PricewaterhouseCoopers (PwC) has issued a warning to the states in Nigeria, advising them to approach the implementation of the Electricity Act with caution and careful planning in order to prevent disruptions to the power system.
PwC Nigeria’s partner and finance advisory leader, Bimbola Banjo, disclosed this information during the 14th edition of the company’s annual power and utilities roundtable, which was centred around the topic of “The Electricity Act 2023: Powering Nigeria.”
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Implications of the Technology
Banjo issued a warning that the implementation of this technology will result in significant financial constraints for states due to the large initial expenses associated with purchasing it.
“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The Electricity and Power Sector Reform Act of 2005 is repealed by the new electricity law, which also consolidates the laws that pertain to the Nigerian Electricity Supply Industry (NESI).
In July of 2022, the Senate approved the power bill in an effort to address the issues faced by the sector.
As a consequence of this, the constitutional ability to adopt laws that enable states to create, distribute, and transport electricity inside their borders has been granted to the states. This includes territories that were previously only covered by the national system.
Viewpoints from PwC’s partner
Pedro Omontuemhen, a partner at PwC Nigeria and a leader in the energy, utilities, and resources sector, emphasised the significance of this year’s roundtable theme. He highlighted the potential of the Electricity Act to address a variety of difficulties that are currently being 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, the discussions that took place at the roundtable have demonstrated that stakeholders in the power sector think the Electricity Act is a positive step, particularly for the purpose of consolidating the laws that govern the Nigerian electricity supply industry and establishing a policy framework that gives state governments and investors more power.
According to him, however, there is still more work to be done in order to improve the legislation and make it more sensitive to the realities that are faced by industry practitioners.
With this in mind, he proposed that it is of the utmost importance for the Act to establish the policy framework that is required in order to put into action solutions that are practical in nature in order to address the metering gap.
The panel session was moderated by Akinyemi Akingbade, a partner at PwC Nigeria who specializes in energy, utilities, and resources. Akinyemi Akingbade explained that there is a need to consider the role that the Electricity Act can play in fostering domestic investments within Nigeria’s power value chain and stimulating local manufacturing of electricity assets such as meters.