Since 2011, the Nigerian Bulk Electricity Trading PLC (NBET) has played a critical role in the Nigerian Electricity Supply Industry (NESI) by being the sole bulk trader of electricity. As envisaged under the repealed Electric Power Sector Reform Act 2005 and the extant Electricity Act 2023, NBET’s role in the NESI was designed to be temporary and to subsist until the electricity market achieved a more competitive state which will support a bilateral trading model. To achieve this model, the Nigerian Electricity Regulatory Commission (NERC), on 25 July 2024, issued the “Order on the Transition to Bilateral Trading in the Nigerian Electricity Supply Industry” (the Order).
In this newsletter, we critically examine the provisions of this pivotal Order and key considerations for its successful implementation by NERC. We also highlight the implications of the Order for industry participants in different segments of the electricity value chain in the context of the current NESI structure and broader market and economic realities.
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