11 interesting facts about the 2023 Electricity Act signed by Tinubu

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On June 9, 2023, President Bola Tinubu signed the 2023 Electricity Act into law, aiming to create a comprehensive legal and institutional framework for the Nigerian Electricity Supply Industry (NESI). This new law, which replaces the 2005 Electricity and Power Sector Reform Act, focuses on liberalizing the Nigerian power sector.

Here are 11 key benefits of the recently enacted 2023 Electricity Act:

1. The Nigerian Electricity Regulatory Commission (NERC) will serve as the regulator for the Nigerian electricity sector.
2. The law permits states, companies, and individuals to generate, transmit, and distribute electricity.
3. Entities licensed to generate electricity must fulfill renewable generation obligations specified by NERC.
4. NERC can delegate regulatory responsibilities to state regulators once they are established.
5. NERC will only transfer regulatory powers to states that have enacted their own electricity market laws.
6. Individuals can construct, own, or operate electricity generation projects up to one megawatt or distribution projects up to 100 kilowatts without requiring a license, subject to commission approval.
7. Electricity-generating companies will be required to generate power from renewable sources, purchase renewable energy, or procure renewable energy certificates.
8. The law grants authority to lawmakers’ power committees in the Senate and House of Representatives to oversee the NESI.
9. While states can regulate electricity markets by issuing licenses for mini-grids and power plants within their boundaries, the act prohibits interstate and transnational electricity distribution.
10. Currently, only Lagos, Edo, and Kaduna states have enacted electricity market laws and can regulate their respective markets.
11. For states without electricity market laws, NERC will continue to regulate electricity generation and transmission within those regions.

The 2023 Electricity Act introduces significant changes to the Nigerian power sector, promoting competition and renewable energy integration while ensuring regulatory oversight.