A Review of the Policies for Power Sector Reform in Nigeria
The Nigeria Power Sector appeared to have an awesome history of electricity governance, but the development of the sector has been greatly impeded. This could be as a result of its inability or failure to effectively implement the legal policies and institutional frameworks and more still the proactive measures to bring about effective sector regulation through sustainable socially, economically viable and proactive management of the power sector in Nigeria.
The current system of power sector reform began in the year 2000 with the implementation of the Electric Power Implementation Committee (EPIC). The committee drafted the National Electric Power Policy (NEPP) in the year 2001, leading to the Electric Power Sector Reform Act 2005. The reform comprised essentially two main components, including: restructuring and privatization1. It is based on this premise that this essay sought to review the policies for power sector reform in Nigeria, with emphasis on the Electric Power Sector Reform Act 2005.
In conforming to the global trends in the power sector, the Nigerian government enacted the Electric Power Sector Reform Act 2005 (The Act) of which under the administration, the Nigerian Electricity Regulatory Commission (NERC) is to perform as the major regulatory body of the electricity power sector, the extant of the (NERC) was a result of the Act which revoked the National Electric Power Authority (NEPA) and Electricity Act. By the reforms the monopoly given to the National Electric Power Authority (NEPA) for several decades was brought to an end, as the then democratic administration strived to liberalize the sector. Although the Nigerian power sector became liberalized, the sector has experienced some divestment from the private sector and collapse of contract talks with some potential private/Independent Power Producers (IPP’s), while the consumers in Nigeria have remained hopeful.
The Electric Power Sector Reform Act (EPSR) 2005 was established to provide the general legal framework for the formation of several legal entities (corporation) to take over the assets and liabilities of the old regulatory body and to establish the NERC (Nigerian Electricity Regulatory Commission) as the new agency for generation, transmission and distribution of electricity in Nigeria. The EPSR Act was also established to provide for the formulation of companies to take over the functions, assets, liabilities and staff of the National Electric Power Authority; develop competitive electricity markets, establish the Nigerian Electricity Regulatory Commission and regulation of the generation, transmission, distribution and supply of electricity; enforce such matters as performance standards, consumer rights and obligations; and to provide for matters connected with or incidental to the foregoing. The Act brought the existence of a regulatory agency known as the Nigerian Electricity Regulatory Commission (NERC) as a body corporate with perpetual succession and power to sue and be sued in its corporate name and to as well perform all acts that bodies corporate perform by law2.
A viable way out of the persisting problem of the power sector is the complete policy embracement and effective implementation of renewable energy as available alternative in addition to the conventional power source in Nigeria. NERC has as one of its directive to encourage electricity generation in Nigeria through conventional and renewable sources. Conventional energy sources are not sustainable in the long run being perishable and non- renewable. Renewable energy constitutes one of the means of attaining the aim of decentralized energy alternatives. However in Nigeria, no similar policy is put in place, although the National Energy Policy advocates and encourages renewable energy sources, but this is yet to translate into a national priority. Provision of renewable energy or alternatives is important to the provision of low cost, affordable and regular electricity in Nigeria3.
The aim of the National Energy Policy was to facilitate adequate sustainable and reliable power supply of energy at suitable costs and in an environmentally friendly manner, it also was to facilitate provision of alternative energy sources. The policy frame work also captured initiatives aimed at encouraging the use of sustainable and safe energy. The NERC was assigned the responsibility to promote the generation of electricity through renewable sources by making available, suitable commercial and technical measures for connectivity to the grid and sale of electricity to individuals. The renewable energy sources captured in the policy guidelines on renewable electricity in Nigeria are solar biomass and wind4.
1 Onyi-Ogelle, Helen Obioma. The Implications of Legal Reform in the Nigeria Power Sector, An International Multidisciplinary Journal, Ethiopia, Vol. 10(3), Serial No.42, (2016): pp. 282
2 Electric Power Sector Reform (EPSR) Act 2005 Cap E7. (Revised Laws of the Federation of Nigeria (LFN) 2004
3 Onyi-Ogelle, Helen Obioma. The Implications of Legal Reform in the Nigeria Power Sector, An International Multidisciplinary Journal, Ethiopia, Vol. 10(3), Serial No.42, (2016): pp. 282
4 Policy Guidelines on renewable electricity in Nigeria, December 2006,