Nigeria Approves Renewable Energy Regulations

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A new regulation in relation to renewable energy in Nigeria has recently been approved by the Nigerian Electricity Regulatory Commission (NERC) in accordance with the Electric Power Sector Reform Act, 2005 (Act no 6 of 2005). The regime is expected to transform the Nigerian renewable energy sector, with reports of a country-wide target of up to 2,000 megawatts of generated capacity by 2020.

Renewable energy is gaining momentum in the Nigerian market and has been a key focus of recent changes to the Energy Commission’s “National Energy Master Plan.” The regulation focusses on wind, hydro, biomass and solar PV projects of 1-30 megawatts and that will be connected to the transmission grid or distribution networks. It is expected that the electricity distribution companies (DisCos) will take up around 50% of the total electricity generated, with the Nigerian Bulk Electricity Trading Plc (NBET) as offtaker for the remaining 50%.

A draft power purchase agreement for renewable energy projects has been formally published by NBET to the industry and remains under discussion.

Eversheds will be monitoring the NERC’s plans for competitive bidding and other processes which we understand are to apply to renewable projects in excess of 30 megawatts.

Eversheds is currently advising clients on potential renewables projects in Nigeria and recognises the exciting opportunities this new development will bring.

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