The Nigerian Electricity Regulatory Commission (NERC) has ordered electricity Distribution Companies (Discos) to procure a minimum of 398MW of embedded generation to enhance the reliability of power supply across the country.
Embedded generation, also known as distributed generation, refers to power generated by smaller plants connected to local distribution networks, rather than the national grid or main transmission network. This move aims to address power supply challenges and improve electricity delivery to consumers.
The directive is outlined in NERC’s September 2024 Supplementary Order to the Multi-Year Tariff Order (MYTO) 2024, which mandates the 11 Discos operating in Nigeria to secure 10% of their annual load allocation from embedded generation sources. The initiative is expected to boost energy availability and ensure more stable power supply.
For instance, Kano Electricity Distribution Company (Disco) has been instructed to procure at least 27MW of embedded generation, representing 10% of its 2024 load allocation. Of this capacity, a minimum of 50%—14MW—must come from renewable energy sources. Similar requirements have been set for other Discos, including:
- Port Harcourt Electricity Distribution Company (28MW)
- Yola Electricity Distribution Company (11MW)
- Abuja Electricity Distribution Company (61MW)
- Jos Electricity Distribution Company (22MW)
- Ikeja Electricity Distribution Company (60MW)
- Ibadan Electricity Distribution Company (48MW)
- Eko Electricity Distribution Company (51MW)
- Enugu Electricity Distribution Company (31MW)
- Benin Electricity Distribution Company (33MW)
- Kaduna Electricity Distribution Company (26MW)
NERC’s directive is seen as a critical step towards resolving the country’s persistent power shortages and improving the quality of service provided by Discos under the Service-Based Tariff (SBT) regime. The commission emphasized that a portion of the new power generation capacity should come from renewable sources to promote sustainability in the energy sector.
