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🇳🇬 Nigeria /Energy & Infrastructure

FG plans rival power firms to compete with Discos

From The Punch · () English

Summarized and contextualized by DistantNews.

At a glance

News Named sources New plan
  • Nigeria's Rural Electrification Agency plans to establish Renewable Energy Service Companies (RESCOs) to compete with electricity distribution companies.
  • These RESCOs will build and operate utility-scale renewable energy networks, offering an alternative to the national grid.
  • The initiative aims to tackle persistent blackouts and expand electricity access across the country over the next 10 to 15 years.

Nigeria's Federal Government, through the Rural Electrification Agency (REA), is set to introduce Renewable Energy Service Companies (RESCOs) designed to directly compete with existing electricity distribution companies (DisCos).

We at REA are developing something called the RESCOs, Renewable Energy Service Companies that will rival the DisCos in the next 10 to 15 years.

— Abba AliyuExplaining the REA's plan to introduce RESCOs as competitors to electricity distribution companies.

This strategic shift, planned over the next 10 to 15 years, aims to address persistent blackouts and broaden electricity access nationwide. Abba Aliyu, Managing Director of REA, explained that the agency is moving beyond supporting isolated mini-grid projects. Instead, it will encourage developers to build extensive, interconnected renewable energy networks capable of serving entire communities independently of the national grid.

These RESCOs will offer consumers a reliable alternative by providing 24/7 clean energy, primarily powered by solar energy and battery storage. "We at REA are developing something called the RESCOs, Renewable Energy Service Companies that will rival the DisCos in the next 10 to 15 years," stated Aliyu, represented by Gboyega Ayoade, Executive Director of Corporate Services at REA.

Instead of us encouraging a developer to come in and build one mini-grid in this area and say, okay, I have a mini-grid, no; we’re encouraging developers now to build utility-scale mini-grids so one developer can own the entire community and build about 20 mini-grids to 50 mini-grids.

— Abba AliyuDescribing the scale of the proposed renewable energy projects.

Aliyu argued that Nigeria cannot solely depend on the DisCos, many of whom do not serve certain communities because it is not commercially viable. He highlighted that renewable energy mini-grids offer a more dependable solution, provided operators maintain battery systems effectively. Agreements are already being forged between mini-grid developers and DisCos in areas where the latter have minimal or no presence, signaling a significant transformation in Nigeria's energy landscape.

We think that we can’t leave everything in the hands of the DisCos. In some areas, they don’t even provide services. If you go to some communities, they’ll tell you that a DisCo does not provide power for them because they’re not making more money from that or because they don’t have the right feeders or functioning feeders in those areas.

— Abba AliyuJustifying the need for alternative electricity providers due to the shortcomings of existing distribution companies.
DistantNews Editorial

Originally published by The Punch. Summarized and contextualized by our editorial team with added local perspective. Read our editorial standards.

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