The Nigerian Electricity Regulatory Commission has approved a new feed-in tariff regulation for electricity from renewable energy sources. Aiming to make use of Nigeria`s vast and mostly untapped potential for renewable energy, the Commission announced its intent to stimulate investment in the sector. By 2020, a total of 2,000MW shall be generated through renewables like biomass, small hydro, wind and solar.
According to the new regulation, the electricity distribution companies (Discos) will be obliged to source at least 50% of their total procurement from renewables. The remaining 50% was set to be sourced from the Nigerian Bulk Electricity Trading Company. Moreover, a distinction was made between small and large generation plants. While electricity procured from small plants (between 1MW and 30MW) will automatically be integrated as renewable energy, the Commission will initiate a competitive bid process for larger renewable energy projects (more than 30MW). Furthermore, the new feed-in tariff regulation already determines the procedure for auctions for the larger projects.
The respective Discos will have specific renewable energy sources allotted to them, thereby guaranteeing a balanced energy mix. For instance, Ikeja, Ibadan and Eko Discos were assigned 26MW, 22MW and 19MW of biomass. In contrast, Abuja Disco was allocated with the highest wind-sourced electricity (14.4MW) and Kaduna and Kano discos were each allotted 12MW of solar-sourced electricity, 10MW of small hydro and 6MW of biomass.
Supply regulations determine the application of the distribution code for the embedded generation class, while others using the transmission network for electricity transit fall in the grid code.
The Commission declared that investors in the renewable energy plants would be given an operating period of 20 years, within which they should be able to recover their investments for the entire life span of the plants.
This new development offers a very promising outlook for Nigeria`s energy future and once more strengthens the RECP`s commitment to Nigeria as its focus country.