Lagos — RMI and Abuja Electricity Distribution Company, AEDC, have found a new business model that can enable distribution companies, DisCos, and distributed energy resource, DER, developers to supply clean energy to large commercial and industrial customers through collaboration.
Their report, ‘Improving Electricity Supply for Large Customers in Nigeria’, showed that the model could quickly improve electricity supply and sectoral viability for the C&I sector, which is crucial to Nigeria’s economy, enabling financial savings, reducing risk and drastically reducing CO2 emissions.
Industrialization is growing in many sub-Saharan African countries. However, large C&I customers continue to be hampered by unreliable electricity supply.
Inadequate and expensive electricity provision is reported to increase costs, disrupt production and reduce profitability. Consequently, most large C&I customers have resorted to fossil fuel-powered self-generation.
RMI Nigeria program director, Mr. Suleiman Babamanu said: “By fostering collaboration between DisCos and DER developers, this innovative business model enables ‘win-win-win’ opportunities by reducing costs for large C&I customers, improving DisCos’ revenues and providing DER developers with access to a larger pool of customers.
“We believe that this will accelerate the growth of the C&I solar market in Nigeria and make reliable electricity supply more efficient and affordable for a wider range of C&I customers.”
The head financial performance management of AEDC, Mr. Collins Chukwuma Obi also disclosed this, “Innovative business models of this nature will help AEDC improve its operating revenue, reduce technical, commercial, and collection losses whilst ensuring security of supply to increasing number of customers requiring reliable power for their homes and businesses.”
The report includes template contract documents to provide a starting point for collaborative project development. These include:
· A generic request for proposal, RFP, to enable DisCos and their large C&I customers to jointly procure a qualified DER developer
· A generic tripartite agreement to stipulate the contract terms among the DER developer, the DisCo, and the customer throughout the installation, operation and maintenance of the project
· A scoring matrix to assist in evaluating proposals received in response to the RFP
Although this model holds great promise for improving power supply in Nigeria, demonstration is needed. There is a clear opportunity for innovation and collaboration across the sector, where stakeholders — including DisCos, developers, policymakers, investors and development partners — can share insights from these pilot projects to refine and scale implementation.
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