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NERC, Discos adopt embedded generation to cushion electricity shortage

By Emeka Anuforo
09 April 2015   |   12:09 am
The Nigerian Electricity Regulatory Commission (NERC)’s embedded generation regulation allows an independent power producer to embed power within the network of the local distribution company without going through the trouble of connecting to the transmission network.

Managing Director/Chief Executive Officer, Ikeja Electric Distribution Plc, Biodun Ajifowobaje (left); Chairman, Nigerian Electricity Regulatory Commission (NERC), Dr. Sam Amadi and Executive Chairman, North-South Power, Shiroro Hydro, Dr. Olubunmi Peters, during a press briefing on the consultative meeting between NERC and chief executives of distribution/generation companies in Abuja… yesterday. PHOTO: LADIDI LUCY-ELUKPO

New scheme could reduce manufacturers cost by 30%.’ New govt: utilities preach continuity. Discos vow to end estimated billing
‘Discos must secure consumers’ approval before requesting any tariff increase.’ Tariff reduction not 50% across board

Faced with a myriad, the stakeholders in the nation’s electricity industry have adopted the embedded generation concept to immediately procure electricity for customers, while waiting for national grid power to improve significantly.

The Nigerian Electricity Regulatory Commission (NERC)’s embedded generation regulation allows an independent power producer to embed power within the network of the local distribution company without going through the trouble of connecting to the transmission network.

This allows distribution companies to procure small power and dedicate it to ring-fenced customers 24/7 electricity supply. NERC regulation on Embedded Generation permits investors, communities, states and local governments to generate and distribute electricity for their exclusive consumption using facilities of existing electricity distribution companies or independent electricity distribution network operators Yesterday, the electricity distribution companies in the country announced that they have adopted the embedded generation policy and have commenced procurement activities for mini grids to service some of their customers, without resource to the national grid.

At their monthly meeting with the NERC in Abuja yesterday, chief executive officers of distribution companies described embedded generation as the immediate solution to the problem of gas and other associated variables.

Relatedly, the utilities have preached the need for continuity in the power sector, warning that the power sector could not afford to discard of the reforms embarked upon by the current administration. Chief Executive Officer of Ikeja Electricity Distribution Company, Engr. Abiodun Ajifowobaje, who spoke on behalf of the privatised utilities, stressed: “Continuity is essential power is not what you can get right even within the term of the tenure of a President.

It takes careful planning and execution.” Meanwhile, henceforth, distribution companies would not be able to approach the Nigerian Electricity Regulatory Commission for tariff increase approval without first securing the approval of their consumers.

NERC Chairman, Sam Amadi, who briefed press after the Commission’s monthly meeting with CEOs of electricity utilities in the country, noted that Discos must get consumers’ approval before any increase will be considered.

Amadi noted that even when Discos secure the approval of consumers, NERC would still conduct public consultations to validate such approvals before considering any request for tariff increase. “Ultimately, NERC is the one who will give approval,” Amadi stressed.

This, he noted, is for transparency in energy management. He said the approach would ensure that there is consultation and greater transparency in the way tariffs are set.”

On the adoption of embedded generation, he stressed almost all the distribution companies in the country had commenced different level of plans to embrace mini-grids to service some of their customers in the short term.

He said Discos like Eco, Ibadan and Ikeja had reached advanced levels of discussions for procurement of mini-grids an embedded power, stressing that embedded generation could take between 6months to 1 year to conclude.

“We have the embedded generation regulation to enable short term provision of electricity. It will help us to cure the short falls quickly.

It will enable the Discos to establish mini-grids to service industrial consumers also. We are hoping that this would reduce manufacturing costs by at least 30%. It will take care of the shortage for a period of time,” he noted.

He stressed how water level and gas challenges had continued to plague the sector Ajifowobaje noted that many of the Discos only get one third of the power they are allocated to sell to customers.

He said: “We no longer see it as a challenge. We want to see it as opportunities.

Most of us are getting into embedded generation. While we are at it, we want to equitably distribute the power getting to us.” He noted that the cut in electricity tariff by the Regulator was not 50% reduction across board. He said some industrial consumers would get 50%, while others would get 30%, 20% and so on. “NERC has given us the power to suggest tariffs.

But it must be presented to consumers for input and approval before it gets to NERC. “ On efforts to roll out meters, he added: “Before the end of May, we will roll out meters to consumers and the issue of estimated billing will end. 30% of pre-paid meters are bypassed. Many customers will not get pre-paid meters.

They will get smart meters.” CEO of Shiroro Power Plant thanked Discos for the efforts to stabilize the sector, describing them as the bedrock of the electricity market.He noted how generation was still poor because of low water and poor gas supply to plants. He noted the level of work and investment put into the sector, and stressed the need for a little more patience from consumers.