In 2022, the Nigerian Electricity Regulatory Commission (NERC) granted licenses to 17 independent electricity distribution network operators in several states, however, only 11 are currently active.
This is according to the 2022 Market Competition Report, put together by NERC and released last week.
According to the NERC report, the Commission has granted licenses to a total of seventeen (17) independent electricity distribution network (IEDN) operators, with eleven (11) of them currently in operation.
As outlined in the NERC report, these independent operators are actively engaged in the distribution of power sourced from their respective embedded generation plants.
Below are the details of the licensed operators, along with their respective license numbers and operational status:
NERC/LC/056 – Gateway Electricity Limited, Lagos – Active
NERC/LC/074 – Energy Company of Nigeria Plc, Lagos – Active
NERC/LC/145 – PIPP LVI Disco Limited, Lagos – Active
NERC/LC/146 – Bodituv Nigeria Limited, Abuja – Active
NERC/LC/156 – Uraga Power Distribution Company Limited, Lagos – Active
NERC/LC/174 – Ariaria Independent Energy Distribution Network Ltd, Lagos – Active
NERC/LC/179 – Ladol Integrated Logistics Free Zone Enterprise, Lagos – Active
NERC/LC/192 – Babcock Consulting Limited, Ogun – Active
NERC/LC/200 – Constant Independent Electric Power Distribution Company Ltd, Ogun – Active
NERC/LC/203 – Alausa Distribution Limited, Lagos – Active
NERC/LC/216 – Notore Industrial City Limited, Rivers – Active
More Insights
As of December 2022, the NERC report highlighted a total of twenty-eight (28) operational power plants connected to the grid, encompassing a mix of private and government-owned entities.
It’s important to note that this count excludes numerous embedded generators, authorized by the Commission, actively contributing to the Nigerian Electricity Supply Industry (NESI).
In the realm of transmission capacity during the same period, the NERC report underscored the critical role played by this sector in national security and acknowledged its substantial funding requirements.
The ownership and operation of transmission services continue to be overseen by the government through the Transmission Company of Nigeria (TCN) Plc.
Nonetheless, private investors have opportunities to collaborate with TCN and invest in transmission assets in accordance with the Commission’s regulatory framework. NERC emphasized specific criteria for assessing competitiveness within NESI and determining the viability of a transition toward a more competitive market.
These include evaluating the extent of privatization, ensuring a sufficient number of potential competitive entities to mitigate monopolistic risks, and confirming the presence of essential prerequisites like adequate metering and robust information technology infrastructure necessary for the smooth operation of a competitive electricity market.
Consequently, the Nigerian Electricity Supply Industry (NESI) has witnessed significant growth in competitive entities due to expansive regulatory changes promoting private sector involvement. Key aspects to highlight are:
- Energy and capacity contracts can now be established through a variety of means such as vesting, bilateral agreements, and cross-border arrangements. Eligible customers have the option to directly procure electricity from Generation Companies (GenCos) and trading licensees, enhancing competition.
- Notably, the installed and generation capacities of power plants connected to the grid have consistently increased since the privatization of GenCos in 2015.
- By December 2022, the operational count reached 28 power plants, indicating a heightened level of competition owing to diverse generation opportunities. Additionally, regulations allowing bilateral contracts between Distribution Companies (DisCos) and major consumers, along with the potential exit of the Nigerian Bulk Electricity Trading Plc (NBET) from the market, have further intensified competition within this segment of the value chain.
