Nigeria Electricity Supply Industry (NESI)

The Nigeria Electricity Supply Industry (NESI) refers to the entire system involved in generating, transmitting, distributing, and supplying electricity in Nigeria. It encompasses various entities such as the Transmission Company of Nigeria (TCN), Electricity Distribution Companies (DisCos), Electricity Generation Companies (GenCos), and regulatory bodies like the Nigerian Electricity Regulatory Commission (NERC).

The Nigerian Electricity Supply Industry (NESI) has seen notable transformations since 2005 when the Electric Power Sector Reform Act became effective. The shift from a state-run model to a more competitive market involving private investments is a critical step. This transition aimed to address inefficiencies, attract investment, and ultimately provide more reliable electricity supply to consumers.



Snapshot of History of Electricity Supply in Nigeria


Electricity generation in Nigeria started in 1886 with two generators in Lagos. The Electricity Corporation of Nigeria (ECN) was formed in 1951 by an Act of Parliament, and the Niger Dams Authority (NDA) was created in 1962 for hydroelectric power.

In 1972, ECN and NDA merged to form the National Electric Power Authority (NEPA), responsible for generating, transmitting, and distributing electricity nationwide.

In 1990, NEPA underwent partial commercialization and the authority was divided into four independent divisions: Generation and Transmission; Distribution and Sales; Engineering; and Finance and Administration.

NEPA was restructured in 2005 into the Power Holding Company of Nigeria (PHCN) due to power sector reforms. The Electric Power Sector Reform (EPSR) Act 2005 allowed private companies to take part in electricity generation, transmission, and distribution. Federal Government unbundled PHCN into 11 distribution companies (DisCos), 6 generation companies (GenCos), and a transmission company (TCN). The Nigerian Electricity Regulatory Commission (NERC) was also established as an independent regulator. The transmission company is still government-owned.

In 2023, the EPSR Act 2005 was replaced with the new Electricity Act 2023. The Electricity Act 2023 further unbundled Nigeria's electricity industry. Unlike the EPSR Act 2005, it allows Nigerian states to generate, transmit, and distribute electricity if they choose. They can also create their own independent electricity regulatory commissions.



NESI History


OverviewOverview

Unbundling and Privatization

The Power Holding Company of Nigeria (PHCN) was unbundled into separate companies responsible for generation, transmission, and distribution. This process aimed to create a more competitive and efficient market.

Generation Companies (GenCos)

These are now largely privately owned, focusing on increasing generation capacity and efficiency.



electric-tower

Transmission Company of Nigeria (TCN)

This remains state-owned but has seen increased investment to improve its infrastructure and capacity.


Distribution Companies (DisCos)

Privatized entities responsible for distributing electricity to consumers. They are working on reducing losses and improving collection rates..

Regulatory Bodies

The Nigerian Electricity Regulatory Commission (NERC) oversees the industry, ensuring compliance with regulations and standards.


Investments and Reforms

Ongoing efforts include attracting both local and international investments, promoting renewable energy, and implementing policies to enhance the overall efficiency of the sector.


Some of the NESI industry participants are:



1.



Federal Ministry of Power (FMP)

Ministry of Power


2.


Nigerian Electricity Regulatory Commission (NERC)

NERC


3.


Electricity Generation Companies (GenCos)

Electricity Generation


4.


Transmission Company of Nigeria (TCN)

TCN


5.


Electricity Distribution Companies (DisCos)

Electricity Distribution


6.


Nigerian Bulk Electricity Trading Plc (NBET)

NBET 3


7.


Gas Aggregator Company of Nigeria (GACN)

GACN


8.


Nigerian Electricity Management Service Agency (NEMSA)

NEMSA


9.


Independent System Operator (ISO)

ISO


10.


National Hydroelectric Power Producing Areas Development Commission (N-HYPPADEC)

N-HYPPADEC


11.


Rural Electrification Agency (REA)

REA



nesi

Some of the NESI industry participants



NESIValuechain

Nigeria's electricity value chain



Key Components of Nigeria Electricity value chain

GenArrow
S/N
P.S.
I.C.(MW)
YOI
Owner
1.
KAINJI-HYD
760
1968
FGN-CONCESSION
2.
JEBBA-HYD
578
1985
FGN-CONCESSION
3.
SHIRORO-HYD
600
1990
FGN-CONCESSION
4.
ZUNGERU-HYD
700
FGN-CONCESSION
5.
DADINKOWA-HYD
39
CONCESSION
6.
AES
290
2001
IPP
7.
AFAM IV-V
776
2002
FGN
8.
AFAM VI
624
2010
IPP
9.
ALAOJI
1074
2015
IPP
10.
AZURA-EDO
450
2017
IPP
11.
DELTA
900
1990
FGN-IPP
12.
EGBIN
1320
1986
FGN-IPP
13.
GBARAIN
1125
2017
IPP
14.
GEREGU
414
2007
FGN-IPP
15.
GEREGU-NIPP
435
2012
NIPP
16.
IBOM POWER
191
2009
IPP
17.
IHOVBOR
450
2013
NIPP
18.
ODUKPANI
563
2015
IPP
19.
OKPAI
480
2005
IPP
20.
OLORUNSOGO
336
2007
FGN
21.
OLORUNSOGO-NIPP
675
2012
NIPP
22.
OMOKU
150
2006
IPP
23.
OMOTOSHO
336
2005
FGN
24.
OMOTOSHO-NIPP
450
2012
NIPP
25.
PARAS ENERGY
65
2016
IPP
26.
RIVERS-IPP
290
IPP
27.
SAPELE
1020
1981
IPP
28.
SAPELE-NIPP
450
2012
NIPP
29.
TRANS-AMADI
136
2009
IPP
GenArrow
S/N
Distribution Company
1.
Abuja Electricity Distribution Company (AEDC)
2.
Benin Electricity Distribution Company (BEDC)
3.
Eko Electricity Distribution Company (EKEDC)
4.
Enugu Electricity Distribution Company (ENEDC)
5.
Ibadan Electricity Company (IBEDC)
6.
Ikeja Electricity Distribution Company (IKEDC)
7.
Jos Electricity Distribution Company (JEDC)
8.
Kaduna Electricity Distribution Company (KDEDC)
9.
Kano Electricity Distribution Company (KEDCO)
10.
Port Harcourt Electricity Distribution Company (PHEDC)
11.
Yola Electricity Distribution Company (YEDC)
Legend
  1. P. S.: Power Stations
  2. I. C.: Installed Capacity
  3. YOI: Year of Installation
  4. FGN.: Federal Government of Nigeria
  5. IPP: Independent Power Producer
  6. NIPP: National Integrated Power Project
    7.