• Sunday, May 26, 2024
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Time to activate green energy and the Electricity Act 2023 following the electricity tariff hike

Why Transcorp sells electricity outside Nigeria

Nigerian entrepreneurs, investors, and citizen’s groups must now activate the battle cry of ‘necessity is the mother of invention” and pivot to alternative energy sources quickly following the massive hike in electricity tariffs. The Electricity Act 2023 should act as an additional spur and enabler for the strategic move. The market demands such a critical move.

Green energy has become an imperative for Nigeria and an entrepreneurial opportunity. The recent hike in electricity tariffs would negatively impact the ease of doing business, especially for small and medium enterprises (SMEs), which are vital to the country’s economy. This tariff increase imposes additional financial burdens on businesses, hindering their ability to invest in innovation, expansion, and competitiveness in domestic and international markets.

Investors should examine the provisions of the Electricity Act of 2023 more closely. President Bola Tinubu signed it into law in June 2023. The Electricity Act advocates a transition to green energy, which is essential for addressing Nigeria’s power challenges; it is now imperative to implement it.

Q: “The Electricity Act advocates a transition to green energy, which is essential for addressing Nigeria’s power challenges; it is now imperative to implement it.”

The Electricity Act empowers Nigeria’s subnationals to invest in the electricity value chain, from generation through distribution. Based on this, the Enugu State Government initially designed a policy and registered a firm. Governor Peter Mbah has promised that Enugu State will run its power independently starting in December 2026.

The Electricity Act promotes using renewable energy sources like wind, solar, and hydropower to reduce greenhouse gas emissions, enhance energy security, and support economic development. Experts say Nigeria can mitigate the adverse effects of tariff hikes, provide stable electricity, and position itself as a leader in renewable energy by implementing the Electricity Act.

Therefore, it is time for Nigeria to activate the Electricity Act of 2023.

Enugu State could lead the move in December 2026. It may need to be fast-tracked. It was announced only in March 2024. At a town hall briefing in March, Governor Peter Mbah said that electricity is a primary infrastructural requirement for industrial development and that it is why the state is pursuing it.

Mbah affirmed, “We will set up the Enugu State Electricity Regulatory Commission as we tackle all legal and regulatory issues in actualizing the objective. Working with the private sector, we shall generate and distribute electricity in Enugu by the end of 2026.”.

The governor said the state government would build transmitter lines to handle power distribution in the state.

Enugu State is in good standing regarding power sources. Experts at the University of Nigeria have pointed in the past to the potential of the coal mines in Enugu as a power source.

Nearby, the Itobe Coal Power Project is a 2,400 MW coal-fired power project planned for Kogi, Nigeria. According to GlobalData, which tracks and profiles over 170,000 power plants worldwide, the project is currently at the permitting stage. It will be developed in multiple phases. After the completion of construction, the project is expected to be commissioned in 2026.

Where is the geometric power in Aba? Following a colourful commissioning and media outing, it is time for Geometric Power in Aba to fulfil its promise of steady power to consumers in nine local governments ring-fenced for that purpose in Abia State.

The 2023 Act encourages embedded generation, hybridised generation, co-generation, and electricity generation from renewable energy sources such as solar, wind, tidal, hydro, hydrogen, and biomass.

A reckoning in 2023 showed many power projects in Nigeria’s pipeline. They include large-scale grid-connected projects and renewable energy projects.

The Mambilla Hydropower Project is a massive 3,050 MW project located in Taraba State, but it is only in the permitting stage. It has the potential to be a game-changer if completed. The Egbin Phase 11 Project is an expansion project for Nigeria’s largest power plant at Egbin in Ikorodu, Lagos State. The planned 1,900 MW addition would utilise natural gas and potentially some renewable energy sources. It’s currently in the planning stage and aims to be commercially operational in 2024.

The Nigeria-Chad Interconnection Project also aims to connect Nigeria’s national grid with Chad’s, enabling power exchange between the two countries.

Renewable energy projects are in the mix. They include the Kebbi State Solar Power Plant, offering 5600 MW. However, it is still in the early stages, with land allocated and foreign investment secured. There are five solar plants among several smaller plants planned across Nigeria, with a total capacity of 961 MW. They can help diversify the energy mix and bring power to underserved areas.

While citizens seek quick alternatives, there are no easy fixes. It is for entrepreneurs to see and seize the opportunity that the extremely high tariff presents to find solutions to Nigeria’s power challenges.