Nigeria Governors’ Forums has announced that it plans to license new power distribution companies (DISCOS) in the distribution segment of the power sector to bolster electricity supply across the 36 States.
Gatekeepers News reports that this is contained in NGF’s report on electricity policy and recommendations to the federal government.
They plan on granting licenses to new power distribution companies (DisCos) in various territories and geopolitical zones across the nation to boost market competition and enhance efficiency within the sector.
At the moment, Nigeria’s electricity distribution landscape comprises eleven DisCos across the thirty-six states and the Federal Capital Territory (FCT).
However, despite their private ownership and management, the DisCos operate within the federal government’s predictions.
After the enactment of the Electricity Act 2023, which grants State governors autonomy over power generation, distribution, and regulation within their respective States, the governors are pursuing approval for additional licenses to foster increased liquidity in the sector.
Under the recommendation for the development of a multi-tier electricity market, the governors are determined to create a State electricity market that will be appropriate for each State.
Also, the market design may include energy resources within the States such as gas, hydro, wind, biomass, solar, etc, among other things.
The State governors also suggest licensing new DisCos and creating a new business model that is suitable for each State.
The forum said, “To cultivate robust competition and facilitate innovation, it is essential for States to expand the constellation of electricity providers and business models accessible within a state electricity market beyond Successor DisCos operating within the State territory.”
“Consequently, States will license new players and develop new business models that would introduce more competition in both the wholesale and retail markets within their territories.”
Regardless of the privatization initiative of the power distribution companies (DisCos) in 2013, Nigeria continues to struggle with persistent challenges in its power sector, mainly characterized by inadequate power supply.
The whole country currently depends on only eleven DisCos to cater to its electricity needs nationwide. The situation has shows the complexities and deficiencies within the sector.
