Newsletter, Energy & Natural Resources

The Mini-grid Regulations 2023: Addressing Stakeholders’ Concerns

Towards achieving vision 30:30:30 through the increased penetration of mini-grids in Nigeria, the Nigerian Electricity Regulatory Commission (NERC or the “Commission”) published a consultation paper in August 2022 calling for recommendations on its proposed amendment of the 2016 Mini-Grid Regulations (the “2016 Regulations”).

Amongst the various proposals put forward by stakeholders in response to this call was a comprehensive position paper jointly developed by the Renewable Energy Performance Platform (REPP), the Renewable Energy Association of Nigeria (REAN), and the Africa Mini-grid Developers Association (AMDA), titled ‘Future-proofing the expanding market: Recommendations for improving the bankability of the mini-grid regulatory framework in Nigeria’. Informed by their collective experiences as Developers, Financiers, and Operators within the Sector, the position paper proffered solutions aimed at stimulating investments and development within the Sector.

On the 29th of December 2023, the revised Mini-Grid Regulations (the “2023 Regulations”) was finally released, incorporating NERC’s proposed amendments as well as some recommendations made by stakeholders.

 

Addressing Stakeholder Concerns

The subsequent paragraphs provide a concise overview of challenges encountered by stakeholders under the 2016 Regulations, recommendations put forth, and the current position of the law under the 2023 Regulations.

  1. Conditions for the grant of Permits to isolated mini-grids larger than 100KW of distributed power and up to 1MW of generation capacity.
  2. Requirement of confirmation from Distribution Companies (DisCos):

Under the 2016 Regulations, as a prerequisite for granting a Mini-Grid Permit, a Developer of mini-grids within the above capacity range was required to provide NERC with confirmation that the proposed mini-grid project would not impede the expansion plans of a DisCo.

A key challenge encountered by Developers in this regard was the fact that DisCos’ expansion plans were not publicly available making it difficult to confirm non-interference. Furthermore, it was observed that

[1] Nigeria aims to attain a 30% share of renewables in its energy mix by the year 2030.

[2] Consultation+Paper+on+Proposed+Review+of+Regulations+for+Mini-Grids+2016 (Last accessed January 25th, 2024).

[3] https://repp.energy/wp-content/uploads/2022/12/221220-NG-mini-grid-policy-paper.pdf (Last accessed January 25th, 2024).

[4] Reg 7(1)(b) Mini-grid Regulations 2016…

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