Sarah Wolters
Low electrification worsens socio-economic inequalities and hinders industrial development. In this context, the Nigerian government committed to universal electricity access by 2030.
However, setting ambitious goals is not enough. To tackle the issue of low electrification rates, a stable policy and a reliable legal framework are key elements to support energy technology development especially because of the high investments required.
In Nigeria, the energy law shows supporting elements as well as barriers to wider electricity access.
The unclear allocation of roles regarding legislative competencies is one of the elements that potentially hinders wider electricity access. This circumstance causes confusion as the Electric Power Sector Reform Act (EPSRA) – imposed at federal level – supports regulations beyond the main electricity grid instead of cooperation with the state governments. Moreover, the Nigerian Electricity Regulatory Commission (NERC) regulates more than what is stated in the EPSRA, which raises questions regarding the legal force of the regulations declared by the NERC. These confusions might slow down the improvement of electricity access and need to be clarified.
Furthermore, the Eligible Customer Regulations (ECR) created by the NERC contain good basic rules in section 37, but they are not enough to reach the goals stated in the ECR itself. These good basic rules are found in the definition of some rights and obligations of the suppliers, grid operators and customers. For example, there are regulations about a supplier of last resort who supplies a customer concerned in case the contracted supplier fails. However, the ECR does not contain enough elements for the promotion of a rapid expansion of electricity supply and the improvement of financial liquidity of the electricity industry although both aspects are stated as objectives in the ECR.
The focus of the ECR seems to be on other aims, such as the facilitation of competition in the electricity supply, which is not a panacea for low electricity access rates. Therefore, the lack of feasibility signals to investors in the ECR demonstrates a barrier to wider electricity access.
In contrast, the NERC regulation on mini-grids provides supporting aspects regarding electricity access as it works around the issue of the absence of the main grid infrastructure elegantly. Section 3 (1) defines a mini-grid as “[…] any electricity supply system with own power generation capacity, supplying electricity to more than one customer and which can operate in isolation from or be connected to a Distribution Licensee’s network […]”. As mini-grids are renewable-energy-friendly they could attract future investors, the regulations about mini-grids should be expanded to develop their full potential arising from the future-orientated and decentralised nature of mini-grids.
Beyond the supporting and hindering elements, the legal framework lacks certain aspects, such as financial distributions to state governments to better address local peculiarities as well as rules for citizen participation.
Another missing element is renewable energy which needs to be supported by federal law for the stimulation of investments as the legal framework does not set enough stable incentives for better electricity access.
One more important issue to consider is institutional quality, including respect for the rule of law, which cannot be resolved by a change of energy law alone.
Sarah is a Placement Research Fellow with Dataphyte From the University of Edinburgh