One year after President Bola Tinubu signed the Electricity Act into law, energy experts have praised the legislation’s impact on the power sector, citing increased competition and investment in the industry.

This was the conclusion of Nextier’s 95th Power Dialogue, hosted by the Electricity Hub on Thursday, in Abuja.

According to the experts, the Act has created a more dynamic and competitive electricity market, although further efforts are needed to overcome existing barriers and fully realize its potential.

Accordibg to a statement on Friday, the Power Dialogue session was moderated by Atiku Jafar, a partner at Bowyard Partners, and featured a panel of experts, including Dafe Akpeneye, Commissioner for Legal Licensing and Compliance at the Nigerian Electricity Regulatory Commission; Osefan Anegbe, Associate at the Energy and Natural Resources practice of Streamsowers and Kohn; and Damilola Alada, Executive Associate at Bloomfield Law Practice.

During the dialogue, Jafar noted that the President signed the ambitious Electricity Act into law on June 8, 2023, and it re-enacted the 2005 Electricity Power Reform Act, introducing a new legal and institutional framework for Nigeria’s electricity supply industry.

Akpeneye outlined the power sector’s evolution from pre-privatisation through enacting the 2005 Electric Power Sector Reform Act to the present Electricity Act, noting that while the sector still faces challenges, the Act is promising.

“A significant improvement is that it empowers regulators to assert their responsibilities, stabilising the market and enhancing efficiency,” stressed Akpeneye

He also emphasised the need for a unified legislative framework as investor concerns are more focused on political and governmental risks than regulations.

Anegbe stated that the Electricity Act mandates the Ministry of Power to develop an integrated national electricity policy and strategy covering various energy sources, including gas, nuclear, coal, and renewables. She identified policy inconsistency as a barrier to investment in the power sector and stressed the need to diversify energy sources.

She also emphasised the importance of states attracting and retaining investors by providing incentives for renewable energy products, offering human capital development opportunities, and ensuring access to land for power sector investments.

Alada pointed out that addressing transmission and distribution constraints is crucial, as the electricity sector operates as a value chain. Key steps include increasing generation capacity by leveraging diverse fuel sources and improving distribution systems.

She highlighted the state’s ability under the new Electricity Act to generate power based on local fuel sources. Addressing distribution challenges, such as metering, technology use, and energy theft enforcement, is essential.

Alada further noted that state governments could attract investment by conducting market feasibility studies, implementing business-friendly laws, and collaborating with local and federal governments.

The Electricity Act aims to decentralise electricity to state players, promote renewable energy adoption, separate distribution and electricity trading roles, and unbundle the Transmission Company of Nigeria.