- Signs Power Purchase Agreements for 14 solar projects
By Bennett Oghifo
The Federal Government’s commitment to the achievement of incremental power supply has received a boost as the Nigerian Bulk Electricity Trading Plc., (NBET)on Thursday signed Solar Power Purchase Agreements with 14 Solar Power Project developers and investors.
In his remarks at the signing ceremony, in Abuja, the Minister of Power, Works and Housing, Babatunde Fashola, stressed the need for public enlightenment on the economics of power supply.
Solar companies initialled at the ceremony included PAN Africa Solar Limited (PAS) which plans to build a 75MW Solar Power Plant; Nigerian Solar Capital Partners 100MW Solar Power Plant; Nova Solar 5 Farm Power Limited which plans to build a 100MW Solar Power Plant; LR Aaron Power Limited which plans to build a 100MW Solar Power Plant; and Motir Dusable Power Investment Limited which plans to build a 100MW Solar Power Plant.
Also initialled were Afrinergia Power Limited which plans to build a 50MW Solar Power Plant; Middle Band Solar One Limited which plans to build a 100MW Solar Power Plant; Nova Scotia Development Power Limited which plans to build an 80MW Solar Power Plant; CT Cosmos, 75MW Solar Power Plant; KVk Power (Pvt) Nigeria Limited 100MW Solar Power Plant; and Anjeed Kafanchan Solar Limited 100MW Solar Power Plant.
Others are Quaint Solar, which plans to build 50MW Solar Power Plant; Oriental Renewable Solutions Limited (“ORSL”) and EN Consulting and Projects Limited (“ENCPL”). The two companies have 50MW solar project each while all the companies have accepted the terms of the agreement.
According to Fashola, “Power Purchase Agreements are the heart and souls of financing Power Projects. They do not automatically on their own mean that you will have electricity tomorrow; but they indicate that in the next few months, 6, 9, 12, 14, 18 months, depending on the speed of each promoter and developer, you will begin to see incremental delivery of electricity into the Grid and into your communities and I think this is important to manage expectations.
“And I also think our partners must understand this as well; and that on their office and home pages, on their sites, they must contribute to educate the public about what they should reasonably and rationally expect so that when delivery is made it is against a measured expectation,” he said.
Recalling that such perception was allowed to linger that immediately the privatisation process was completed, everything was solved, Fashola explained that it was just a first step in the process, pointing out that although the sun is free the processes required to harness the energy and convert it to electric current are not free.
He added, “Photovoltaic cells are not made in Nigeria yet. If we are lucky, the panels, some of the aluminum fittings are being put together here. But we don’t manufacture the cells, they have to be imported, they are subject to exchange rate vagaries and so on and so forth.”
The Minister described the Power Purchase Agreement as “a document that clearly shows that the consumer is being put first”, in that it determines how much of the energy ultimately gets to the consumer, adding, “And this is the good job that government, through its agency –NBET- has done.”
According to the Minister, who recalled that on assumption of office what he met was a tariff of about 17 cents, which at N200.00 to a dollar translated to a N34.00 per unit of solar energy that would be transferred to consumers, added, “We didn’t feel comfortable to pass this onto consumers.
“Today, as we come to 11.5 cents at N200.00 to a dollar, I think we are probably at about N23.00 which is in the region of even the disputed tariff”, he said, adding, “But we feel this is a good place to begin. We expect that these pioneers have opened the door for other players to come in. And as it is in other jurisdictions, we expect that the prices will further drop down as the technology gets better and cheaper,” he said.
Thanking the pioneer investors, most of whom were youths, for their commitment and confidence in the nation’s Power Sector, Fashola, who praised their obvious energy and enterprise, declared, “This is understandable because solar is emerging and evolving technology and no generation of people has shown a greater commitment to it than young people; and I am sure with their energy, with their enterprise and with their fearlessness, we will deliver this commitment.”
The Minister, however, urged them, “I want to say very quickly that as we go towards the process of building, please remember when you start to build, never to compromise the quality of construction. Focus on the aesthetics and the durability. It is the minimum that Nigerians must expect.”
Fashola recalled the recent judgment that set aside the electricity tariff earlier introduced by the Nigerian Electricity Regulatory Commission (NERC), saying there was need for Nigerians to see electricity as a product that has to be produced from raw materials that have to be bought, a product that has to be transported and the transporter has to be paid and the transport cost indexed into the cost of the final product just as it is done with other products.
Earlier, in his welcome remarks, the acting Managing Director/Chief Executive Officer of NBET, Mr. Waziri Bintube, had said the 14 PPAs that NBET initialed would potentially add 1125MegaWatts to the National Grid adding that the PPAs, after initialing, were sent to the regulatory agencies for approval.
The NBET boss expressed the hope that now that the necessary approvals have been obtained and leading to formally signing of the PPAs, the developers would “quickly push their projects to financial close and commence construction in a few months’ time.”