installations may be presumed as
being high, however, the cost of unserved electricity is even higher;
• Suboptimal Demand
– Demand and ability to pay projections often present major viability
challenges in planning the development of mini-grid projects;
– Demand is difficult to accurately determine considering that the
targeted population usually has limited previous experience with
electricity consumption;
THANK YOU
Contact us at:
Adamawa Plaza, Plot 1099 First Avenue,
Off Shehu Shagari Way,
Central Business District,
Abuja
Website: www.nerc.gov.ng
E-mail: info@nerc.gov.ng
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