President Buhari has signed into law a constitutional amendment that allows states across the country to licence, generate, transmit and distribute electricity. On March 17, 2023, the Special Assistant to the President on New Media, Mr. Tolu Ogunlesi, posted on Twitter microblogging platform that Nigerian states can now have some sort of power autonomy in areas that were not covered by the national grid, pre-amendment. “This is genuine realistic restructuring through the constitution,” he wrote.
This amendment will impact business, states’ internally generated revenues, prepaid metering for households and businesses as well as the distribution companies (DisCos). Now that states have been granted the power to generate, distribute and transmit electricity, all states will be allowed to develop their electricity market frameworks which will be specific to their capacity and realities. Nigerian Electricity Market Lawyer, Ivie Ehanmo told the press that as electricity markets advance within states, with commensurate improvements to the current grid bottlenecks on a national scale, the decentralized electricity market structure will enable the opportunity for states to sell power to the national grid.
This development will decrease pressure on the national grid.
The lawyer also noted that residents will be able to undertake transactive energy, where producers and consumers of energy are able to transact with each other directly. Decentralization of the electricity market will also allow for better accountability and transparency and will promote and foster competition in the market. This will in the long run influence electricity tariffs toward a downward trajectory. She added that a decentralized structure will decrease pressure on the grid and allow for cheaper power to be supplied to vulnerable and life-line customers in unserved and underserved areas.
According to Ehanmo, this will promote grid flexibility and reduction in grid expansion costs. In addition, the amendment will allow states to expand and explore their available energy mixes to undertake adequate system planning and demand forecasting. For instance, Lagos intends to deploy and utilize Off-Grid Solutions (OGS) to electrify unserved and underserved areas via the use of clean energy products. This will create room for the state to deploy carbon pricing mechanisms, particularly carbon offsetting, by trading the clean energy attributes of electricity generated from renewable energy sources, thus earning revenue for the state, improving the living conditions of residents within the State, and supporting the country in meeting global climate change obligations.
Socioeconomic status of states will be improved.
A power sector analyst, Bayode Akomolafe believes that the amendment means a new level of accountability and responsibility for state governments. Each state government has the tool and power to improve the socioeconomic status of their state through the deployment of energy resources as seen fit. He sees this constitution amendment as a gradual devolution of power from the Federal Government to the State Governments. “The state government will need to start building internal capacity for a regulatory framework, policies, and infrastructure to improve electricity resource development,” he said.
He said that this can be achieved through the engagement of sectoral experts, the private sector, national organizations and transnational networks for technical and non-technical support and development. Presently, state governments now have the power to utilize the electricity resources in their state for electricity generation subject to the approval of the Nigerian Electricity Regulation Commission (NERC) and other relevant federal agencies. In the same vein, the Chief Executive Officer (CEO) of Revive Earth, Chukwuemeka George Eze, told the media that the policy amendment means more Internally Generated Revenue (IGR) for states, which is a great opportunity to diversify their power generation and distribution, and a more reliable supply network.
This is an opportunity for DisCos to improve capacity.
This amendment also creates an opportunity for distribution companies to improve capacity and increase revenue flow if suitable strategies are deployed and new growth plans are implemented. Akomolafe said that this also means that the regional monopoly of DisCos will end as new state players will emerge. This resulting competition will provide consumers with options which is a catalyst for improved service delivery. He foresees a collaboration with smaller players, as the state players can leverage DisCos’ existing technical and commercial infrastructure and capacity for accelerated growth.
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Law amendment gives states power autonomy – States can now generate, distribute and transmit electricity. – Express your point of view.
The states needed this power for a long time. Now they will be able to do somethings by the power that is now vested in them without intervention from federal government.
The expansion and investigation of distributed generation blends by states is made possible by the modification, allowing for more thorough network modeling and request predictions.
This is wonderful news since it means that states will have the possibility of supplying power to the grid thanks to the new decentralised model of the power sector.
The public has reason to rejoice: deregulating the power industry will improve market and transparency while also boosting competitiveness. Plenty state will be affected.
Our federal government ought to work towards bettering the living conditions of citizens inside the state while also providing support for the nation in satisfying the country’s commitments regarding the worldwide climate crisis.
the new decentralised model of the power sector will help a lot and each sector can grow on their own.
Now states should be able to work on developing and proving stable electricity supply to the people of the states.
This is nice state can now generate and distribute power not depending of FG all the over load of power sector will shift to the state now so they can be controlling the power of their state
Is good to hear but this government can say anything but to accomplish it is another problem for this Nigeria government. If they can do it fine and good
State governments will now be held to a higher standard of authority and responsibility. We look up to them to deliver the best.
There is no reason why electricity should be on the concurrent list of the constitution because state government is closer to the citizens and they know what their people want and how they want it.It is a very good development because it will improve the electricity generation of the country at large.
This is a great opportunity to diversify power generation and distribution, which will in turn result to a more reliable power supply in the states.
The federal government should help the state improve the quality of life for its residents while also helping the country meet its commitments related to the global climate issue.
It’s great that the states no longer have to rely on the federal government for their electricity needs; as a result, the power sector’s excess load can be distributed throughout the states instead.
This is a great news for the nation. The President Mohammed Buhari has finally signed the state power autonomy. This will be the answer for power failure in most states.
Finally states can now generate, distribute and transmit electricity. It will lessen the pressure on the national grid.
A good decision by the FG. This will create room and allow states to expand and explore, be accountable and responsible for power supply and provide energy resources as seen fit for the state.
All states will be able to create their own electrical market frameworks that are tailored to their capabilities and realities now that governments have the authority to produce, distribute, and transport electricity.
This is good news. Each state would be in control of it’s power sector.. Let’s see how each state manage the distribution of power
Because state governments are more accessible to their constituents and have a better grasp on their needs and preferences, the issue of energy should not be included on the matters enumerated in the constitution.