The constitutional amendment and the recently passed Electricity Act 2023 (EA) that allow states to participate in areas covered by the national grid have the potential to remarkably change the Nigerian power landscape. Our report highlights the potential outcomes and the challenges that may hinder states from fully exercising these new powers. 

We have included case studies from countries that have a history of state participation in the electricity sector with a mix of private and public involvement and provided an analysis of business model options that may be adopted to achieve optimal results in state electricity markets. The impact of state participation on current owners of distribution utilities and insights on how transmission services may be provided under the new arrangement are also discussed in detail. 

We note that a new challenge in defining the scope of state participation in electricity regulation has emerged considering the amendment and the EA, and a key part of our report is focused on the coordination of the powers of the existing federal regulator, the Nigerian Electricity Regulatory Commission (NERC), and state regulators, which are yet to be established. We provide guidance on how their powers may be delineated based on the provisions of the new EA and suggest that this separation must be clearly defined, with a focus on harmonizing regulations, facilitating information exchange, and promoting collaboration to achieve a cohesive and efficient national electricity market. 

Finally, we provide a series of strategic steps that may be taken by state governments to establish and operate electricity markets that are tailored to their own needs. 

3 Trackbacks:

[…] the July 2023 report on states’ participation in the electricity sector, the Electricity Markets Rates and Consultants […]

[…] Market Rates and Consultants (EMRC) in a recent report, highlighted some business models that states can consider in making their entry into Nigeria’s […]

[…] five states in Nigeria can build over 100 km of transmission lines. This is according to a recent report by the Energy Market and Rates Consultants (EMRC), published on July 27, […]

Comments are closed.