The Renewable Energy Association of Nigeria (REAN) has said that the 2023 Electricity Act will help to unlock more clean energy investments in Nigeria if fully implemented.
Speaking during a recent webinar held by REAN, the association president, Dr. Segun Adaju said that the Act empowers Nigeria’s renewable energy sector in several ways:
Private-public sector partnerships
Dr. Adaju said that the 2023 Electricity Act promotes private-public sector partnerships and allows the private sector to participate fully in the renewable energy space.
He pointed out that the Act gives the private sector the opportunity to catalyze investments.
According to him, public funds are mostly caught up on a stringent budget, leaving the private sector to jumpstart sectors, in this case, the Nigerian renewable energy sector.
Feed-in tariffs
Dr. Adaju stated that a review of climate financing in the last 7 to 10 years shows that the private sector has always been leading in terms of real investments in renewable energy.
He also said that the Electricity Act has created a framework where renewables will be priced appropriately.
He emphasized that under the implementation of the Act, renewables will be priced at cost-reflective considerations, this is because of the cost-reflective feed-in tariff that will be put in place.
He also said that net mering will encourage users to install solar panels and users can sell off excess electricity to either their state, licensees or the Nigerian Bulk Electricity Trading (NBET).
According to him, the Nigerian Electricity Regulatory Commission (NERC) is trying to finalize the net mering framework, where users can sell excess electricity to the grid.
He noted also that the creation of feed-in tariff rates is different from the regular grid prices because they are cost-reflective and encourage more investments in electricity.
States’ electricity independence
He said that under the implementation of the 2023 Electricity Act, states can now have their own electricity structure as it relates to regulation, and the market, which is a great incentive for investments.
He highlighted Lagos, Edo, and Kaduna as being ready to structure their electricity markets, thereby making it easy for investors to put their money into such states.
Capacity building
He stressed the importance of capacity building in the renewable energy sector. According to him, the Electricity Act has created room for local capacity building, which will benefit the sector.
He said that the Act helps operators to imbibe local content and train better-equipped engineers and operators in the renewable energy sector space, to limit the import of capable engineers and others.
Carbon trading
He said the Electricity Act will unlock investments in renewable energy through carbon trading.
This is because the carbon trading market has become interesting as many parties are beginning to promote carbon trading in Africa.
Recall that in November 2022, the Africa Carbon Markets Initiative (ACMI) was established, seeking to unlock the potential of voluntary carbon markets for financing Africa’s energy, climate, and development goals.