NERC enacts draft regulation for mini-grid

The Nigerian Electricity Regulatory Commission (NERC) has produced a draft regulation for Mini-Grids in a bid to address erratic power supply and effective regulation in the power generation.

The objective of the 140-page Regulation according to NERC is to accelerate electrification in areas without existing Distribution Network (Unserved areas) and areas with an existing but poorly electrified or non-functional distribution grid (Underserved areas) by attracting participation of private sector, communities, Non-Governmental Organisations (NGO) in achieving nationwide electrification.

The regulation seeks to minimize major risks associated with Mini-Grid investments such as: (1) Sudden tariff changes, as tariffs would have been agreed in advance by the relevant parties; and (2) Stranded Mini-Grid Operator investments due to extension of main grid to cover the Mini-Grid area.

In such cases, NERC said a fair compensation mechanism would be applied for Mini-Grid Operators that choose to exit.

The regulation provides for permit and tariff approval procedures which will ease the administrative burden on the Mini-Grid Operator and ensure the process of obtaining the Permit in a timely manner.

The Distributed Power of the Mini-Grid determines the regulatory procedure to be followed.

“For Distributed Power of up to 100kW, a permit is optional for the Mini-Grid Operator; while for Distributed Power of over 100kW and installed Generation Capacity of up to 1MW a Permit, will be required.

“Beyond that limit, a full licence is required which is outside of the scope of this Regulation and is taken care of by other already existing Regulations,” NERC said.

Meanwhile, the Bureau of Public Enterprises (BPE) has told Kaduna Electric that the federal government may soon reveal its position on the debts owed the 11 Distribution companies (Discos) by the Ministries, Departments, and Agencies (MDAs).

Speaking during an inspection visit, the Deputy Director on Post Privatisation, Mallam Rabiu Abubakar Abba, while responding to the challenges of the Disco said, “Very soon the government will come out with a position particularly on the debts owed Discos by MDAs as well as issues of liquidity bedeviling the sector.”

In his address, the Managing Director of the Disco, Mr Garba Haruna, said the whole process of privatisation is to reduce losses and increase efficiency in the power sector.

He noted that the agency is part of Kaduna Electric as the government owns 40 per cent equity while BPE represents its interest on the Disco’s board.

The Deputy Director, Enterprises at BPE, Mr John Olalekan Joseph, tasked other Discos on deploying similar GPS technology saying it would bring down significantly then commercial losses of the firms.