Stakeholders seek leeway for captive power generation in Nigeria

Stakeholders in the Nigerian energy sector have called on the federal government, especially regulators of the sector, to create feasible scope that will enable investors to generate electricity for captive consumers in order to unlock economic opportunities.

The experts, who converged on Abuja for a power dialogue organised by Nextier, were not only worried about the persistent cases of grid breakdown in Nigeria but stressed the need for options that would address the challenges of power for industrial zones, entrepreneurs and domestic consumers.

Captive power plant (typically 1WM) is a localised source of power that can be operated off-grid for an energy consumer, particularly power-intensive industries to address energy related challenges.

For the initiative to become feasible in Nigeria, the experts, who were looking at replication of the concept across the country, urged the government to provide a holistic and sustainable policy that would address inherent regulatory challenges and provide financial opportunity that would drive the scheme.

With over 90 million Nigerians allegedly without electricity supply, the collapse of the electricity national grid in the country has remained a critical challenge, especially for manufacturers.

Managing Director, Geometric Power, Agatha Nnaji called on stakeholders to conduct a holistic study that would address possible challenges, including funding and environmental problems.

She stressed the need for alternative energy in the country to provide options for industries.

While the initiative could directly meet the demand of most industrial customers, Nnaji said the initiative would eventually address the challenges of power for people at the rural areas.

According to her the regulators must design a plan that would carry along all the stakeholders, especially the generation and distribution companies.

“We need to find out what we be the best practices for the development of the captive generation market.

Until we find the necessary scope, we will face more challenges. It is doable because I have been to a farm in Benin Republic where they generate their own power but it has to be economically viable,” Nnaji said.

She was optimistic that the initiative could unlock economic activities across the country if the private sector as well as the government develops the right plan for captive generation.

Business Development Manager, Power, Axxela Jide Onakoya said the federal government as well as other state government must look the example of Lagos state in generating power for captive consumers.

In terms of tariff and payment, Onakoya insisted that there was need to address the challenge of tariff and payment to avoid the current challenges faced by distribution companies.

Senior Special Assistant on Energy and Power, Central Bank of Nigeria (CBN), Ebipere Clarke, said the apex bank’s intervention fund for the power sector would ease financial challenges for developers with sustainable plan.

He said the CBN has been concerned about unlocking the economic sector with power but would also require reliable projects that would enable beneficiaries to pay back borrowed fund.