Government has rolled out waivers for Independent Power Producers (IPPs) of renewable energy at a time that it has suspended the issuing of licenses to IPPs in the thermal space over concerns of excess power generation.
This also follows government’s plan to increase the country’s renewable energy capacity to ten percent by 2020.
Deputy Energy Minister, Dr. Mohammed Amin Adam who confirmed this further explained to Citi Business News that the move should reduce the country’s huge debt burden from importation of crude to power thermal plants.
“We believe that when we are able to do this, we will also reduce the government’s expenditure on power,” he stated.
The Energy Ministry is almost through with the framework on renewable energy use.
Meanwhile Dr. Amin has stressed that renewable energy producers would also be subject to competitive bidding processes like counterparts in thermal generation.
“Just as we have agreed to apply competitive bidding to thermal IPPs in future, we want to also apply competitive bidding to renewable independent power providers,” he asserted.
The Deputy Energy Minister continued, “We currently have people quoting 25 cents per kilowatts hour which is higher than thermal but other countries even quote lower prices so we know we could agree at prices far lower than the thermal power.”
At present, renewable energy accounts for only one percent of all installed capacity despite the enormous potential existing in the country.
The high initial cost has also been blamed for the low patronage of renewable energy sources.
The Energy Commission has since embarked on a National Rooftop Solar Project to assist households that are opting for solar in meeting their power needs. It is also against the backdrop that the cost per kilowatt hour for solar (11 cents) is cheaper than the cost of thermal per kilowatts hour.
Commenting on the move, Dr. Amin was confident it will be replicated and ultimately reduce government expenditure.
“Apart from the utility-scale renewable, we also have the solar top systems and we want to encourage that as well particularly for all government institutions.”
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