By Prince Okafor

POWER for All, a global coalition of companies and civil society organisations has expressed optimism over the new regulations for electricity mini-grids by the Nigerian Electricity Regulatory Commission (NERC), stressing that it will enhance investment in the power sector.

Mini-grids are electricity supply systems with their own power generation capacity, mostly from renewable energy, supplying more than one customer and can operate either in isolation from or connected to an existing distribution network.

The regulations, which are the country’s first for mini-grids, were the result of engagement between NERC and industry stakeholders, covers the licensing, tariff and technical standards for all mini-grids from 0kW to 1MW.

The former Power Minister, Barth Nnaji, had said during a Natural Gas Business Forum in Lagos, that hostile operating environment and regulatory challenges are the foremost reasons why Nigeria’s power sector is not attractive to investors.

He said the Federal Government had not addressed major issues that would guarantee the return on investment, citing non-cost-reflective tariff, gas constraints, transmission constraints, non-credit worthiness of the distribution companies, over leveraged power assets, among others, raise the fear of investors.

However, reacting to the new regulations for electricity mini-grids, the Nigeria Country Manager for Power for All, Ms. Ify Malo, said: “The regulations will go a long way to boosting investment in renewable energy through mini-grids and providing electricity to consumers in underserved and unserved areas. In particular, the cost-reflective tariffs and clearly defined procedures for obtaining permits will encourage solar mini-grid developers.”

She noted that, “The regulations also define rights for communities being connected to mini-grids in order to protect them, which will encourage communities to install mini-grids for power supply.”

Similarly, founder and Chief Executive Officer of Nigerian mini-grid developer GVE, Mr. Ifeanyi Orajaka, said: “The signing of the mini-grid regulation into law, marks the beginning of the much-needed disruption that will eventually ensure that all Nigerians, irrespective of the region of abode, will have access to stable and reliable electricity.

Orajaka stated that this is a bold step from the Federal Government, adding that “It will go a long way in attracting private investments that will solve Nigeria’s electricity crisis.”

Also, the CEO of Arnergy, a Lagos-based renewable energy, and a solar mini-grid developer, Mr. Femi Adeyemo, said: “The new mini-grid regulation is an indication that the Nigerian government is thinking of decentralized renewables in her electrification plan energy mix. Via the new regulations, adoption of off-grid renewable energy in Nigeria is poised to increase localized, rugged, reliable, cost-effective and easy-to-deploy electricity to hospitals, schools, and rural communities enhancing the overall development of the country.”

Power for All, a global coalition of companies and civil society organisations campaigning to scale distributed renewable energy, has lauded the new regulations for electricity mini-grids by the Nigerian Electricity Regulatory Commission

Power for All promotes decentralized renewable energy as the fastest, most cost-effective and sustainable approach to universal energy access. It is present in six countries and has its headquarters in California, USA.

In Nigeria, Power for All has been instrumental in the establishment of the Renewable Energy Association of Nigeria (REAN) to enable the private sector be a part of renewable energy policy formulation, supporting the Rural Electrification Agency (REA) to integrate distributed renewable energy into its work and facilitating action-oriented collaborations between stakeholders working to build sustainable DRE markets and increase energy access.

Source: http://www.vanguardngr.com/2017/06/nercs-mini-grid-regulation-improve-electricity-investment-industry-stakeholders/

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Great step in right direction for renewable energy. Anyway this incentives will morencourage options for schools and hospitals. Im guessing this would include non renewable energy aswell. These type of policies give incentives for greater electrification.

Anyway smart guys comment if you please Omohayek mapet deomelo.

Ps: I read through your arguements hopefully this helps you see his point. This regulation shows how his scenario would play out.

Pesuzok:

Why cant you simply answer the question on how hospitals can run off grid in Nigeria apart from using diesel engine powered generators.

mapet:

6. Even if the hospital cannot afford to build power or solar-plant or wind-mill, there are private Gencos who will build power-plants and supply to customers

Blue3k:
Great step in right direction for renewable energy. Anyway this incentives will morencourage options for schools and hospitals. Im guessing this would include non renewable energy aswell. These type of policies give incentives for greater electrification.

Anyway smart guys comment if you please Omohayek mapet deomelo.

Ps: I read through your arguements hopefully this helps you see his point. This regulation shows how his scenario would play out.

This is a good start, but 1MW isn't very much, and power generation is a business which really benefits from economies of scale. Mini-grids are better than everyone running their own generators, but they still won't be enough to get the power costs of Nigerian businesses low enough for them to become competitive with foreign firms, and domestic companies that are export-oriented are what we need the most.

By the way, I find it amusing to see statements by Barth Nnaji which reinforce what I've mentioned several times on Nairaland: that the problems with the power sector have nothing to do with a lack of engineering expertise, but with bad regulations that heavily discourage investment, tariff regulations that make cost recovery impossible, and a privatization scheme that sold assets to under-capitalized domestic operators instead of targeting international firms with deep pockets. I will also add that Buhari's stupid insistence on a fixed, artificial Naira/Dollar rate has made an already bad situation worse.

omohayek:

Blue3k: :
Great step in right direction for renewable energy. Anyway this incentives will morencourage options for schools and hospitals. Im guessing this would include non renewable energy aswell. These type of policies give incentives for greater electrification.

Anyway smart guys comment if you please Omohayek mapet deomelo.

Ps: I read through your arguements hopefully this helps you see his point. This regulation shows how his scenario would play out.

This is a good start, but 1MW isn't very much, and power generation is a business which really benefits from economies of scale. Mini-grids are better than everyone running their own generators, but they still won't be enough to get the power costs of Nigerian businesses low enough for them to become competitive with foreign firms, and domestic companies that are export-oriented are what we need the most.

By the way, I find it amusing to see statements by Barth Nnaji which reinforce what I've mentioned several times on Nairaland: that the problems with the power sector have nothing to do with a lack of engineering expertise, but with bad regulations that heavily discourage investment, tariff regulations that make cost recovery impossible, and a privatization scheme that sold assets to under-capitalized domestic operators instead of targeting international firms with deep pockets. I will also add that Buhari's stupid insistence on a fixed, artificial Naira/Dollar rate has made an already bad situation worse.

1. Sorry my good folks. These long public holiday was road trips and golf for me.......no internet not to talk of NL. I just got back to town yesterday............

2. My apologies also to Pesuzok, who I believe in retrospect, I might have been too hard in my reaction

3. Let me add some perspectives to @omohayek's submission. The biggest misconception many people make about the power sector is that they see it as bolts, nuts, wires and cables ecosystem. So you will not wonder too far when you hear stuffs like "The ministry of power should be headed by an Engineer" (pls hold this line of thinking aside for x-ray)

4. I believe we need to domesticate our solution for power. We cannot go full blow capital investments, when we cannot raise the capital either in equity, debt or mix of it to build for example a 10GW power. We should then allow the mini-Grid model to spring up in multiples. Who knows many of these mini-grids could be consolidated into mega-Grids in future

5. The grid system we currently run is not a good incentive for power investments. What the GEJ govt did not get was that power business is totally different from GSM business. Simply "privatizing" and waiting for "Dollar rain returns" is not the power model. Also the ability of some "brief-case investors" (a typical Emeka Offor's Coy) to raise the Licensing fee does not translate to their ability to run the business. That is why Discos have become a burden to the value chain, rejecting power sent by Gencos on the excuse that they can not distribute what they cannot afford to pay for. I am part of the Electricity sub-committee in my Estate. Ikeja Disco flatly told us they cannot afford to purchase card meters, and the work around we came to is that each individual will purchase the meters from a recommended Nigeria manufacturer, Ikeja Disco will now come to install it. We are even arguing that Ikeja Disco should substitute the cost of the meter (50k) for electricity credit and they are yet to get back to us on that. Pray tell, which Disco will vie for license and will not have accomodated the cost of card meters into their economics? Knowing fully well that card meters is central to their revenue drive. How would government have licensed such Discos without putting things like provisioning of meters as a precondition for not revoking the License?

6. Wrt Prof. Barth Nnaji's statement, he spoke from personal experience both as a minister and as a player. His GEJ's govt gave his company (Geometrics) license to generate and supply power to an axis. This was at that time a pilot to power programme model to stimulate mini-Gencos and Discos. The govt. under a later privatisation programme now offered Disco license to Emeka Offor's coy covering the same axis. That axis was grounded for 2yrs+ due to court cases. It was only when the current govt came in and the sanity and lawyers in Fashola and Osinbajo pursued an out-of-court settlement, else these case would have gone on for years, putting that axis on the back foot. I wonder why the previous govt did not see the impact of the mess that created.

7. From my argument in 2 above, the power sector is an ecosytem of Business, Regulation, Investments......and I dare argue that bolts, nuts, wires and cables are at the last mile. For those of you that argue for an Engineer to head the Ministry of Works and Power, you speak in ignorance. Such a ministry should be headed by someone with demonstrable leadership, business and regulation knowledge, acumen, skill and experience (be it an Engineer or not)

8. @Blue3K, suggestion for Incentives - We can copy and domesticate a model already practised in some European countries which drives their renewable energy aspirations and business. For example, people using Solar panels generate excess power, especailly during the sunny days, which in most cases are dissipated and wasted. After the inverter battery are full, a devices cuts off supply from the solar panels to the battery, to protect the battery from "over charging" and explosion. What is done is some countries is that a special divice is put int the solar panels such that, once batteries are fully charged, excess power that eitherto was dissipated are now reinjected back into the Grid. A device captures the volume reinjected back into the grid which is calculated as credit to the home owner. Such credit can be cashed, exchanged for power credit or tax breaks.

Thanks for bringing much-needed knowledge to the discussion! It's too bad that the great mass of people most in need of enlightening will never bother to read any of this, not when they can continue indulging the same low-effort, thinly-disguised tribal attacks.

mapet:


1. Sorry my good folks. These long public holiday was road trips and golf for me.......no internet not to talk of NL. I just got back to town yesterday............

2. My apologies also to Pesuzok, who I believe in retrospect, I might have been too hard in my reaction

3. Let me add some perspectives to @omohayek's submission. The biggest misconception many people make about the power sector is that they see it as bolts, nuts, wires and cables ecosystem. So you will not wonder too far when you hear stuffs like "The ministry of power should be headed by an Engineer" (pls hold this line of thinking aside for x-ray)

4. I believe we need to domesticate our solution for power. We cannot go full blow capital investments, when we cannot raise the capital either in equity, debt or mix of it to build for example a 10GW power. We should then allow the mini-Grid model to spring up in multiples. Who knows many of these mini-grids could be consolidated into mega-Grids in future

5. The grid system we currently run is not a good incentive for power investments. What the GEJ govt did not get was that power business is totally different from GSM business. Simply "privatizing" and waiting for "Dollar rain returns" is not the power model. Also the ability of some "brief-case investors" (a typical Emeka Offor's Coy) to raise the Licensing fee does not translate to their ability to run the business. That is why Discos have become a burden to the value chain, rejecting power sent by Gencos on the excuse that they can not distribute what they cannot afford to pay for. I am part of the Electricity sub-committee in my Estate. Ikeja Disco flatly told us they cannot afford to purchase card meters, and the work around we came to is that each individual will purchase the meters from a recommended Nigeria manufacturer, Ikeja Disco will now come to install it. We are even arguing that Ikeja Disco should substitute the cost of the meter (50k) for electricity credit and they are yet to get back to us on that. Pray tell, which Disco will vie for license and will not have accomodated the cost of card meters into their economics? Knowing fully well that card meters is central to their revenue drive. How would government have licensed such Discos without putting things like provisioning of meters as a precondition for not revoking the License?

6. Wrt Prof. Barth Nnaji's statement, he spoke from personal experience both as a minister and as a player. His GEJ's govt gave his company (Geometrics) license to generate and supply power to an axis. This was at that time a pilot to power programme model to stimulate mini-Gencos and Discos. The govt. under a later privatisation programme now offered Disco license to Emeka Offor's coy covering the same axis. That axis was grounded for 2yrs+ due to court cases. It was only when the current govt came in and the sanity and lawyers in Fashola and Osinbajo pursued an out-of-court settlement, else these case would have gone on for years, putting that axis on the back foot. I wonder why the previous govt did not see the impact of the mess that created.

7. From my argument in 2 above, the power sector is an ecosytem of Business, Regulation, Investments......and I dare argue that bolts, nuts, wires and cables are at the last mile. For those of you that argue for an Engineer to head the Ministry of Works and Power, you speak in ignorance. Such a ministry should be headed by someone with demonstrable leadership, business and regulation knowledge, acumen, skill and experience (be it an Engineer or not)

8. @Blue3K, suggestion for Incentives - We can copy and domesticate a model already practised in some European countries which drives their renewable energy aspirations and business. For example, people using Solar panels generate excess power, especailly during the sunny days, which in most cases are dissipated and wasted. After the inverter battery are full, a devices cuts off supply from the solar panels to the battery, to protect the battery from "over charging" and explosion. What is done is some countries is that a special divice is put int the solar panels such that, once batteries are fully charged, excess power that eitherto was dissipated are now reinjected back into the Grid. A device captures the volume reinjected back into the grid which is calculated as credit to the home owner. Such credit can be cashed, exchanged for power credit or tax breaks.

omohayek:

This is a good start, but 1MW isn't very much, and power generation is a business which really benefits from economies of scale. Mini-grids are better than everyone running their own generators, but they still won't be enough to get the power costs of Nigerian businesses low enough for them to become competitive with foreign firms, and domestic companies that are export-oriented are what we need the most.

Yeah the power cost would suck. It's similar to how one Dangote companies use coal to generate their own power.

mapet:

@blue3k, suggestion for Incentives - We can copy and domesticate a model already practised in some European countries which drives their renewable energy aspirations and business. For example, people using Solar panels generate excess power, especailly during the sunny days, which in most cases are dissipated and wasted. After the inverter battery are full, a devices cuts off supply from the solar panels to the battery, to protect the battery from "over charging" and explosion. What is done is some countries is that a special divice is put int the solar panels such that, once batteries are fully charged, excess power that eitherto was dissipated are now reinjected back into the Grid. A device captures the volume reinjected back into the grid which is calculated as credit to the home owner. Such credit can be cashed, exchanged for power credit or tax breaks.

That would be great in dry season especially since there's alot of sunlight in certain spots.

Pesuzok:

Why cant you simply answer the question on how hospitals can run off grid in Nigeria apart from using diesel engine powered generators.

No, there are 5 IPPs in Lagos built by Fashola to specifically cater to hospitals, schools, court houses, water works and other public facilities.

deomelo:



No, there are 5 IPPs in Lagos built by Fashola to specifically cater to hospitals, schools, court houses, water works and other public facilities.

Thank you for the enlightenment. How does the IPPs get their gas?

NOW you are talking

Mapet wrote:

7. From my argument in 2 above, the power sector is an ecosytem of Business, Regulation, Investments......and I dare argue that bolts, nuts, wires and cables are at the last mile. For those of you that argue for an Engineer to head the Ministry of Works and Power, you speak in ignorance. Such a ministry should be headed by someone with demonstrable leadership, business and regulation knowledge, acumen, skill and experience (be it an Engineer or not)

Haba! MAPET this wonderful article that you wrote, why spoil it with Number 7? This your article needs to be published on Punch, Vanguard and Guardian. But remove number 7.

The truth is that Nigeria will never get out of this mess ahe is enmeshed in without appointing a highly experienced Electrical Engineer who has spent at least 2 decades of his life in Electrical Power development. Who equally has strong marketing talents.

You cannot make another profession who is not a medical doctor to be Minister of Health. Doctors will ground the ministry for you. Remember Yaradua who wanted Dora to be his Health Minister. If that is how Electrical Engineers in Nigeria about Power Ministry, electricity would have be in excess.

I am a Coren-certified Civil/Structural Engineer. However I was part of the FG project that built about 600 High-tension Towers (Pylons) from Geregu - Ajaokuta -Lokoja- Abaji - Gwagwalada - to Apo, Abuja. My work then was to verify that all the foundations being built by the Foreign Contractor was in accordance with what FG was paying for. There were 3 Booster Sub stations in Ajaokuta, Lokoja & Gwagwalada. I also supervised all their foundations.

During this project period, I discovered that if you don't put your foot down, the foreigners will dupe Nigeria blue and Black with support from some guys from the ministry and from Senate & Rep's. Many times we had oversite visits from them. Thank God for EFCC and BPP. The man heading BPP was Engr Emeka Eze. God bless that man. We are talking of very strong forces. But glory be to God the projects were completed successfully.
But you can see that all it would take to create constant electricity is to have a CORE Professional Electric Engineer heading the Power Ministry. Prof Barth Nnaji tried. He is a scientist not an Engineer. Scientists research to find what is existing. But Engineers create what is not existing.

opalu:
Mapet wrote:


Haba! MAPET this wonderful article that you wrote, why spoil it with Number 7? This your article needs to be published on Punch, Vanguard and Guardian. But remove number 7.

The truth is that Nigeria will never get out of this mess ahe is enmeshed in without appointing a highly experienced Electrical Engineer who has spent at least 2 decades of his life in Electrical Power development. Who equally has strong marketing talents.

You cannot make another profession who is not a medical doctor to be Minister of Health. Doctors will ground the ministry for you. Remember Yaradua who wanted Dora to be his Health Minister. If that is how Electrical Engineers in Nigeria about Power Ministry, electricity would have be in excess.

I am a Coren-certified Civil/Structural Engineer. However I was part of the FG project that built about 600 High-tension Towers (Pylons) from Geregu - Ajaokuta -Lokoja- Abaji - Gwagwalada - to Apo, Abuja. My work then was to verify that all the foundations being built by the Foreign Contractor was in accordance with what FG was paying for. There were 3 Booster Sub stations in Ajaokuta, Lokoja & Gwagwalada. I also supervised all their foundations.

During this project period, I discovered that if you don't put your foot down, the foreigners will dupe Nigeria blue and Black with support from some guys from the ministry and from Senate & Rep's. Many times we had oversite visits from them. Thank God for EFCC and BPP. The man heading BPP was Engr Emeka Eze. God bless that man. We are talking of very strong forces. But glory be to God the projects were completed successfully.
But you can see that all it would take to create constant electricity is to have a CORE Professional Electric Engineer heading the Power Ministry. Prof Barth Nnaji tried. He is a scientist not an Engineer. Scientists research to find what is existing. But Engineers create what is not existing.

Bros,

Trust me, I fully respect your profession as an Engineer and your valid input into the profession. Also if you checked my post you will have seen the way I framed it

....Such a ministry should be headed by someone with demonstrable leadership, business and regulation knowledge, acumen, skill and experience (be it an Engineer or not)

So the summary of my arguments are thus
1. There is a clear difference between LEADERSHIP and "MANAGER-SHIP". You ever wondered why many top executives who have put in many years into their career, are primed for the top, sent to places like Havard Business Schools or other top rated institution some with special focus on leadership development?
2. Secondly I addressed my argument specifically premised on having a full view of the value-chain. The power sector in Nigeria is heavily laden on the Business, Regulation and Customer Service side, which is largely underdeveloped and complicated. Engineering acumen plays a little in the midst the complexities in contracts, litigations, regulations and market development requirements.

3. We may need to reassess our paradigm and have a necessary shift. Who says a "non-doctor" cannot head the ministry of health? Forget about the politics, if Y'Ardua had made Dora the Minister of Health, it would indeed have been a bold yet progressive move (meanwhile, for personal reasons I am not so much a Dora fan, but I acknowledge her good works). If we assess our ministry of health over the years, headed by Doctors, can we sincerely say we had that basic to breath-taking Health in the country? I love the American model that clearly delineates the Management/Leadership lines from the Doctors lines in many of their hospitals, thereby Hospitals are run by administrators (having more of leadership/business capabilities), while the Doctors are left to specifically face the business of Healing. Even right here in Nigeria, the Pharmacists are questioning the rationale why only medical doctors should be the Managing Directors of hospitals. Check the best government run-hospitals in Nigeria, even when you discount govt's input, you will discover that wanton spate of ineptitude in management (hospitals run by doctors). Our doctors do not even (seemingly) understand the concept of bed-space management, patient turn-around-time etc hence you get to those hospitals by 5.00a.m. and may end up seeing Doctor at 5.00p.m.

4. Yes an Engineer will be ideal to head the ministry of power (just like any other quality professional) but he must have the requisite leadership qualities and exposure matched with breadth of business acumen

Pesuzok:

Thank you for the enlightenment. How does the IPPs get their gas?

There are gas vending companies(mini-retailers) (e.g. GasLink) who have networks of pipelines from what is called the city-gate (point where the bulk supplier brings if for off-take) running underground and connected to hospitals, factories and others (like Estates)

Another option is Trucking. Dedicated gas trucks run trips to-fro the City-Gate

mapet:


There are gas vending companies(mini-retailers) (e.g. GasLink) who have networks of pipelines from what is called the city-gate (point where the bulk supplier brings if for off-take) running underground and connected to hospitals, factories and others (like Estates)

Another option is Trucking. Dedicated gas trucks run trips to-fro the City-Gate

Thank you for this knowledge, I never knew such existed.

http://www.oandoplc.com/portfolio-item/gaslink-nigeria-limited/

mapet:


Bros,

Trust me, I fully respect your profession as an Engineer and your valid input into the profession. Also if you checked my post you will have seen the way I framed it


So the summary of my arguments are thus
1. There is a clear difference between LEADERSHIP and "MANAGER-SHIP". You ever wondered why many top executives who have put in many years into their career, are primed for the top, sent to places like Havard Business Schools or other top rated institution some with special focus on leadership development?
2. Secondly I addressed my argument specifically premised on having a full view of the value-chain. The power sector in Nigeria is heavily laden on the Business, Regulation and Customer Service side, which is largely underdeveloped and complicated. Engineering acumen plays a little in the midst the complexities in contracts, litigations, regulations and market development requirements.

3. We may need to reassess our paradigm and have a necessary shift. Who says a "non-doctor" cannot head the ministry of health? Forget about the politics, if Y'Ardua had made Dora the Minister of Health, it would indeed have been a bold yet progressive move (meanwhile, for personal reasons I am not so much a Dora fan, but I acknowledge her good works). If we assess our ministry of health over the years, headed by Doctors, can we sincerely say we had that basic to breath-taking Health in the country? I love the American model that clearly delineates the Management/Leadership lines from the Doctors lines in many of their hospitals, thereby Hospitals are run by administrators (having more of leadership/business capabilities), while the Doctors are left to specifically face the business of Healing. Even right here in Nigeria, the Pharmacists are questioning the rationale why only medical doctors should be the Managing Directors of hospitals. Check the best government run-hospitals in Nigeria, even when you discount govt's input, you will discover that wanton spate of ineptitude in management (hospitals run by doctors). Our doctors do not even (seemingly) understand the concept of bed-space management, patient turn-around-time etc hence you get to those hospitals by 5.00a.m. and may end up seeing Doctor at 5.00p.m.

4. Yes an Engineer will be ideal to head the ministry of power (just like any other quality professional) but he must have the requisite leadership qualities and exposure matched with breadth of business acumen

I think you have more superior argument. Number 3 and 4 above were the knock-out points for me.
There isn't any measurable advantage of choosing a Medical Doctor over a Prof Dora or someone with outstanding performance with the managerial acumen. The deadness of the Nigerian Health sector speaks volumes.
(I am a Dora fan. RIP to her).