President Bola Tinubu has approved the new Electricity Act,
which replaces the 2005 Electricity and Power Sector Reform Act.
The Electricity Act was first passed in July 2022 in the
administration of former President Muhammadu Buhari.
The new bill seeks to promote private sector investments in
the Nigerian power sector and de-monopolise the nation’s electricity
generation, transmission and distribution at the national level.
Below are 10 benefits of the assented 2023 Electricity Act
1. The passage means that anyone may construct, own, or
operate an undertaking for generating electricity not exceeding one megawatt in
aggregate at a site, or an undertaking for distribution of electricity with a
capacity not exceeding 100 kilowatts in aggregate at a site, or such other
capacity as the Commission may determine from time to time, without a licence.
2. Electricity generation licensees are obligated to meet
renewable generation obligations as may be prescribed by the Nigerian
Electricity Regulatory Commission.
3. Electricity generating companies will be mandated to
either generate power from renewable energy sources, purchase power generated
from renewable energy or procure any instrument representing renewable energy
generation.
4. Lawmakers are granted the power to carry out oversight
responsibilities and function over the NESI through its respective Committees
on Power in the Senate and House of Representatives.
5. Empowerment of states, companies, and individuals to
generate, transmit and distribute electricity.
6. States can regulate their electricity markets by issuing
licences to private investors who can operate mini-grids and power plants
within the state. However, the Act precludes interstate and transnational
electricity distribution.
7. The Nigerian Electricity Regulatory Commission will be
able to regulate the electricity sector within Nigeria.
8. The commission can transition regulatory responsibilities
from itself to state regulators when they are established.
9. Until a state has passed its electricity market laws, NERC
will continue to regulate electricity businesses in such states.
10. For now, only three states -Lagos, Edo and Kaduna—have
electricity market laws and can start regulating their markets. But for other
states without such laws, NERC will regulate their electricity generation and
transmission.
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