Transcript SOLAR POWER REGULATORY CHALLENGES Final

VIABILITY OF SOLAR ENERGY BASED
ELECTRICITY GRID- REGULATORY
CHALLENGES AND OPPORTUNITIES
Nigerian Electricity Regulatory
Commission , Abuja
Presentation at the Nigeria Solar PV conference
held at the Lagoon, Ozumba Mbadiwe, Victoria Island, Lagos. 13th November 2014
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Outlines
1.
Introduction
2.
Solar Energy-Based Power Supply
3.
Barriers
4.
Policies/Regulatory Framework
5.
Incentives
6.
The challenges of Grid Connected Solar Energy Power
7.
Conclusion
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Introduction
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Electricity is a required input for economic growth and an
indicator of the level of development of a country
A successful economy depends on secure, safe and efficient
supply and use of electricity
Access to electricity in the rural area will reduce the rural –
urban drift and enhance development of rural economy
Nigeria has enormous solar energy potential as shown in the
map below.
However it is not currently exploited in significant capacity
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Yearly average of daily sums of global irradiation in Nigeria
Source: European Commission, Joint Research centre
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Barriers
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Grid supplies are usually the cheapest option in areas
with high load densities, as well as in areas near the
grid.
However, a number of challenges militates against gridconnected solar-energy- sources Electricity supply
 High
costs of installation and wiring provided by utilities are high,
 Large land area required
 Not dispatchable (can not respond to automatic generation control
signals from the control center)
 Connecting
small, isolated villages to a grid can be expensive
because of the necessary investment in transmission lines, poles,
transformers, and other infrastructure
 Solar PV power come in relatively small size and are best connected
to low voltage lines whereas NBET buys power only at transmission
voltage
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Policies
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The National Energy Policy provides for :
 Increase
renewable share of power supply
 The
Draft Renewable energy master plan provides for 18% of the
electricity Installed capacity from renewable energies not including
the existing large hydropower by the year 2020.
 Key
policies to drive the development of solar are as follows:
– The nation shall effectively harness solar energy resources and integrate them
with other energy resources.
– The nation shall promote the use of efficient solar energy conversion
technologies, such as use of photo-voltaic and concentrated solar panels for
power generation.
– The nation shall promote solar energy generation for productive use.
– The nation shall intensify efforts to increase the percentage of solar energy in
the present energy mix.
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General Incentive
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The following incentives are implied in the feed-in tariff.
 Guaranteed
 Priority
market
Grid connection and offtake
 Simplified
Licensing /permit process
 Concessionary
 Facilitated
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tariff rates
land acquisition/ site access
Other recommended policy incentives include
 Tax
holidays
 Import
duty exemptions
 Investment
Tax Credits
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Regulatory instruments provided by NERC
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Feed in Tariff methodology
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Draft Standard PPA
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Draft Licensing guideline
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Interconnection guidelines
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Draft Incentive proposal for RE
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Embedded generation regulation.
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Feed-in Tariffs
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Feed-in tariffs refer to a minimum guaranteed price per
unit of produced electricity as approved by the regulator,
to be paid to the producer, or as a premium in addition to
market electricity prices.
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Regulatory measures are usually applied to impose an
obligation on electricity utilities to pay the (independent)
renewable energy power producer a price as specified
by the government.
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The level of the tariff is commonly set for a number of
years to give investors security on income for a
substantial part of the project lifetime
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Conclusion
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Nigeria is currently assessing the various regulatory, policy and
incentive options, given that each approach has its pros and cons.
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