The Nigerian Power Sector has long been plagued by challenges such as inadequate generation capacity, poor distribution infrastructure, and inefficient regulations.
The new Act which was signed in few weeks ago aims to address these critical issues in the power sector and pave way for transformative changes as the country continues to strive for reliable and sustainable power supply.
President Bola Ahmed Tinubu has officially signed the 2023 Electricity Act into law, marking a significant milestone in Nigeria’s electricity sector.
While the immediate impact on the average Nigerian in terms of increased electricity access may be limited, the new law focuses on enhancing the regulation and management of the electricity value chain. One of its key provisions includes the removal of obstacles that hinder the efficient operation of state electricity market systems.
This move is expected to pave the way for improved governance and better overall performance in Nigeria’s electricity industry.
The Nigerian Electricity Regulatory Commission (NERC) has been empowered to address post-privatization issues more effectively than before. However, the positive impact of this law will only be felt when all the states in the federation establish their own electricity laws.
Below are 10 benefits of the assented 2023 Electricity Act
Electricity Act 2023
1. The passage means that anyone may construct, own, or operate an undertaking for generating electricity not exceeding one megawatt in aggregate at a site, or an undertaking for distribution of electricity with a capacity not exceeding 100 kilowatts in aggregate at a site, or such other capacity as the Commission may determine from time to time, without a licence.
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2. Electricity generation licensees are obligated to meet renewable generation obligations as may be prescribed by the Nigerian Electricity Regulatory Commission.
3. Electricity generating companies will be mandated to either generate power from renewable energy sources, purchase power generated from renewable energy or procure any instrument representing renewable energy generation.
4. Lawmakers are granted the power to carry out oversight responsibilities and function over the NESI through its respective Committees on Power in the Senate and House of Representatives.
5. Empowerment of states, companies, and individuals to generate, transmit and distribute electricity.
6. States can regulate their electricity markets by issuing licences to private investors who can operate mini-grids and power plants within the state. However, the Act precludes interstate and transnational electricity distribution.
7. The Nigerian Electricity Regulatory Commission will be able to regulate the electricity sector within Nigeria.
8. The commission can transition regulatory responsibilities from itself to state regulators when they are established.
9. Until a state has passed its electricity market laws, NERC will continue to regulate electricity businesses in such states.
10. For now, only three states -Lagos, Edo and Kaduna—have electricity market laws and can start regulating their markets. But for other states without such laws, NERC will regulate their electricity generation and transmission.
Click on the link below to Download 2023 Electricity Act
