From David Onuoja, Abuja
The Nigerian Electricity Regulatory Commission (NERC), has removed the Nigerian Bulk Electricity Trading Plc (NBET), from the electricity market and set to involve multiple firms that will buy and sell electricity in bulk from the power generators.
Chairman of the Commission, Engr. Sanusi Garba, and Commissioner, Legal, Licensing and Compliance, Dafe Akpeneye, who gave the order at the weekend said, “NBET is removed from contracting the purchase and resale of electricity and ancillary services in Nigerian Electricity Supply Industry (NESI).
In a press statement released in Abuja, NERC said, any contract executed by NBET in violation of this order, shall not be approved by the Commission and shall be treated as an infraction that is subject to regulatory sanction.
The Commission said, NBET shall, in the interim, continue to administer the fully effective contracts with five Generation Companies (GenCos): Azura Power West Africa Ltd, Omotosho Power PLC, Olorunsogo Power PLC, Nigerian Agip Oil Company Ltd, and Shell Petroleum Development Company of Nigeria Ltd. based on the minimum “take or pay” capacities contained in their respective Power Purchase Agreements (PPAs).
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NERC equally cut NBET energy trading to five GenCos as other traders emerge.
It said that, the capacity of the five plants shall be vested to Distribution Companies (DisCos), based on the guaranteed share of capacity contained in their respective vesting contracts.
Recall that the Electricity Power Sector Reform Act (EPSRA), created NBET to buy and sell electricity in bulk from power producers. NBET was meant to help with the sector’s financial problems temporarily.
NBET was licensed as a bulk trader by the Commission on August 23, 2011. The licence issued to NBET had a tenure of ten years and subject to renewal as may be determined by the Commission.
Following stakeholder engagements on NBET’s continued role in NESI, the Commission renewed the initial ten – year licence issued to NBET upon expiration in August 2021 but for a term of 3 years, noting that the continued role of the NBET in the market has been a disincentive for the transition to bilateral contracting between DisCos and GenCos thus exposing the FGN to the risk of revenue shortfalls beyond tariff support.
The Commission had, since 2022, issued trading licences to ten private companies that have indicated interest in trading electricity bilaterally with DisCos and eligible customers.
It further received requests for regulatory approval from some of the aspirational DisCos for the purchase of electricity from parties other than NBET.
The interest in electricity trading so far indicates that there is significant potential in the wholesale trade of electricity outside the NBET single buyer pool.
