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DISCOs To Begin Mini-Grids Development


By Ebitonye Akpodigha

The Nigerian Electricity Regulatory Commission has disclosed that power distribution firms in the country will soon begin the development of mini-grids to boost electricity supply to households, businesses and institutions.

This came amid a report from the System Operator that the total electricity generation in the country dropped to 3,894.40MW as of 6am on Friday, from 4,229MW recorded on October 2. The nation achieved its peak generation of 5,074.70MW on February 2, 2016, according to the Transmission Company of Nigeria.

NERC said in a Draft Mini-Grid Regulation 2016 obtained by one of our correspondents on Friday that electricity distribution companies could now use mini-grids as a bridge technology to accelerate their electrification activities.

NERC said the mini-grid regulation was specifically designed to accelerate electrification in areas without any existing distribution grid and areas with an existing but poorly electrified or non-functional distribution grid, especially but not limited to rural areas.

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Mini-grid means any electricity supply system with its own power generation capacity, supplying electricity to more than one customer and which can operate in isolation from or be connected to a distribution licencee’s network.

Within the regulations, the term mini-grid is used for any isolated or interconnected mini-grid generating between zero kilowatt and one megawatt of generation capacity.

NERC said, “If the power distributed by the isolated mini-grid is larger than 100 kW, the mini-grid developer will need to apply for a mandatory permit. If the generation capacity of the power station installed is larger than 1MW, the plant is not a mini-grid under this regulation and other regulations apply.”

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To encourage mini-grid development, the commission said cost-reflective retail tariffs would be utilised, adding that tariffs would be higher than the current electricity distribution company’s retail tariffs.

The commission, however, said the tariffs would be lower than any electricity supply of the same quality generated from conventional sources in such areas.

It said, “This regulation is suitable for any business model or technology that mini-grid operators may wish to implement.

“The DisCos stand to benefit from mini-grid operations and some of these benefits include the development of the DisCos’ licensing areas, which are not being exploited at no cost to the DisCos pending when they are ready to extend their operations to such areas. At such time, demand would have increased to attractive levels for profitable operation, and customers will be used to paying for electricity and complying with the safety requirements.”

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Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan.

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