Nigeria Mandates 50% Renewable Energy Procurement In Electricity Sector

In a giant leap for Nigeria’s power sector, the country’s government has enacted landmark regulation to mandate electricity distribution companies to acquire a minimum percentage of electricity from renewable energy sources.

The Nigerian Electricity Regulatory Commission recently approved feed-in tariff regulations for renewable energy sourced electricity. As per the provisions of the regulations, electricity distribution companies will be required to source at least 50% of their total procurement from renewable energy sources. The Commission has also mandated that the balance 50% electricity would have to be sourced from Nigerian Bulk Electricity Trading Company.

The commission has also defined the projects which would be allowed to sell the ‘eligible’ renewable energy under this mandate. Electricity procured from projects with capacity between 1 MW and 30 MW would be recognised as power from renewable energy. Renewable energy projects with over 30 MW capacity would have to fulfil some additional requirements. Provisions for auction of such large projects have also been included in the regulations.

Last year, the Nigerian Government received pledges from three companies to set up a total of 1 GW of solar power capacity across the country. The entire program will include large utility-scale power projects as well as distributed power projects.

Also, SkyPower and FAS Energy signed a series of agreements to set up 3 GW of solar power capacity in the country. This capacity will be added through utility-scale projects and represents an investment worth $5 billion.

In late November 2014, two US-based companies pledged to set up a total solar power capacity of 1.2 GW by 2017. The projects will require a cumulative investment of $2 billion dollars and once operational will generate enough power to meet the demands of 1 million homes in the country.