The Nigerian Electricity Regulatory Commission, on behalf of the Federal Government, has granted 13 new licenses for off-grid and embedded power generation, independent electricity distribution, and electricity trading
The issuance of the new licenses took place in the third quarter of 2023, with a total electricity generation capacity of 40.9 megawatts by the licensees.
On other licences that were issued, the commission said, “One new licence for Independent Electricity Distribution Network, one new licence for trading, three off-grid generation licences, one embedded generation, and one IEDN licence.
The latest third-quarter 2023 report from NERC, under the section ‘Licences and Permits Issued or Renewed,’ disclosed that five new off-grid generation licenses, producing a total of 8.81MW, were granted during the review period. Additionally, one new license for embedded generation with a capacity of 5MW was issued.
The commission clarifies that it grants licenses for various aspects of the Nigeria Electricity Supply Industry, including electricity generation, transmission, distribution, trading, and system operations.
“For activities that do not require licenses based on the provisions of sections 65-68 of the Electricity Act 2023, but still require authorisation from the commission, such as off-grid captive power generation and mini-grid development, the commission issues permits to the operators following a review of the relevant applications,” the NERC stated.
Nigeria, with a population exceeding 200 million people, currently generates between 3,500MW and 5,000MW of electricity—an inadequacy that has been deemed subpar for Africa’s largest economy.
For instance, on a recent Monday, the country’s power generation at 6 am was 4,357.09MW, with peak and off-peak power generation the preceding day recorded at 4,579.5MW and 4,062.98MW, respectively. Widespread blackouts, especially in rural communities, persist due to the country’s limited power generation capacity.
As of June 2023, Nigeria held the designation of having the largest population lacking access to electricity, with 86 million out of its 200 million people living without electricity as of 2021, according to a collaborative report by international agencies such as the International Energy Agency, International Renewable Energy Agency, United Nations, and the World Health Organisation.
Other countries with significant populations lacking electricity access as of 2021 include the Democratic Republic of the Congo (76 million) and Ethiopia (55 million).
Despite these challenges, the Federal Government and stakeholders in the power supply sector have been actively working to enhance Nigeria’s electricity output.
This commitment led to the privatization of successor generation and distribution companies in November 2013.
The issuance of licenses by the government through NERC for electricity generation is a strategic measure to enhance the country’s power supply and reduce the number of individuals without access to electricity.
Further elaborating on the 13 new licenses for power generation, distribution, and trading, NERC, in its report, outlined that Daybreak Power Solutions Limited obtained eight licenses for diverse off-grid power generation projects in Lagos, Abia, Borno, Kano, Oyo, and Abuja.
Ekiti Independent Power Project secured a license for the development of a 5MW gas-fired embedded power project in Ekiti State.
Olokiti Power Distribution Limited received an Independent Electricity Distribution Network license for operations in Ekiti State.
Ember Power Limited acquired an electricity trading license, while Island Power Limited was granted a license for the development of a 10MW embedded gas-fired power project in Lagos.
In addition, the Energy Company of Nigeria Limited received an Independent Electricity Distribution Network license, set to operate within Lagos State. Despite substantial financial investments in the sector, power consumer groups have consistently criticized the inadequate electricity supply in Nigeria. They have urged both the government and industry operators to intensify efforts in ensuring the provision of sufficient electricity to the Nigerian populace.