April 16, 2024

Stakeholders urge Federal, State governments to model decentralized electricity market after India’s experience, as States participate in power sector

Oredola Adeola


Stakeholders in Nigeria’s electricity sector have called on the Federal and State Governments to model a new decentralized electricity market after India’s experience in promoting competition in generation, distribution, and transmission, as well as capacity in renewable energy built through the private sector.


This was part of the major highlights at the Nigerian Electricity Regulatory Authority, NERC Stakeholder Workshop on the Constitutional Amendment and Electricity Act 2023, that was attended by representatives of the state governments and other critical power sector players.


EnergyDay’s check showed that the NERC’s stakeholders engagement forum is coming on the sideline of the enactment of the new Electricity Act by President Bola Ahmed Tinubu, which granted legislative autonomy to the federating states to participate effectively in the electricity generation, transmission, and distribution within their respective jurisdictions.


It was further revealed that India’s solution in the unbundling of State-owned electricity boards has improved competition in generation, distribution, and transmission as well as capacity in renewable energy built through the private sector.


The experts urged the state governments to encourage private sector participations in renewable energy generation by providing incentives such as tax breaks, subsidies, and favorable regulation.


This  according to them can help to increase the share of renewable energy in the country’s energy mix and reduce dependence on thermal and hydro power generating sources.


Vijay Dhonde, Managing Director, MD/CE EEDC, Praveen Chorghade presenting a paper on Multitier Electricity Market Regulation: The Indian Experience together with Vijay Dhonde, in his paper examines the history of the power sector in India while also comparing & contrasting it with the Nigerian electricity sector.


According him, there are a lot of similarities between India and Nigeria; electricity reform is one major similarity. To start with, States will have to work together to share capacity.


He said, “India has made significant progress in unbundling of State-owned electricity boards improving competition in generation, distribution and transmission as well as capacity in renewable energy built through the private sector.


Dafe Ekpeneye, NERC Commissioner, Legal, Licensing and Compliance in his remarks on the Indian electricity structure said that the Indian example is saying this is what we think works, “these are the mistakes we made, and what we think you can build upon.”


He added that no one can tell a State what it can or cannot do. We are not sitting here with the belief that NERC gives orders.


“This meeting is for us to sit together and understand what is happening. Let us get the best practice and put together something on ground that works best for Nigerians.” Ekpeneye said.


Shola Shashore,Lagos State Permanent Commissioner for Energy, on her part, the forum offers us the opportunity to listen to different concepts and take lessons from here. She hinted that each of the state must look inward and decide what it wants to do. She noted that after the forum, all representatives of the governors will decide on the best way forward.


EnergyDay gathered that NERC and the state government hope to use the workshop to dialogue and collaborate on the development of a robust roadmap for a successful implementation of multi-tier electricity markets as well as discussing measure required to ensure the smooth implementation of the provisions of the new legislation.