A NEW dispensation is under way in the power sector as the Federal Government yesterday opened the coast for private operators to generate and distribute electricity to un-served Nigerians.

For a hitch-free implementation of the new deal, two regulations were unveiled by the government, which addressed areas that may impede the participation of the private sector in the scheme.

Such firms are free to generate or distribute 5,000 kilowatts of electricity or even below.

This came barely a week after the National Privatisation Council (NCP) granted state governments the right to own 49 per cent equities in 11 succession firms of the Power Holding Company of Nigeria (PHCN).

One of the new regulations, which was made public by the Nigerian Electricity Regulatory Commission (NERC) yesterday, empowers small firms to generate electricity while the other authorises independent distribution firms to supply power to un-serviced communities.

This arrangement also allows the firms to provide electricity for their clients without linking up to the national grid.

But before they begin operations, such companies will undertake in writing that the[b] facility of the existing distribution licensee will not be used in their operations.[/b]

They will also ensure that there shall not be any parallel overhead lines to existing facility as well as ensure the safety of equipment, workers and the public.

The NERC also specified that they must have a minimum distribution capacity of the Independent Electricity Distribution Network Operator (IEDNO) of 5,000kw and also show the ability to provide generation capacity for the IEDN.

While the embedded generation regulations deal with direct production of power from small independent power plants, the Independent Electricity Distributions Networks Regulation (IEDNR) relates to the operation of isolated off-grid independent electricity distribution network in rural or urban areas, which are not connected to a distribution network.

Such networks will therefore be operated by system operators to be licensed by NERC.

The regulation applies to all independent electricity distribution systems, their owners, operators, and users of the distribution systems.

It was learnt that the move is designed to meet the electricity need of over 60 per cent of Nigerians, who have no access to power or connected to the national grid. Those connected to the grid are plagued by frequent outages.

The first regulation is the Nigerian Electricity Regulatory Commission for Embedded Generation 2012 while the second is the Nigerian Electricity Regulatory Commission for Independent Electricity Distribution Networks.

The embedded generation rule empowers companies to use diverse energy sources to[b] generate small 10 megawatts and other small plants in rural and urban areas not served by the national grid and distribute direct to communities around them.[/b]

Chairman of NERC, Sam Amadi, said feed-in-tariffs approved by the commission shall be applied for energy embedded generators, and shall be fixed for specified period, subject to periodic reviews and approval by the agency. Metering of customers and embedded generators, he said, shall be mandatory.

A copy of the regulations, which The Guardian obtained yesterday, read in part: “The commission may issue a licence to construct, own, operate and maintain, or to procure the construction, operation and maintenance of an independent electricity distribution system provided that a licence shall not be issued unless the commission is satisfied that there is no existing distribution system within the geographical area to be served by the proposed independent distribution system; where the infrastructure of an existing distribution licensee is unable to meet the demand of customers in the area, the IEDN operator shall satisfy laid-down conditions before the issue of a licence.

http://www.ngrguardiannews.com/index.php?option=com_content&view=article&id=79438:new-era-beckons-firms-to-own-small-power-plants&catid=1:national&Itemid=559

It is a welcome development.The only disadvantage is that Nigerians will have to pay through their nose.Entrepreneurs,this is another business opportunity.Take advantage of it.You can become a distributor of power supply cards.What happened early 2000 is about to repeat it self.This time,not in Telecoms but Power.

This is really a welcome development.Ihope the goverment will be truthful to thier word this time around.

^^^^I hope they get this right. The number of people (60%) who have no access to the national grid is embarrassingly high.

last time I checked, Nigerians will pay any amount for 24hr power

daywatcher:

last time I checked, Nigerians will pay any amount for 24hr power

Don't be so sure. Generally speaking, people won't pay any amount for a product or service. There is always a maximum price which serves as the benchmark which in this case is the cost of generating power with petrol or diesel generators plus the incidentals.

It will be at cut throat prices in the beginning but it will stabilize in future.

na waa. poor nigerians and nairalanders. very very gullible that we believe every crap from these men. how many times will a particular man lie for u to call him a liar?
give them another 2 weeks and ask them questions on this particular topic and u will hear them start another bogus plans.
is it not the same jonathan that declared emergency on the power sector in 2010?
very soon, he will tell us the cabals will not let him give us light.

On the average, a Nigerian spends atleast 10,000 Naira a month on power.

I will pay 50,000 for light per month

I doubt it will cost more than what people spend to run a generator at home and with their businesses. Else it wont be viable to the Investors.

So it is a welcomed development.

If true this is great news. There's a lot of private capacity out there and I know people who will take a quick buck for their extra power. However to make this work we need a smarter grid that evacuate as well as deliver power simultaneously as well as a metering system to evaluate what each person is injecting and of course strong regulation to guarantee quality and fair prices.

I've said it several times. Power is the easiest sector to privatise and invest in. Unlike telecoms, power is consumed continuosly and the break even point viz. number of consumers is low. A 5,000 Mw plant may be several times more efficient than a 5,000 kw plant but it is a strategically riskier investment and does no good for time scale and capital outlay.

On the average, a Nigerian spends atleast 10,000 Naira a month on power.

I will pay 50,000 for light per month

may be u own a company?

JUO:

may be u own a company?

He dosnt need to own a company.
10k a mnth is an average of about 335 naira a day on fuel and ppl spend more than that.

Okija_juju:

On the average, a Nigerian spends atleast 10,000 Naira a month on power.

I will pay 50,000 for light per month

you are [size=38pt]MAD[/size]

I am surprised that no one is seeing the restrictions in that message. u can only biuld plants and supply to areas not already covered by a distribution network. okay current stats put it at 60% percent but what business/industries lie in d hinterlands with no previous distribution? u and I with our SME's and businesses can't benefit from this limited liberalisation.
I don't think any investor will sink funds to generate and distribute electricity to a remote untapped village in Taraba state populated by subsistent farmers who have no phones or laptops to charge or no mechanised mill to power.

the solution lies in decentralising the existing grid and making it possible for generation and transmission coys to court neighborhood with 24/7 power, low tariffs and other smart businesses, and govt watch out for currupt practices. setting tariff ceilings with MYTO and NERC will further send investors away.

mkmyers45:

It will be at cut throat prices in the beginning but it will stabilize in future.

In 2001, my father bought his SIM card at N13,000.
In 2011, I'm buying mine at 200 card

Okija_juju:

On the average, a Nigerian spends atleast 10,000 Naira a month on power.

I will pay 50,000 for light per month

I will do the same too if its stable 24hours light

denitro:

you are [size=38pt]MAD[/size]

Huh? Do you know the value of 24hours/7days so? Mtseewwwwwwwww

plenty grammer

[b][/b] no worry my people. My company go give una 24hour everyday light for just 500
hundred naira.