Manufacturers, NERC set for new power deal

AS power outage heightens across the country, the Nigerian Electricity Regulatory Commission (NERC) and the Manufacturers Association of Nigeria (MAN) Tuesday commenced another round of talks to improve electricity supply to the industrial sector and possibly guarantee some reduction in current regime of huge tariff by the manufacturers.

MAN has equally agreed to work with NERC to explore the commission’s proposal for industrial clusters to form Special Purpose Vehicles (SPV) that could procure additional power dedicated to their industrial clusters.

   At a consultative meeting with NERC last Wednesday, the Steel Manufacturing Group segment of MAN had warned that the new tariff order (MYTO 2.1), which became effective last on January, was paralyzing most companies in the country. In view of that, they threatened to shut down their factories if the situation continues.

   However, signals from a meeting between MAN and NERC in Abuja indicate that NERC might release a new tariff structure that would be more “friendly” to industrial operators tomorrow.

   NERC Chairman, Dr. Sam Amadi, told newsmen yesterday that the agency would ensure that the cost of electricity does not destroy the nation’s industrial sector. According to him, “the public forum was last Wednesday, we had an extraordinary technical management meeting and a report will be available on Thursday. That is how soon it is.

   “After that report, we will finalize and communicate to the public. We are very fast and understand that this is about a sector that is critical to the economy. This is also about a reform that is succeeding. We don’t want anything to derail it.

   “At the same time, we will be very clear that our job is to guarantee future sustainability. We are not going to trade off the future of this country on present inconvenience. We must make sure that the price is able to attract investment and that in the meantime it does not destroy a fledging industrial base for the country.”

   In the meantime, NERC has warned all distribution companies against disconnecting manufacturers and other consumers until the matter is resolved. According to Amadi, “no Disco is authorised to disconnect a consumer without following due process. The due process is well established in the regulation that they know.

   “You have to give them notice to pay. If they contest that notice for either over-billing or other reasons, you have to go through the process, otherwise, if you allow for wanton disconnections, it will defeat the purpose of providing access to electricity for Nigerians.

   “So, whether it is MAN or electricity consumers, no distribution company is allowed to indiscriminately disconnect consumers. Our commitment is to fast track complaints. If they have been paying their bills, I think that Discos should exercise patience for a while.”

   On his part, MAN President, Dr. Frank Udemba Jacob, stressed that his members were eagerly awaiting NERC’s decision on the high electricity tariff that was killing their businesses. He pledged to work with NERC to explore the electricity generation Special Purpose Vehicle for industrial clusters.

Embedded generation to the rescue

Similarly, to achieve a significant improvement in electricity supply to consumers, many of the nation’s distribution companies (DISCOS) have started awarding contracts for the construction of power generation facilities aimed at exploring embedded generation within their catchment areas.

   The NERC embedded generation regulation allows an independent power producer to embed power within the network of the local distribution company without connecting to the transmission network. This allows distribution companies to procure small power quantities and dedicate them to ring-fenced customers for a 24-hour electricity supply.

   Amadi noted that the scheme could immediately improve power supply, especially in the short term: “The truth is that electricity in Nigeria has not decreased significantly. If we are doing between 4500 to 3800MWs, depending on situations, then you are not going to have guarantee of very stable electricity.

   “That is why we are talking about this micro grid approach. We need to generate more megawatts by all means. Industrial clusters can generate so that the national grid they receive can be sent to other consumers. Today, we have hope that in the next three-four years, we won’t be talking about this level of power supply. This is because the framework for new capacity is already there.

   “But it takes time – three to four years to build these power plants. Before then, micro grid is the answer. You can get 10MWs from industrial clusters here and the power that they originally consumed would be given to other consumers.”

On pipeline vandalism Meanwhile, the Minister of Power, Prof. Chinedu Nebo, has described gas pipeline vandals as enemies of state who are out to discredit the Federal Government by continuously perpetrating their evil acts.

   Nebo, disclosing this during the commissioning of Hybrid Solar PV/Wind Demonstration Plant at the Regional Training Centre of the National Power Training Institute of Nigeria (NAPTIN) in Kainji, Niger State, called on communities through which gas pipelines run to be more vigilant.

   According to him, the Federal Government has invested hugely in procuring gas-to-power infrastructure for the purpose of increasing electricity supply nationwide. He noted that those who vandalize these installations carry out the nefarious activities in the wee hours of the night, and often in forests in rural communities, to avoid being caught.

   Nebo advised communities to raise their level of participation in protection of government amenities such as gas pipelines, as they are meant for the good of the people and deserve maximum protection by all.

   However, Nebo, who was represented by the Permanent Secretary, Ministry of Power, Ambassador Godknows Igali, stressed that the PV/Wind plant power generating methodology being championed by NAPTIN would not be as susceptible to vandalism because they are to be located within view, unlike gas pipelines that are laid underground over long distances.

   Nebo also applauded the level of civility of Kainji and New Bussa residents, who he noted have maintained over 40 years record of order and peace without vandalism any power installation.

   In his remark, NAPTIN Director-General, Reuben Okeke, restated the institute’s commitment to pursuing rapid development of curricula for the training of personnel on renewable energy, adding that the commissioning of plant proved that the new technology has come to stay in Nigeria. More so, it would be used to train current and in-coming students of NAPTIN.

  Similarly, the Deputy Head of Mission, Embassy of Germany, Mr. Klemens Momkes, said the plant is part of an integral project on clean energy sources, costing about N200 million or 1 million Euros and funded by the German Government.

   According to him, the project is to facilitate technology transfer and create a platform for capacity building in the country. Meanwhile, GIZ Country Director, Dr. Thomas Kirsch, disclosed that the plant is the result of cooperation between NAPTIN, the Federal Ministry of Power and GIZ.

   The successful completion and commissioning of the wind plant, he said, has paved the way for an extended cooperation under the Nigerian Energy Support Programme (NESP), which aims to improve the conditions for investment in renewable energy, energy efficiency and rural electrification.