National Renewable Energy And Energy Efficiency Policy .
NATIONALRENEWABLE ENERGYAND ENERGYEFFICIENCY POLICY(NREEEP)APPROVED BY FEC FORTHE ELECTRICITY SECTORMinistry of PowerFederal Republic of Nigeria4/20/2015i
Table of ContentTable of Content.iiForward . ivAcronyms . vExecutive Summary .viiiSignature Page. xPurpose . xi1. Introduction . 11.1Policy Overview.11.2Background .11.3Definitions of Terms .11.4Need for a Policy .21.5Policy Focus.21.6Critical Elements of the Policy .41.7Economic Justification of the Policy .51.8Energy Security and Growth.61.9Power Roadmap and Support for Electricity Market Reforms.71.10 Institutional Support and Coordination.81.11 States, LGA’s and NGOs.81.12 Policy Objectives .92. Renewable Energy Policy. 102.1Hydropower .102.2Biomass.122.3Solar . 132.4Wind. 152.5Geothermal, Wave and Tidal Energy. 172.6Power Supply and Utilization . 17ii
2.7Renewable Energy Financing . 212.8Feed-in Tariffs: Regulation and Incentives . 243. Energy Efficiency Policy . 263.1. Energy Efficiency and Conservation .263.2. Energy Efficiency Financing .283.3. Participation by NGOs.293.4. Research and Development.294. Other Energy Issues . 304.1. Research Development and Training.304.2. Bilateral and Regional Cooperation.315. Planning and Policy Implementation. 335.1. Planning Framework.335.2. Policy Implementation .345.3Targets/Milestones and Timelines .345.4Renewable Energy and Energy Efficiency Incentives.375.5Renewable Energy and Energy Efficiency Action Plans.385.6Monitoring and Evaluation .405.7Special Customs Clearance of RE and EE Equipment .406. Conclusion . 41iii
FOREWORDNigeria is a country with an estimated population of 170 Million people,65% of which are between the ages of 18 to 45 years. Only about 40% ofthe population has access to electricity supply. The national grid is limitedin reach. There is limited extension of the grid to most communities, and itwould take decades to reach most areas in Nigeria. This leaves a majorityof Nigerians who live in most communities without access to electricity.Even the available electricity capacity is insufficient to meet existing powerneeds of the less than 40% who have access to the national grid.Therefore, it has become a matter of necessity for exploitation andestablishment of other energy resources to complement and supplementthe limited power generation and supply available in Nigeria. Fortunately,Nigeria is endowed with abundant natural resources of renewable energy,like the sun, wind, hydros, biomass (waste) etc. As an alternative energy,renewable energy will be a practical alternative to supplementing electricitysupply in Nigeria. It can be cost-effective in areas far-flung from thenational grid, and simply put, will impact Nigeria's electricity bottom line.Despite the abundance of natural resources in Nigeria, there were nonationally acceptable renewable energy or energy efficiency policies todrive the renewable energy sector of the economy. Some Ministries,Departments and Agencies (MDAs) before now, have in one way or theother developed documents that enabled them to pursue ventures inrenewable energy. But furtherance to the federal government's reform actto diversify Nigeria's energy mix and provide practical, affordable andrealistic access to electricity to all Nigerians, an inter-ministerial committeeof stakeholder MDAs was constituted and mandated to come up with anational renewable energy and energy efficiency policy that would attractinvestment into the electricity sector.After several months of stakeholder meetings, workshops, collation ofvarious documents, etc., by the inter-ministerial committee and theeventual development and submission of the National Policy on RenewableEnergy and Energy Efficiency to the Federal Executive Council, we havethe distinguished pleasure of presiding over the first ever National Policy onRenewable Energy and Energy efficiency, developed in line with objectivesof the National Energy Policy, Rural Electrification Strategy and Plan,Millennium Development Goals and the National Economic andDevelopment strategy. The National Policy is established to remove theiv
key barriers that put renewable energy and energy efficiency at economic,regulatory or institutional disadvantages relative to other forms of energy inNigeria. We commend this policy to the Federal Executive Council forconsideration and scrutiny. With the eventual passage of the policy, Nigeriawill be set to provide a conducive political environment that will attractinvestments in the renewable energy and energy efficiency arena. Amonitoring unit will be set up to oversee the immediate implementations ofthe recommendations of the policy in the electricity supply industry, whichwill enhance and leapfrog power projects across the nation.We acknowledge the valuable roles played by various stakeholders: theinter-ministerial committee, civil societies, academia, our aides and all whoworked tirelessly to ensure that Nigeria has a National Policy onRenewable Energy and Energy Efficiency. Most importantly, we would liketo thank Mr. President, Dr. Goodluck Ebele Jonathan, GCFR, and the entireNigerians for the privilege and opportunity to serve our dear country.Long Live Nigeria!!!Prof. Chinedu O. Nebo, CON, FNSEHonourable Minister of PowerFederal Ministry of PowerFederal Republic of NigeriaHon. MohaV akil, OONHone Minister of Stateederal Ministry of PowerFederal Republic of NigeriaTextv
AcronymsNNaira%PercentageAUAfrican UnionCSPConcentrated Solar PowerDFIDDepartment for International DevelopmentDISCOsDistribution CompaniesECNEnergy Commission of NigeriaECNEnergy Commission of NigeriaECOWASEconomic Commission of West AfricaEEEnergy EfficiencyEEEPECOWAS Energy Efficiency PolicyEEPEnergy Efficiency PolicyEISElectricity Inspectorate ServicesEPSRAElectricity Power Sector Reform ActEREPECOWAS Renewable Energy PolicyESCOsEnergy service CompaniesFECFederal Executive CouncilFGNFederal Government of NigeriaGCFRGrand Commander of the Order of the Federal RepublicGDPGross Domestic ProductGDRGeneration Disclosure RequirementGENCOsGeneration Companiesv
GIZDeutsche Gesellschaft für Internationale Zusammenarbeit GmbH (GermanAgency for international Cooperation)GWGiga WattGWhGiga Watt HourIAEAInternational Atomic Energy AgencyICREEEInter-Ministerial Committee on Renewable Energy and Energy EfficiencyIRPIndependent Resource PlanKWhKilo Watt HourLHPLarge HydropowerMMitresm/sMitres/SecondMAEDModel for Analysis of Energy DemandMDAMinistries, Departments, and AgenciesMESSAGEModel for Energy Supply Strategy Alternatives and their GeneralEnvironmental ImpactMWMega WattMWhMega Watt HourMYTOMulti Year Tariff OrderNEEAPNational Energy Efficiency Action PlanNELMCONigerian Electricity Liability Management CompanyNERCNigerian Electricity Regulatory CommissionNESINigeria Electricity Supply IndustryNESREANational Environmental Standard and Regulations Enforcement AgencyNGONon-governmental OrganisationNREAPNational Renewable Energy Action Planvi
OPECOrganisation of Petroleum Exporting CountriesPBFPublic Benefit FundsPHCNPower Holding Company of NigeriaPPTCPower Production Tax CreditPVPhotovoltaicR&DResearch and DevelopmentRERenewable EnergyREFITRenewable Energy Feed-in TariffREPRenewable Energy PolicyRPSRenewable Portfolio StandardRRDRenewable and Rural Power Access DepartmentSHPSmall Hydro PowerSONStandard Organization of NigeriaTCNTransmission Company of NigeriaUNUnited Nationsvii
Executive SummaryEnergy supply in Nigeria can be classified into two main categories, (a) urban and (b) rural.Urban areas are essentially on the grid while rural areas are largely off the grid. Improved energysupply to urban residents is being addressed mainly by the Roadmap for Power Sector Reforms,which was launched by President Goodluck Ebele Jonathan, GCFR, in August 2012. Theroadmap essentially focuses on the development of grid-based electricity. However, the on-goingpower sector reforms will only enable the extension of the national grid to large rural areaswhich are close to main urban areas.Rural areas that are remote and have a low demand density will have to depend on off-gridenergy solutions as the economies of on-grid deployment do not favour rural electrification. Offgrid areas will have to depend on alternative solutions. The implication of this strategy forimproved energy supply across Nigeria will entail the utilization of renewable energy sources atour disposal, both on-grid and off-grid. Consequently, it is essential that a coordinated, coherentand comprehensive renewable energy policy (REP) be put in place to drive hydropower,biomass, solar and wind as energy sources. In this respect, like existing sources of electricity,renewable energy can become a source of energy that may be traded and procured by the powerindustry as they would procure fossil or non-renewable energy sources. It is intended that therenewable energy policy advanced in this document will serve as a blue print for the sustainabledevelopment, supply and utilization of renewable energy resources within the economy for bothon-grid and off-grid energy solutions.This document also advances an energy efficiency policy (EEP). Improvements in the efficiencyof power utilization translate directly into newly available power supply. Energy efficiency is asource of energy since it would reduce inefficient consumption, thereby providing greater accessto electricity consumers. Considering Nigeria’s need to expand its energy supply, it is importantthat an energy efficiency policy (EEP) be put in place to increase power access while moving thepower sector toward greater sustainability. Both renewable energy and energy efficiency can beviewed as part and parcel of a strategy to achieve cleaner and greener energy. Many countriesaround the globe are pursuing this approach to their energy future. It is therefore important thatNigeria joins the league of aspiring green economies.Many of the tools necessary to drive renewable energy development and improve energyefficiency require important rule changes and coordinated action by several ministries,departments and agencies (MDAs), which are yet to be actualized. Therefore, this renewableenergy and energy efficiency policy mandate timely adoption of key regulations and rulechanges required to have a more potent renewable energy and energy efficiency policy. Thepolicy marks the initial steps of aligning the Nigerian renewable energy and energy efficiencypolicy with the ECOWAS renewable energy (EREP) and ECOWAS energy efficiency policies(EEEP). It therefore mandates the implementation of the national renewable energy action plan(NREAP) and a national energy efficiency action plan (NEEAP), at the completion of which arevised renewable energy and energy efficiency policy will update this one. This steeringframework is expected to boost access to energy services and ensure the sustainable growth ofclean energy contribution to Nigeria’s energy mix. It is expected that subsequent versions of thisviii
policy document will further expand the renewable energy window usage in Nigeria, subject tointernational developments and local technology development.ix
Signature PageMembership of the Inter-Ministerial Committee on Renewable Energy andEnergy Efficiency (RE&EE) that Reviewed and Adopted the RE&EE PolicyName of MemberS/No1.Engr. A. Adebisi2Engr. Faruk Y. Yusuf3Mrs. Grace Ogolo4Engr. Z.J. Akinjogbin5Mrs. Ini )bong AbiolaAweEngr. Julius Olurinola68Mallam , mamuddeenTalba .Dr. I.J. Dioha9Mr. Oyedapo Adeoye7OrganizationFederalMinistry ofPowerFederalMinistry ofPowerFederalMinistry ofScience and TechnologyFederalMinistry ofWater ResourcesFederalMinistry ofEnvironmentFederalMinistry ofLands, Housing, andUrban DevelopmentElectricityNigerianRegulatory CommissionEnergy Commission erMemberMemberMemberNigerantol MemberPetroleum Corporation10Engr. John Achukwu11Engr. C.Y. Longtar12Dr. Sunday Wuyep13Mr. Waziri Lasu14Engr. Olisa M. Okoli15Dr. Obi C. Onyia16Engr. T. T. Aliyu17Engr. J.O. Adekunle18Dr. Albert OkoroguStandrOgizo Memberof NigeriaRuralElectrificationAgencyNigeria Power TrainingInstituteNigerianInvestmentPromotion CommissionTransmission Companyof NigeriaMemberMemberMemberMemberNationlB-echgy MemberDevelopment AgencyElectricity Management MemberServices LimitedRaw Material Research Memeber& Development CouncilMinistry of MemberFederalPowerxii
S/No18Name of MemberMr. Oyegbade A. Raji19Engr. Amanze OkereOrganizationof Concession RegulatoryCommissionxiiSignatu
PurposeThe purpose of this policy on renewable energy and energy efficiency is to:i.ii.iii.iv.v.vi.vii.viii.ix.x.xi.xii.Set out a framework for action to address Nigerians challenge of inclusive access tomodern and clean energy resources, improved energy security and climate objectives;Recognise the national significance of renewable electricity generation activities byproviding for the development, operation and maintenance, and upgrading of new andexisting renewable electricity generation activities;Declare that the proportion of Nigeria’s electricity generated from renewable energysources shall increase to a level that meets or exceeds the ECOWAS regional policytargets for renewable electricity generation and energy efficiency for 2020 andbeyond;Declare Energy Efficiency as a large, low cost, and under-utilized Nigerian energyresource offering savings on energy bills, opportunities for more jobs, improvedindustrial competitiveness, and lower air pollution;Recognise that poverty mitigation and environmental protection are hindered by thecontinued predominance and inefficient use of oil and natural gas in meeting ourenergy needs;Take a step in the right direction and broadens the definition of energy security toinclude renewable energy and energy efficiency as equally important indigenoussources of energy, in addition to oil and gas;Incorporate provisions for renewable energy and energy efficiency generationactivities into state policy statements and plans, and recognizes the importance ofenabling framework conditions for private investment in renewable energy andenergy efficiency;Set national targets for achievements in electricity from renewable energy and energyefficiency capacity addition by 2020 and beyond;Require the preparation of national action plan for renewable energy and for energyefficiency and sets a time frame within which implementation is required;Recommend that signatory parties to this policy should collaborate in preparation ofthe action plans and work together in achievement of the final mandatory targets;Make it mandatory for the Ministry of power to facilitate the development of anintegrated resource plan (IRP) and ensure the continuous monitoring and review ofthe implementation and effectiveness of the action plans prescribed under the nationalpolicy statement and;Facilitate the establishment of framework for sustainable financing of renewableenergy and energy efficiency projects and programmes in Nigeria.xi
1.Introduction1.1Policy OverviewThis policy document recognizes the multi-dimensional nature of energy and therefore addressesdiverse issues such as renewable energy supply and utilization; renewable energy pricing andfinancing; legislation, regulation and standards; energy efficiency and conservation; renewableenergy project implementation issues; research and development; capacity building and training;gender and environmental issues; planning and policy implementation. The overall thrust of thispolicy is the optimal utilization of the nation's energy resources for sustainable development.1.2BackgroundThe availability of energy plays a major role in every aspect of our socio-economic life. Energyis, and will always be, a key component of the economic, social and political development ofNigeria. Inadequate supply of energy restricts socio-political development, limits economicgrowth, inclusive growth in particular, and adversely affects the quality of life of citizens, both inurban and rural areas. Improved energy supply results in improved standards of living, whichmanifests in increased food production and storage, increased industrial output, provision ofefficient transportation, adequate shelter, improved healthcare and enhancements in other humanservices.Nigeria is blessed with abundant primary energy resources. These include non-renewable energysources such as natural gas, crude oil, coal and tar sands; and renewable energy sources such ashydro, biomass, solar and wind. However, the economy has mainly depended on theconsumption of oil and gas for commercial energy. The use of hydro-power plants, whichentered the Nigerian energy scene in the 1960’s, now accounts for the second largest energyresource for electricity generation in Nigeria, contributing approximately 26% of the totalinstalled grid- connected generated energy.By its very nature, renewable energy and energy efficiency is multi-sectorial and as such, shouldbe taken into account by all sectors involved. It should be appreciated that the developmentstrategy being proposed will require that financial support be provided to ensure the growth anddevelopment of the sub-sector. This should be regarded as a priority in our strategic thinking. Toensure that the renewable energy and energy efficiency sector develops into a basic and strategicsub-sector, this policy encourage the development of national renewable energy action plan andnational energy efficiency action plan which will facilitate the overall achievement of theobjectives set out in this policy.There will also be a need to develop strong and integrated steering frameworks which will boostaccess to renewable energy services and encourage energy efficiency measures. This frameworkwill also ensure the growth of renewable energy and energy efficiency contribution in Nigeria’senergy mix.1.3Definitions of TermsRenewable Energy refers to energy obtained from energy sources whose utilization does notresult in the depletion of the earth’s resources. Renewable energy also includes energy sources1
and technologies that have minimal environmental impacts, such as less intrusive hydro’s andcertain biomass combustion. These sources of energy normally will include solar energy, wind,biomass, small and medium hydro, geothermal, tide and wave energy.Energy Efficiency is the efforts to reduce the amount of energy required to provide goods andservices or efforts to improve energy conservation. Examples of energy efficiency measuresinclude installing high efficiency lights, natural skylights or other energy efficient devices;insulating a home for optimal cooling or heating and the use of appliances such as water heaters;and the uses of low-energy or efficient refrigerators, freezers, ovens, stoves, water pumps andother appliances. Energy efficient devices use less energy than their older counterparts.1.4Need for a PolicyThe level of productive use of energy in an economy, coupled with the mix and efficiency ofconversion of primary and secondary energy resources to useful energy and the efficient use ofenergy, are directly indicative of the level and rate of development of the economy. It is thereforeessential to put in place a coordinated, coherent and comprehensive renewable energy policylinked to an equally coherent and comprehensive energy efficiency policy.The evidence from the significant body of literature on renewable energy adoption anddeployment suggests that given the intricacies of renewable energy, policy is a game changer.Appropriate policies are therefore needed to create the right incentives, regulation and standardsto advance the adoption of renewables. The renewable energy policy will serve as a blue print forthe sustainable development, supply and utilization of energy resources within the economy, andfor the use of energy resource in international trade and co-operation.The energy efficiency elements will ensure that Nigerians are optimally judicious in their energyutilization and conservation. A strong energy efficiency policy will also mitigate the risk offuture marginalization of the renewable energy percentage contribution to the future power mix,because the contribution may be overshadowed and outpaced by an ever increasing demand formore fossil and renewable energy. Additionally energy efficiency will also increase thelikelihood that national benchmarks of renewable energy contribution to the power mix are metin a cost effective way. The renewable energy and energy efficiency policy create synergiesbetween the efficient uses of electricity in general and renewable energy in particular. Bothrespond together to the energy crisis facing the country today. For instance, energy efficiencymeasures assist in reducing energy consumption, while allowing renewable energies to meet alarger share of demand.1.5Policy FocusBased on the resource situation and the technological base of the country, this policy will focuson hydropower, biomass, solar, wind, geothermal, wave and tidal energy power plants and cogeneration plants for energy production, as well as the improvement of energy efficiency as anadditional source of energy. It is expected that subsequent versions of this policy document will2
expand the renewable energy window usage in Nigeria, subject to international and localtechnology developments.Hitherto, policies in the energy sector had tried to touch on renewable energy and energyefficiency issues. However, they were limited in their scope to only mentioning general issueswithout giving the detailed framework required to make the difference. Furthermore, none ofthese policies have dealt with the specific needs of the electricity sector in the context of the ongoing electricity market reforms in Nigeria and the privatization policy. It has therefore becomenecessary to have an integrated renewable energy and energy efficiency policy that addresses theimportant needs of the Nigerian electricity supply Industry (NESI), backed up by an integratedresource plan (IRP) and national action plans.This policy refers to the ongoing harmonisation process of renewable energy and energyefficiency policies in the ECOWAS region. It will be implemented through a national renewableenergy action plan (NREAP) and a national energy efficiency action plan (NEEAP) which willguide the development of future renewable energy and energy efficiency related sectorialpolicies, as well as the national action plans to achieve renewable energy and energy efficiencytargets. This approach will take input from all stakeholders in a coordinated process to bemanaged by the Federal Ministry of Power. This will avoid policy conflicts and improveefficiency in the allocation of public and private sector funds, for implementation of renewableenergy and energy efficiency programmes by Ministries, Departments and Agencies ofgovernment.An overall national renewable energy and energy efficiency policy is also needed and requestedby foreign investors who wish to invest in the nation's economy based on a national programstrategy instead of a project based approach.3
1.6Critical Elements of the PolicyEvidence from nations that have successfully implemented a renewable energy policy suggeststhe importance of the following regulations and economic instruments:i.ii.iii.iv.v.vi.vii.viii.Mandatory or voluntary Renewable Portfolio Standards (RPS), which define thepercentage of energy generated that must come from renewables by a given targetyear;Generation Disclosure Requirement (GDR),which is applicable when consumershave retail choice and have a preference for renewables;Power Production Tax Credit (PTC) to electricity generation companies, which isaimed at incentivizing the adoption of renewable energy;Feed-in tariffs (FIT), which typically incentivize electricity producers by offeringmore favourable pricing for electricity produced through renewables; andThe adoption of a Public Benefits Fund (PBF), which requires that a certainpercentage of the tariff is dedicated to supporting renewable energy generationprojects on and off the grid.Bidding rounds through national renewable energy independent power producerprocurement programme;Provision of capital grants, tax holidays and exemptions, other incentives forrenewable energy projects;Net metering framework.The above offer Nigeria a wide range of options to drive renewable energy deploymentdepending on the type of energy resource being developed and the project size. Each of thesepolicy options can be implemented by the appropriate Nigeria Government Agency by preparingindependent policy paper that will give direction to the regulatory authorities and other players.Similarly, critical elements of a successful energy efficiency policy include the following:i.ii.iii.Funding mechanism, policy and legislative frameworks, such as:o Incentives for home owners to install energy efficient appliances andlighting;o Incentives for producers and importers to offer energy efficient appliancesand lighting;o Tax credits for home owners who install energy efficiency appliances andlighting.o Tax credits to companies who produce such appliances and fixtures.o Grants to communities to spur the adoption of community-basedrenewable energy and energy efficiency processes.Appropriate institutional arrangements that support energy efficiency andconservation measures.Co-ordination mechanisms and awareness campaign e.g. effective energy efficiencytraining of the population.4
The very nature of the above tools suggests the need for policy directives, rules, regulations andstandards that will provide detailed implementation frameworks, which are required to spur thedeployment of renewable energy and energy efficiency, with the resulting energy marketperformance. The benefits include greater access to electricity, especially amongst rural peoplefor which connecting them to the grid is an expensive proposition.This policy therefore empowers the relevant Ministries, Departments and Agencies of FederalGovernment of Nigerian to adopt and develop any of the above listed policy, regulations andeconomic instruments, w
policy with the ECOWAS renewable energy (EREP) and ECOWAS energy efficiency policies (EEEP). It therefore mandates the implementation of the national renewable energy action plan (NREAP) and a national energy efficiency action plan (NEEAP), at the completion of which a revised renewable energy and energy efficiency policy will update this one.
renewable resources (renewable energy) and sets the FiT rate. The DLs will pay for renewable energy supplied to the electricity grid for a specific duration. By guaranteeing access to the grid and setting a favourable price per unit of renewable energy, the FiT mechanism would ensure that renewable energy becomes a viable and sound long-term
4.0 Renewable Energy Market 4.1 Policy Framework for renewable energy 4.1.1 Policies and Strategies for Renewable Energy Promotion 4.1.2 Main actors 4.1.3 Regulatory Framework 4.1.4 Licensing Procedures for Renewable Energy 4.1.5 Feed-in-Tariff 4.2 Business Opportunities and Potentials of Renewable Energy Sources 4.2.1 Bioenergy 4.2.2 Solar energy
NREL is a national laboratory of the U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, operated by the Alliance for Sustainable Energy, LLC. Renewable Energy Certificate (REC) Tracking Systems: Costs & Verification Issues . Jenny Heeter, Renewable Energy Analyst . National Renewable Energy Laboratory . October 11, 2013
1. FOUNDATIONS OF RENEWABLE ENERGY TARGETS 14 1.1 Overview of renewable energy targets at the global level 14 1.2. Brief history of renewable energy targets 17 1.3. Key aspects and definition of renewable energy targets 22 1.4. Theoretical foundations of targets 28 2. MAIN FUNCTIONS AND BASIS FOR RENEWABLE ENERGY TARGETS 31 2.1.
The EU's renewable energy policy framework 5 - 9 Renewable energy support schemes 10 - 12 Renewable energy within the EU's rural development policy framework 13 - 17 Audit scope and approach 18 - 22 Observations 23 - 82 The EU's renewable energy policy framework could better exploit the opportunities of renewable energy deployment in .
renewable energy sources. The Government has set a very ambitious target of adding 175 GW of renewable energy by 20226. While this is a recent policy announcement, it would be pertinent to highlight the progress of renewable energy sources over the last two decades. The following graph depicts the journey of renewable energy
Renewable Energy Group and Phillips 66 have proposed the Green Apple Renewable Fuels, LLC (Green Apple) joint venture to produce renewable fuels near Ferndale, Washington. The projected nameplate capacity for the Green Apple Renewable Fuels facility is 250 MMGY of renewable fuel products. Green Apple is designed to be a multi-feedstock
THE RENEWABLE ENERGY POLICY FOR UGANDA Government's Policy Vision for Renewable Energy is: To make modern renewable energy a substantial part of the national energy consumption. The Overall Policy Goal is: To increase the use of modern renewable energy, from the current 4% to 61% of the total energy consumption by the year 2017.
