The power supply crisis in Nigeria has been a longstanding complication in the Nigerian
Electricity Supply Industry (NESI). A number of reforms were necessary because of the
crucial role of power supply in national building and development.
These reforms started with the deregulation of the NESI, which began with the
privatization of the National Electric Power Authority (the state-owned monopoly
responsible for the generation, transmission and distribution of electricity in Nigeria).
The reforms then continued with the unbundling and privatization of the NESI to create
semi-autonomous commercial subsectors.
Despite these reforms, the NESI still faces the challenge of satisfying the power
demand which is so desperately needed to meet the Federal Government's colossal
target to achieve 20 gigawatts (GW) of available electricity capacity by 2020.
The key legislation governing the electricity sector in Nigeria is set out below.
Electric Power Sector Reform Act 2005 The Electric Power Sector Reform Act 2005
Chapter E7 Laws of the Federation of Nigeria 2004 (EPSRA) is the primary legislation
that governs the NESI and the NESI value chain (including electricity generation,
transmission, distribution, supply and trading). The EPSRA also established the NERC
which is responsible for licensing and regulating persons engaged in the generation,
transmission, system operation, distribution and trading of electricity. The NERC has
issued several regulations and guidelines regulating the NESI
Meter Asset Provider Regulations. The NERC issued the Meter Asset Provider
Regulations on 8 March 2018 under the EPSRA to address the severe revenue shortfall
of power Discos (arising mainly from the aggregate technical, commercial and collection
(ATC&C) losses of the Discos) and the public outcry about the overcharging of end
users for electricity under the estimated billing system. The Regulations are anticipated
to (among others):
Encourage the development of independent and competitive metering services.
Eliminate estimated billing practices by Discos.
Attract private sector investors to the provision of metering services.
Close the metering gap through an accelerated meter roll out.
Enhance revenue assurance
The current reforms target gas utilization for electricity supply in Nigeria. Nigeria has
relied significantly and almost exclusively on hydropower which is also the case in
countries like Benin, Ghana, Togo, Guinea and mali etc. There are currently two main
types of power plants operating in Nigeria viz
2. Thermal or fossil fuel
As of December, 2013, the total installed capacity of power plants was 6,953mw,
available capacity was 4,598mw, actual average generation was 3,800mw.
As of December, 2014, the total installed capacity the power plants was 4,949mw. The
ownership of these power plants are either fully owned by the Federal Government of
Nigeria (in which there is a plan to privatize the power plants) or owned by the Niger
Delta Power Holding Company (NDPHC) and was being owned by the state
governments or private companies/individuals, in which such power plants are referred
to as being independent power producers (IPP)
Aderibigbe, D. A. Power Supply to industry, Pros and cons of Available Options. A
presentation at the one-day conference of Nigeria society of chemical engineers,
held at the Ikeja Sheraton Hotel, Lagos.
Oragoruwa, B. ‘Nigerian Power Sector Reforms and Privatization’ Director General
Bureau of Public enterprise. ECN was created pursuant to the Electricity Co-
orporation Ordinance 1950 Electric Power Sector Reform (EPSR) Act 2005 Cap
E7. (Revised Laws of the Federation of Nigeria (LFN) 2004 Electric Power Sector
Reform (EPSR) (2005). EPSR Act 2005 S.
Gnanasouou, E. (2008). ‘Boosting the Electricity Sector in West Africa: An Integrative
Vision. International Association of Energy Economies. Third quarter, at pg. 23
Manafa, N. (1995). Electricity Development in Nigeria. Lagos: Rasheen Publishers, PR