The
first embedded power plant in the country which is built to generate 13.2
megawatts (MW) of electricity is billed to be commissioned within the next two
weeks, according to sources close to the project.
This
is coming on the heels of the recent efforts put in place by the Nigerian
Electricity Regulatory Commission (NERC) to ensure that the gaps in power
supply in the country are bridged through embedded power generation.
Olaniji
Aisida, the project coordinator, tells BusinessDay that the plant is owned by
First Power Limited, the lease holders on the old Ijora power station in Lagos,
and has two generators with a capacity of about 7.5 MW and 5.5 MW,
respectively.
Within
the station exists the Transmission Company of Nigeria (TCN) evacuation
infrastructure.
Aisida
says the plant is expected to get its gas supply from
Gaslink Nigeria Limited
as a gas supply and purchase agreement (GSPA) has been entered into by both
parties.
The
dual fuel generator (it would use both gas and diesel at different times) has a
guaranteed uptime of 95 percent.
It
was gathered that business concerns that want to partner with First Power by
way of getting power supply from the company are making moves that may
eventually be consummated into power purchase agreement (PPA).
Embedded
power generation refers to power generation which consists of smaller modular
generators using a variety of generation technologies such as solar, wind,
biomass, diesel, low fuel oil (LPFO), high fuel oil (HPFO), crude oil and small
hydro. It is a useful means of dedicating power to high net worth customers,
state and local governments. This is an interventionist scheme that has the
potential to bridge the gap being experienced currently in the power sector.
The
tariff arrangement in this scheme, according to the sources, would be different
from the prevailing tariff currently being operated by the electricity
distributing companies (Discos) across the country. While consumers currently
pay N12 per kilowatt hours, it would not be so with the embedded generation
scheme.
The
tariff regime, according to industry analysts, should be in the region of N24
and N30 per kilowatt hours. This, they say, is only way the scheme can be
successful and attract investors.
Imamuddeen
Talba, head of section, renewable energies, research and development, NERC, who
represented Sam Amadi, NERC chairman, at a recent event on renewable power
generation, explained that embedded generation would be connected to a
distribution network operated by distribution companies licensed by NERC.
He outlined conditions for such connection to
include maximum generation, metering and cost.
“Section
62 of Electric Power Sector Reform (EPSR) Act 2005 stated that permit is needed
for generation of 1MW and above except captive power which is strictly used for
personal consumption,” he said.
The
NERC boss said the commission would soon introduce
competitive charges that would ensure that power generated anywhere could be
sold to any part of the country using the infrastructure of various companies,
stressing that NERC had agreed in
principle that all customers that would be supplied from embedded generation
would be required to pay higher tariff.
Micheal
Derus, consul-general of the German Embassy, also said Nigeria could benefit
tremendously from the initiative when put in place, saying it could help to
bridge the gap in terms of electricity supply in the country as it had done in
advanced countries like Germany.
Dolapo
Kukoyi of Detail Commercial Solicitors said with embedded power generation in
view, Nigeria should be able to achieve its national aspiration within a short
time, reduce technical losses because of proximity to networks system, and deepen
the electricity market.
Businessday
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