Dafe Akpeneye, the Commissioner overseeing Legal, Licensing, and Compliance at the Nigerian Electricity Regulatory Commission (NERC), addressed the anticipated impacts of the 2023 Electricity Act on Nigerians in the 14th edition of the PricewaterhouseCoopers Limited (PwC) Annual Power and Utilities Roundtable report,
In the report, he emphasized the critical role of investment in transforming Nigeria’s power sector. He stressed that the primary obstacle to progress lies in insufficient investment rather than flawed legislation. Akpeneye highlighted a common misunderstanding among Nigerians regarding the magnitude of investment required in the sector.
He clarified that bringing one megawatt of generation capacity demands between $500,000 and $1.5 million. Additionally, constructing a 330 kV transmission line costs around $1 million, while a kilometre of 132 kV line costs approximately $400,000.
These figures underscore the necessity for a stable investment environment to attract much-needed capital. Critiquing past reforms, Akpeneye noted their limitations, particularly the inadequacy of the privatization policy in effectively regulating the market.
He asserted that the 2023 Electricity Act addresses these shortcomings by consolidating existing laws, empowering the regulator, enforcing integrated resource planning, and promoting governance standards. The Act also restores states’ authority in the power sector to pre-1999 levels, albeit with potential conflicts between state autonomy and federal oversight.
Akpeneye stressed the importance of avoiding fragmentation in power legislation, citing the risk of confusion and inefficiency posed by having 38 separate power laws in Nigeria. Such fragmentation complicates coordination, especially given the jurisdictional constraints of existing electricity networks.
Despite these challenges, Akpeneye expressed optimism about Nigeria’s current position compared to when power sector reforms began a decade ago. He emphasized the need for continued coordination and adherence to the mandates outlined in the Electricity Act 2023 to sustain progress.
During the Roundtable, Akpeneye also stated: “Funding is the key to unlocking the power sector. There
were significant financial limitations that hindered previous collaborations from yielding the right results. We need to work together to agree on how we attract this financing. The investments can also come from our local economy.”
Akpeneye suggested that states should not aim to play in the on-grid space due to significant financial requirements to unlock funding. Instead, they should identify their unique advantage, rural access, off-grid solutions, or specific areas within the grid.
He also addressed the investment gaps in the electricity sector by stating that to attract long-term investment to the electricity sector, we need to continue fostering a stable and market-driven environment. This includes both renewable energy integration and utilisation of gas for base load
generation.
He said that implementing the country’s Integrated Resource Plan (IRP) can achieve that balance, and stakeholders can build a sustainable, reliable power sector for the future.