By Ayo Yusuf
Following the recent pledge by Power Minister, Adebayo Adelabu, to raise electricity output to 20,000MW by 2026, the Federal Government has issued licenses to 17 Independent Electricity Distribution Networks operators.
The government which announced this in a 2022 Market Competition Report released on Tuesday by the Nigeria Electricity Regulatory Commission, NERC, however said that 10 of the licensees are currently operational.
The commission revealed this while providing a breakdown of the country’s power distribution segments.
Nigeria’s power sector is basically categorised into the electricity generation, transmission and distribution segments.
In November 2013 when the sector was unbundled into the three segments, 11 successor distribution companies were created and privatised and they have since been serving the country amidst complaints by consumers.
However, in the just released 2022 Market Competition Report, the NERC said, “All the 11 successor Discos (distribution companies) have been privatised.
Ownership and management of the Discos have been transferred to private investors.
“Additional private distribution companies have been licensed in a specified franchised area. 17 Independent Electricity Distribution Networks’ operators have been licensed, of which 10 are operational as at December 2022.
“The regulator explained that the market competition report was prepared in compliance with Section 24(2) of the Electric Power Sector Reform Act 2004, which mandates the commission to prepare an annual report for the minister as to the potential for competition in the Nigerian Electricity Supply Industry.
“This report provides a review of the level of competition in the NESI and assesses the progress for a transition to a more competitive market.
The report further provides recommendations for transition to a more competitive market pursuant to Section 26 of ESPRA.
“The report is directed at a wide spectrum of readers including government officials and institutions, private sector, energy economists, engineers, financial and market analysts, potential investors as well as general readers,” the commission stated.
The serial collapse of the national electricity power grid illustrates the country’s ongoing energy sector crises and raises questions on President Bola Tinubu’s response.
The last grid collapse saw power supply crash from a peak of 3,594.6 megawatts to 42.7MW, leading to a total blackout and impacting socioeconomic activities nationwide.
In the eight years to mid-2015, the national grid collapsed 99 times. The country struggles to transmit 4,000MW despite a claimed wheeling capacity of 7,652MW by the state-owned Transmission Company of Nigeria, and almost 13,000MW total generating power.
Manufacturers say as costs rise, many firms are forced to lay off workers, or close outright.
The World Bank says power outages cost Nigeria $28 billion economic losses annually. The African Development Bank said Nigeria would need to invest about $1 trillion between 2016 and 2030 to close the power gap.
