President Tinubu Signs 2023 Electricity Act — Importance To The Economy



The 2005 Electricity and Power Sector Reform Act has been replaced by the new Electricity Act, which was ratified by President Bola Tinubu.

During the presidency of former President Muhammadu Buhari, the Electricity Act was initially enacted in July 2022.

The new bill seeks to promote private sector investments in the Nigerian power sector and de-monopolise the nation’s electricity generation, transmission and distribution at the national level

Here are some benefits of the new Electricity bill:
  1. The approval means that anyone may build, own, or operate an undertaking for the generation of electricity with a capacity not exceeding one megawatt in aggregate at a site, an undertaking for the distribution of electricity with a capacity not exceeding 100 kilowatts in aggregate at a site, or any other capacity as the Commission may determine from time to time, without a licence.
  2. The Nigerian Electricity Regulatory Commission may impose requirements for renewable generating on those who hold electricity generation licences.
  3. Electricity generating companies will be mandated to either generate power from renewable energy sources, purchase power generated from renewable energy or procure any instrument representing renewable energy generation.
  4. Through their respective Committees on Power in the Senate and House of Representatives, lawmakers are given the authority to perform oversight duties and function over the NESI.
  5. Granting states, businesses, and people the ability to produce, transmit, and distribute electricity.
  6. States can control their electricity markets by granting permits to private investors so they can run power plants and mini-grids within their borders. However, the Act forbids the distribution of power over state and international borders.
  7. The Nigerian Electricity Regulatory Commission will have the authority to oversee the country’s electricity market.
  8. The commission can transition regulatory responsibilities from itself to state regulators when they are established.
  9. Until a state has passed its electricity market laws, NERC will continue to regulate electricity businesses in such states.
  10. For now, only three states -Lagos, Edo and Kaduna—have electricity market laws and can start regulating their markets. But for other states without such laws, NERC will regulate their electricity generation and transmission.

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