In a significant move to address Nigeria’s chronic power shortages, the Nigerian Electricity Regulatory Commission (NERC) has granted permits to several companies for the development of mini-grid electricity generation projects. These initiatives are expected to play a crucial role in improving power supply, especially in remote and off-grid areas.
According to the NERC, nine new off-grid generation licenses were issued in the first quarter of 2024, with a combined capacity of 109.69 megawatts. Additionally, three new trading licenses were granted.
Among the companies that received permits is Golden Penny Power Limited, which has been authorized to build six off-grid gas plants in Lagos, Oyo, Ogun, and Cross River states. These plants will have a total capacity of 100 megawatts.
MTN Communications Nigeria Limited has also been granted a permit to construct four captive generation plants in Lagos State, with a combined capacity of 15.94 megawatts. Captive power generation permits are issued to entities that aim to generate power for their own consumption rather than for sale to third parties.
Other companies that have been granted permits for captive power generation include SweetCo Foods Limited, African Steel Mills Nigeria Limited, West African Ceramics Limited, Royal Engineered Stones Limited, and Armilo Plastics Limited.
Mini-Grid Development and Renewable Energy
The NERC has been actively encouraging the development and utilization of renewable energy through the issuance of permits and registration certificates for mini-grid projects. A mini-grid is a localized electricity generation and distribution system that operates independently from the main grid.
Section 165(1)(m) of the Electricity Act 2023 empowers the NERC to award mini-grid concessions to renewable energy companies to serve specific geographical locations. The commission has issued three mini-grid permits and two registration certificates in the first quarter of 2024.
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Metering and Regulation
In addition to issuing permits for mini-grid projects, the NERC has also certified six Meter Service Providers, including four meter installers and two meter manufacturers. Meter Service Providers are entities that are authorized to manufacture, supply, install, and maintain electric energy meters.
The commission has also issued one regulation and 36 new Orders in the first quarter of 2024. These include regulations related to eligible customers, multi-year tariff orders for distribution companies, and performance improvement plans for the Transmission Company of Nigeria.
Impact on Nigeria’s Energy Sector
The issuance of new mini-grid permits by the NERC is a significant step towards improving Nigeria’s power supply. By diversifying the country’s energy mix and increasing access to electricity in remote areas, these projects have the potential to boost economic growth, create jobs, and improve the quality of life for millions of Nigerians.
The NERC’s efforts to promote mini-grid development and improve the overall efficiency of the electricity sector are expected to have a positive impact on Nigeria’s economy and quality of life. As the country continues to transition towards a more sustainable and reliable energy supply, the NERC’s role in regulating and overseeing the industry will become increasingly important. The NERC will need to continue to play a proactive role in supporting the development of mini-grid projects and ensuring that they are implemented effectively.
