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Electricity: Energy experts caution against “multiple regulators” in power sector

What investors should know about the Electricity Act 2023

Energy experts in Abuja, on Monday, cautioned against engaging “ multiple regulators” in the electricity industry.

Nigeria is currently pursuing universal access to energy by 2030, being one of the main objectives of the global energy sector. This has, however, raised questions and motivated actions to transition from fossil fuel to renewable energy.
To achieve this, Nigeria is working on amending its Electricity Power Sector Reform Act (EPSRA) 2005, to develop a more competitive electricity market.

In July 2022, the Senate passed the Electricity Bill 2022, which seeks to fend off the Electricity and Power Sector Reform Act 2005 and enact the Electricity Act, 2022.

The Bill’s primary objective is to establish an overarching legal and institutional framework to guide the Nigerian Electricity Supply Industry (NESI).

The Act which is still in review, will allow states to participate in the privatization of the energy sector and inclusion of individual investment.

Read also: Electricity, accommodation, defence push VAT to N600bn in Q2

But Energy experts, speaking at the 74th power dialogue, organized by The Electricity Hub, titled: Reaching the Last Mile -Are State Electricity Markets the Future?”, reviewed current realities, concluding that “ multiple regulators will lead to disaster”

The experts, using Lagos as an example noted that multiple “ distribution and transmission, if replicated across the country, will bring about a disaster that might also bring a tough legal battle to fight.”

The dialogue, which held at the Thought Pyramid Art Centre Wuse II, Abuja, Nigeria, had Chigoziri Egeruoh, Chief Engineer African Development Bank (AfDB); Eyo Ekpo, Chief Executive Officer, Excredite Consulting, and Rumundaka Wonondi, CEO, ZKJ Energy, as panellists.

Olajumoke Delano, Head Regulatory and Government, Abuja Electricity Distribution Company, moderated the session.

At the interactive discourse, Eyo Ekpo, while differentiating state electricity and state-owned electricity markets, noted State Electricity bill, passed in July 2022, is about the federal government electricity market and not the state electricity market.

Wonondi while discussing the types of markets and the types of activities to be practised based on the market types, said “generation is a national space for cross boarding, and its impact being national”

He however added that it is impossible to situate a power plant within a state and claim it’s strictly for the state.

Speaking about regulations, he noted that “multiple bodies can’t be in charge of regulating the markets”

Wonondi explained that the state electricity markets in Nigeria are not ready because it requires a good distribution network and energy choices.

Speaking on the role of regulators in state electricity markets, he noted that “when it comes to distribution, the state market is feasible, but when it advances to other activities like generation, it is better to have a national grid”

Egeruoh, on his part, emphasized the need for feasibility, optimization, financing, organization, as well as the management of resources to have a stable market.

He stated that electricity markets will drive investment depending on the states’ participation, time, cost, policy and reliability of the market.
Participants also raised concerns about state markets having independent power-producing entities, the impact of vandalism and energy theft in the state market and how it could be managed.

The panellist recommended various ways the bill has made provisions to tackle energy theft,

Jumoke Delano revealed that there is a proposal for establishing task forces to combat energy theft.