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| L-R: Muhammad Lawal Bello, vice chairman, NERC; Sam Amadi, chairman, NERC, and Patrick Umeh, commissioner, Finance and Management Service, NERC, during the signing of the Independent Electricity Distribution Network Regulation and Embedded Generation in Abuja, yesterday. Pic by Tunde Adeniyi |
Industry watchers say this move will speed up capacity development and deployment in the sector, such that efficient and competitively- priced electricity would be available to Nigerians in good time.
NERC chairman, Sam Amadi expects this to enable a short term triumph over some challenges of the sector before the reforms take full shape in the next two to three years, as projected by the government.
These regulations thus present a clear legal and regulatory framework, specifically for Embedded Generation (EG) and Independent Electricity Distribution Network (IEDN).
“State governments and every other person can no longer complain of being shut out of the power generation market anymore,” said NERC chairman, Sam Amadi speaking yesterday, at the formal signing ceremony in Abuja.
The Embedded Generation (EG) license allows the generation of electricity that is directly connected to and evacuated through a distribution system which is connected to a transmission network operated by a System operations Licensee, while Independent Electricity Distribution Network (IEDN) means a distribution network located within the operational area of a distribution network, owned and operated by a licensed successor distribution company.
Amadi further said: “With this regulation, we can actually allow distribution companies (DISCOs) to contract power around themselves, to increase power supply and also reduce losses and address issues of stability.”
The other regulation allows for independent electricity distribution networks. This is important for states that are concerned with rural electrification.
Amadi noted that a significant part of Nigeria wa s yet to be connected to the grid. Even as distribution companies have a mandate to expand their network.
“It is conceivable that some areas do not get the services of the DISCOs because they might be occupied trying to improve their services in the urban areas,” Amadi added.
He explained that while the states have a role to play and since there is still the rural electrification project, independent power distributors can have independent distribution, provided there is no parallel network. This means that they can’t have it in area where DISCOs have physical presence, or areas where the DISCO is preparing to extend its service.
Once there is no physical presence of DISCOs and they are also not ready to move in there, the Act allow independent distribution, either by a state, or a company, or a private individual that applied and was properly licensed to do that.
“We can begin to have significant energy supply through embedded generation using renewable. We heard about Adamawa State Government doing some hydro projects. These regulations allow the hydro projects, instead of going to the grid, they could be localised to serve the area. While we wait for the bulk trader in power, DISCOs under proper arrangement, can begin to contract bilateral power from independent producers who can now embed little power; 10 megawatts, 20 megawatts in those areas. The Nigerian public can now come to the commission to inquire how these regulations work,” he said.
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