A Review of the Nigerian Energy Industry

Energy economists harp on efficient regulatory framework for NESI

power_transformer30 January 2014, Lagos – The success of Nigeria’s power sector privatisation is hugely dependent on the continued efficiency of a regulatory framework extensively overseen by the Nigerian Electricity Regulatoty Commission (NERC), President of the Nigerian Association for Energy economics (NAEE), Prof. Adeola Adenikinju has said.

Adenikinju who spoke recently in Abuja while disclosing plans for the 7th conference of the NAEE and its global counterpart, the International Association for Energy Economics (IAEE) explained that only an independent and efficient regulator is capable of ensuring that the progress of the power sector reform was firmly pursued in line with extant principles to guard against derailment in set objectives.

Flanked by the president of IAEE, Prof. Wumi Iledare, the expert warned that unless the regulator remained transparent and efficient in undertaking its responsibilities, the privatisation exercise would simply amount to transfer of management of the sector from state monopoly to private sector monopoly with no visible results achieved.

He urged the regulator to avoid being captured by industry stakeholders, but to have a firm grasp of the sector in order to check activities of the utilities mostly with a view to ensuring equitable energy access to all Nigerians irrespective of their various residences.

Adenikinju explained that the 2014 NAEE/IAEE conference, with the theme “Energy Access and Economic Development: Policies, Institutional Framework and Strategic Options,” scheduled to hold from  February 16 to 18 in Abuja, will deliver about 90 papers, focusing on international best practice in energy economics across the world and how such can be domesticated in Nigeria.

“Privatisation will produce results in the long term if a very strong regulator is put in place, this is very critical. The regulator must be capable, transparent and must guide against being captured by the stakeholders because if you don’t do that you will simply be replacing state monopoly with private monopoly.

“If we are not careful in the initial period of privatisation, when there is low generation the companies may start to discriminate and supply rich neighbourhood. I advise the regulator to ensure that the market operator are encouraged or compelled to ensure there is equity in terms of access to electricity both in rural and urban areas,” Adenikinju said.

He further emphasised that energy access was the bedrock for sustained development and pointed out the only difference between developed and developing countries was the quality of energy available to people in either divide.

He added: “We deem it fit to enlighten policy makers that the transformation agenda of the current administration cannot be attained if we do not broaden access to electricity. Energy access is critical to reducing poverty and unemployment in a massive scale. The conference will look at international best practices across the world. They will focus on policies; institutions and legal framework that will enable policies achieve the objective of energy access.”

They however called for a review of the Electric Sector Power Reform (EPSR) Act to reflect current realities in the sector, adding that the law is almost 10 years old and has lost touch with events in the global power sector.


– Chineme Pkafor, This Day

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