Supporting mini-grid operators to break up the monopoly of the 11 electricity distribution companies (Discos) is one of the most efficient ways in improving the reliability of electricity supply, achieving financial and fiscal sustainability, and enhancing accountability in Nigeria’s power sector, according to stakeholders.
In Nigeria, about 47percent of its citizens do not have access to grid electricity and those who do have access, face regular power cuts.
For most stakeholders, there is a need to change Nigeria’s power model by having a decentralised system which will reduce the monopoly of the Discos and also create alternatives for its citizens.
“There is no law that monopolised the distribution of power, which is why Nigeria needs to find ways decentralise the model by creating more alternative through mini- grids,” Eyo Ekpo Executive Director at New Frontiers Development limited said at this year’s Pwc’s 11th annual power roundtable virtual event.
According to Expo, without innovations and technology, most Discos will struggle to survive and break-even due to recent developments.
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“Gradually we are seeing changes, most residential estates are beginning to get more creative in providing stable power either through off-grid or On-grid,” Expo noted.
These mini grids typically use smart, remotely controlled electricity meters that allow customers to prepay for their electricity in pay-as-you-go (PAYG) model. They use remote monitoring systems to manage the status of the system in real-time from a distance.
The detailed World Bank’s Energy Sector Management Assistance Program (ESMAP) showed a survey of mini-grids in Africa and Asia showed capital cost has decreased down from more than $8,000 per kilowatt of firm power output (kwfirm) in 2010 to $3,900/ kw firm in 2019.
Alex Okoh, the DirectorGeneral of the Bureau of Public Enterprises (BPE) said the aim of Nigeria’s Power sector reform which is the biggest privatisation in Africa was not to replace government monopoly with private monopoly but creating an enabling environment that will encourage service delivery.
“I would propose an idea where those who want to operate below the franchise framework can come under an umbrella and be regulated under NERC,” Okoh said.
He noted that although most Discos focus on locations where revenue are more guaranteed, however, “there is need to be some level of reorientation for Disco in terms of service delivery.”
“We can have more regulated franchises beginning to challenge the Discos in terms of service delivery because Monopoly tends to make people more complacent,” Okoh said at the event.
The keynote Speaker at the event, Bart Naiji, the Chairman & CEO of Geometric Power said the entire value chain of Nigeria’s power sector needs to be incentivised which will allow a trusty worthy agreement between consumer and distribution company.
