The Nigerian Electricity Regulatory Commission (NERC) will no longer issue power generation licences without clear evidence that the developer has all necessary inputs in place to ensure projects will reach commercial operation and deliver electricity.
The regulator has been repeatedly criticised for the many non-performing power licences that it has issued, with licensees often blaming their inactivity on inability to access fuels, such as gas, or finances, or even transmission infrastructure.
NERC’s declaration was made by its chairman, Sam Amadi yesterday.
Amadi said, “Many of the licensees have not been able to develop or produce power four to five years after receiving their licence. Many have their projects in places where they can’t access a gas supply or where there are no transmission facilities.
“Going forward, we are now building a system that allows for systematic planning of power. This means that we are no longer going to be licensing people except where the feedstock, transmission and everything else is in place.
“So, the regulation, which we are proposing, is to streamline a bulk procurement guideline, and that guideline will now tell us how to procure power at the least cost in a competitive way.”
NERC has so far issued over 40 licences to potential independent power producers for the supply of new grid-connected generation capacity totaling more than 10 000 MW.
Amadi, however, is confident the new regulation to streamline procurement of power will result in a cheaper cost of power because licences would be granted only to an entity with the most efficient plan for producing that power.
“It helps us to have a more systematic way of planning for our power so that when you have a licence you are sure that the power will be generated in a place where there are gas and transmission facilities, or where the power plant and the required facilities are being built at the same time,” he added.
NERC is scheduled to conduct consultations with industry stakeholders over the next two to three weeks.
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