Nigeria's Power Regulator Opens the Door for Independent Power Generation and Distribution

---

Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--The Nigerian government has been making a sustained effort to open the door wide for independent power producers to enter the market. The Nigerian Electricity Regulatory Commission (NERC) has now signed off on regulations for two critical license types to allow independents to generate and distribute electrical power. The regulations present a clear legal and regulatory framework specifically for embedded generation and an independent electricity distribution network.

The embedded generation license allows the generation of electricity that is directly connected to and evacuated through a distribution system that is connected to a transmission network operated by a system operations licensee. The independent electricity distribution network license allows for a distribution network to be within the operational area of a distribution network that is owned and operated by a licensed successor distribution company.

NERC chairman Sam Amadi said that state governments, and even individuals, could no longer complain of being shut out of the power generation market.

"With this regulation, we can actually allow distribution companies to contract power around themselves, thereby increasing power supply, and to reduce losses and address issues of stability," he said.

The chairman maintained that the regulations were important for states that were concerned with rural electrification, pointing out that a significant part of the country was yet to be connected to the grid.

For related information, see February 29, 2012, article - Nigeria Stalls Again on Power Privatization Plan, and February 22, 2012, article - GE's Immelt Leads Charge as U.S. Initiates Major Investments in Nigeria.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.