CEM REPORT, ELECTRICITY| Nigerians have long grappled with inconsistent electricity supply, a situation often exacerbated by power outages during peak demand periods. However, a recent move by the Nigerian Electricity Regulatory Commission (NERC) offers a glimmer of hope. The regulatory body has mandated a significant shift in power distribution, prioritizing domestic electricity needs over international sales.
In a new directive issued the NERC expressed concerns about the current approach to grid management. Previously, electricity generation companies (Gencos) sometimes prioritized international customers over local distribution companies (Discos) during periods of grid instability. This practice, according to NERC Chairman Dr. James Momoh, was “both inefficient and inequitable.”
Dr. Momoh further stated, “The reliance on limiting Discos’ load off-take while prioritizing international off-takers and Eligible Customers has proven neither efficient nor equitable.” This highlights the NERC’s recognition that the previous system disadvantaged Nigerians by limiting the amount of power available to Discos, impacting their ability to meet customer demand.
NERC Prioritizes Domestic Needs
The new directive outlines several key changes designed to prioritize domestic power needs. Here’s a breakdown of the key points:
International Sales Capped at 6%: The most significant change is the cap placed on international electricity sales. Gencos can now allocate a maximum of 6% of the total available grid generation per hour to international customers. This ensures a larger share of generated power is directed towards domestic consumption.
Genco Allocation Limited to 10%: Furthermore, the total capacity allocated by Gencos to international customers cannot exceed 10% of their generation capacity in a six-month period. This prevents Gencos from overcommitting to international contracts, potentially jeopardizing domestic supply during critical times.
Enhanced Transparency and Accountability: The new order emphasizes transparency and accountability. System operators and the Transmission Company of Nigeria (TCN) are mandated to install IoT meters at strategic locations. These meters will provide real-time data on electricity supply to various entities, including Discos, international customers, and eligible customers.
Publishing Hourly Readings: The system operator is also required to publish hourly readings on adherence to grid instructions. This data will be accessible to market participants, facilitating the identification of potential violations and ensuring compliance with offtake contracts.
The recent hike in electricity tariffs, particularly for Band A customers (high-income earners and businesses), further underscores the need for a stable and reliable power supply. Nigerians are now paying more for electricity, and the government is taking steps to ensure they receive the contracted hours of service.
Nigerians Can Expect More Stable Power Supply
The NERC’s new order signifies a shift in focus towards domestic power stability. By limiting international electricity sales and prioritizing local distribution, the government aims to ensure a more consistent power supply for Nigerian homes and businesses. This is particularly crucial considering the recent hike in electricity tariffs for Band A customers. With higher tariffs comes the expectation of improved service delivery, and this move by the NERC is a step in that direction.
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However, it’s important to acknowledge that this is just one piece of the puzzle. Nigeria’s power sector continues to face numerous challenges, including infrastructure deficiencies and limited generation capacity. The government’s commitment to long-term investment in infrastructure upgrades and diversification of energy sources will be essential for achieving long-term power stability.
If You Ask Me
The NERC’s new directive offers a ray of hope for Nigerians struggling with inconsistent power supply. By prioritizing domestic needs and promoting transparency in power distribution, this move signals a commitment to improving the lives of everyday Nigerians. However, sustained efforts are needed to address the root causes of power sector issues. Only through a multi-pronged approach can Nigerians truly expect a future with reliable and stable electricity.
