Two of the new private owners of electricity distribution companies (Discos) in Nigeria are set to open up a bid process for the supply of off-grid power through embedded generation, BusinessDay can report.
Eko Electricity Distribution Company (Eko Disco) and Kano Electricity Distribution Company are leading the way to seek power for their hapless customers from outside the transmission network because of the inadequacy of the national grid.
Eko Disco is expected within the next one week to put out a tender notice requesting expressions of interest from potential power producers capable of supplying off-grid electricity to what is easily the largest power market in sub-Saharan Africa.
Kano Distribution Company for instance, hoped to receive 160 megawatts (MW) of power daily from the grid when the new owners purchased the entity from government last year, but so far the average power supplied to it has remained at 40MW of which about 20MW is statutorily meant to go to the Republic of Niger.
Off-grid power is electricity available for supply to specific consumers through a dedicated distribution network but not connected to the national grid. The new investors are looking to tap this to better serve customers.
Chima Ibeneche, director, energy, utilities and mining, PricewaterhouseCoopers (PwC), said: “Any idea by any of the distribution companies to increase power supply is good for the country. There is not enough power in the transmission grid because of the weakness of the network.
“People have been generating off-grid power over the years. Commercially, the market is already proven. What they are trying to create is a market for people who generate off-grid power. Once the market is profitable, more people will move in and supply,” he added.
Other Discos are experiencing similar gaps between their expectations, which formed the basis of the purchase and actual power delivered by the Transmission Company of Nigeria (TCN).
Under current approval by the regulator, the Nigerian Electricity Regulatory Board (NERC), a Disco can secure off-grid supply from embedded generators who do not have to go through the epileptic transmission network.
“I am aware of that state of things and I think it’s a good thing that these distribution companies are aggressive. Actually, I had previously advised clients to go this route, so I think it’s a good development,” said Ayodele Oni, an energy law and policy expert and senior associate in top law firm, Banwo & Ighodalo.
By: FEMI ASU
