The Head of Mini-Grids at Engie Energy Access, Onyinye Anene-Nzelu, has explained how the New Electricity Act would revolutionize the power sector by breaking the long-standing monopoly and inviting a multitude of investors into the market.
This disclosure was made during the Nairametrics Webinar tagged ‘Embracing Opportunities for a Prosperous Power Sector,’ which was held on Saturday.
Onyinye said the new electricity act would create a more competitive market as it would be opened up to more investors.
A More Competitive Market
She noted that the new electricity act would help accelerate the framework of the old EPSR act which privatized certain segments of the sector. She said:
“The EPSR which this new electricity act repeals actively built a framework for a competitive market. So the market was supposed to be in 4 stages until we get to a fully competitive market.
What this act is doing is that it is already accelerating what was pre-planned in the earlier days. When the EPSR came in, it unbundled and privatized certain segments of the market, so we had 11 Discos, we had GenCos, and the regulator was one.
After that was done, the market was locked again, so it was like we created another monopoly. We brought in 20 people and locked it. So what this new act is doing is that it’s opening it up for everybody again, we are transitioning into where everybody can come in, fully decentralized and de-monopolized, so investors can come in.”
She also noted that if the new act is implemented properly, we would see new electricity infrastructure in place which would attract investors and also deliver affordable and reliable power supply due to the competition that would be in place.
37 New Electricity Market
Onyinye also noted that the new act would possibly create 37 new as each state government would likely have their regulation and create its market. She said:
“We would potentially have 37 new electricity markets because every state is supposed to write their regulations and have a market.
So it introduces competition amongst the states because the state that can deliver the right policy framework would attract the most investment and can solve the electricity problems way earlier than any other state.”
She also noted that the new act would enable state governments to look inwards as they create policies that would attract local manufacturing.
Back Story
President Bola Ahmed Tinubu recently signed the Electricity Act into law. The Act, which was first passed in July 2022, was made to replace the Electric Power Sector Reform Act (EPSRA), which was signed into law by former President Olusegun Obasanjo in 2005.
The 2023 Electricity Act provides a framework to guide the post-privatization phase of the Nigerian Electricity Supply Industry (NESI) as well as encourage private sector investments in the sector.
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