The success of the Electricity Act largely rests on its effective implementation. Therefore, new President should appoint a committed and incorruptible Minister of Power that has broad experience of the operations and politicking within the power sector.
The Manufacturers Association of Nigeria, MAN, stated the above while reacting to the signing of Electricity Act by President Bola Tinubu.
The group noted that the signing of the Electricity Act 2023 is a major step towards the right direction. Following the removal of subsidy, this is another reflection of the boldness and commitment of the new administration towards the diversification and decentralization of the power sector.
“The empowerment of the State Governments and private investors, the adoption of renewable energy and the reformation of the governance structure of the power sector are capable of driving investment, improving electricity access and fostering economic growth”, noted the association.
However, MAN recommends as follows: tightening the security infrastructure as no investor wants to do business in a terrorized economy, rendering legal, financial and technical supports to state governments yet to establish electricity market laws, state governments should partner with existing agencies and operators in the power sector as the costs of building new power distribution networks can render the investment less lucrative and streamline NERC and states’ regulations to avoid bottlenecks for multistate investors.
Others are addressing the uneven distribution of gas to avoid delay in states’ execution of mega-power projects, while states concentrate on small confined democratized power supply systems, there is need to have in the pipeline a long-term plan of ensuring operational efficiency of the national grid, the success of the Act largely rests on its effective implementation. Therefore, The new President should appoint a committed and incorruptible Minister of Power that has broad experience of the operations and politicking within the power sector, the power sector is highly capital-intensive. Therefore, there is need to reduce the lending rate to encourage private investments in min-grids and renewable energy and quickly and adequately address the hitches surrounding the fuel subsidy removal by providing transparent palliative measures and socio-economic infrastructure that directly and immediately mitigate its untold hardship on businesses and the masses.
Highlight of the Electricity Act 2023
In replacement of the Electricity and Power Sector Reforms Act 2005, the Electricity Act 2023 is aimed at providing an all-inclusive framework which will serve as a guide to the decentralization of the power sector in order to encourage private investment and build a competitive electricity market. Major high points from the Electricity Act are as outlined: States, private companies and individuals are now legally permitted to generate, transmit and distribute electricity, power generation licensees are obligated to meet renewable energy generation as prescribed by the NERC and NERC will only surrender regulatory responsibilities to states with established electricity market laws.
others are without a license but an undertaking, the Act empowers any private individual or company to generate not more than 1MW in aggregate at a location, subject to the determination of the NERC, private individuals or companies can sign an undertaking to distribute electricity of not more than 100 Kilowatts in aggregate at a location, the Act prohibits interstate or transnational electricity distribution, generating companies are mandated to either generate or purchase electricity from renewable sources or procure instruments for generating renewable energy, the Act empowers legislative committees to carry out an oversight function over the NESI and except for Lagos, Kaduna and Edo with established electricity market laws, electricity in other states will still be regulated by NERC.