- NERC recommends creating Independent Systems Operators to enhance industry transparency and drive market sustainability.
- The government has privatised 11 DisCos and 11 GenCos in the period under review.
The Nigeria Electricity Regulatory Commission (NERC) said it had licensed 17 Independent Electricity Distribution Networks (IEDN) operators as of December 2022, of which 11 are already operational. NERC made this known in the “2022 Market Competition Report” released on Tuesday. In the report, the commission submitted a breakdown of the competitiveness of the Nigerian Electricity Supply Industry (NESI). According to the report, the federal government has privatised all the 11 successor distribution companies (DisCos) and 11 generation companies.
“Additional private distribution company has been licensed in a specified franchised area. Eight National Integrated Power Projects (NIPP) managed by the Niger Delta Power Holding Companies Limited (NDPHC) are in the process of being privatised. There are nine operational Independent Private Plants (IPP) connected to the grid. Also, several off-grid and embedded generators have been licensed and currently operate in NESI. The number of grid-connected DisCos operating in the country has increased to 12.”
The report further revealed that NESI’s metering and information technology infrastructure have substantially improved with IoT metering, and projects are ongoing at wholesale and retail markets. “Seven (7) DisCos have, as of December 2022, metered between 80–100% of their MD customers. More than 2,588,617 additional non-MD meters have been installed post-privatisation, while most registered MD customers have been fully metered. Ikeja, Eko, Abuja and Benin DisCos had metered more than 50% of their registered customers as of the end of 2022.”
In its recommendations, NERC urged the Minister of Power, Adebayo Adelabu, to create an Independent System Operator (ISO) in line with Section 24(2&3). According to the regulator, it would provide necessary regulatory actions for the operational take-off of the entity.
“The unbundling of the SO/MO from TCN and the establishment of an independent ISO is overdue at the current stage of the market and pertinent to enhance industry transparency and further drive the market to sustainability. There is an urgent need for a clear policy on payment for energy consumption by the host communities – communities hosting power infrastructure (especially generation plants) – which has contributed substantially to liquidity challenges facing the industry,” the commission added.