PricewaterhouseCoopers (PwC) has cautioned Nigerian states to approach the implementation of the Electricity Act with caution and careful planning to avoid disruptions to the power system.
Bimbola Banjo, partner and finance advisory leader, PwC Nigeria, made this known at the firm’s 14th edition of annual power and utilities roundtable, with the theme “The Electricity Act 2023: Powering Nigeria.”
Banjo cautioned that the adoption of this technology would come with substantial financial burdens for states due to its high upfront costs.
“While there is an urgency to adopt the Electricity Act, states must exercise caution and assess their readiness for implementation,” he said.
“The process of adoption will incur significant costs, including engaging legal and commercial advisors, and will require substantial investments in technology, human resources, and the establishment of state-level structures.
“Before proceeding, states should conduct a comprehensive evaluation of their electricity market and network infrastructure, accompanied by detailed technical and commercial feasibility studies.
“This rigorous assessment will ensure that states are adequately prepared to implement the Electricity Act effectively and reap its full benefits.”
The new electricity law repeals the Electricity and Power Sector Reform Act of 2005 and consolidates the laws relating to the Nigerian Electricity Supply Industry (NESI).
The senate passed the electricity bill in July 2022 to solve the sector’s challenges.
Consequently, states have been granted constitutional authority to enact laws that allow them to generate, distribute, and transport electricity within their boundaries, including territories formerly covered only by the national grid.
Pedro Omontuemhen, partner and energy, utilities and resources leader at PwC Nigeria, emphasised the significance of this year’s roundtable theme, highlighting the Electricity Act’s potential to address numerous challenges faced by the sector.
“The 2023 power roundtable’s timing coincides with the ongoing COP 28 in Dubai, highlighting the urgent need for continued action on climate change especially in the area of renewable energy,” Pedro said.
“The Electricity Act can play a pivotal role in addressing this challenge by providing guidance on balancing the utilisation of our natural resources with the reduction of carbon emissions while showing how we can generate, transmit, and distribute adequate power to meet Nigeria’s energy needs.”
According to him, discussions at the roundtable have shown that power sector stakeholders welcome the Electricity Act as a good step, especially for consolidating the laws governing the Nigerian electricity supply industry and establishing a policy framework that empowers state governments and investors.
He. however, said there is more to be done to enhance the legislation and make it more responsive to the realities of industry practitioners.
In this regard, he suggested that it is crucial for the Act to provide the policy framework necessary to implement practical solutions to address the metering gap.
Akinyemi Akingbade, partner, energy, utilities and resources, PwC Nigeria, who moderated the panel session, explained that there is a need to consider the role the Electricity Act can play in stimulating local manufacturing of electricity assets, such as meters, and fostering domestic investments within Nigeria’s power value chain.
The panel session includes Razaq Obe, Ondo state commissioner for energy and mineral resources; Folake Soetan, chief executive officer, Ikeja Electric Plc; Ugochukwu Obi-Chukwu – founder/CEO, Nairametrics.
Dafe C. Akpeneye, commissioner legal, licensing and compliance, Nigerian Electricity Regulatory Commission; and Daniel Mueller, chief operating officer, InfraCredit, were also on the panel.