Ekiti State Pioneers Off-Grid Energy Independence: Licenses Issued to Power Distribution and Generation Companies

The chronic electricity challenges in Ekiti State, South West Nigeria, needed a solution.

The state government took a decisive step towards achieving energy independence.

Governor Biodun Oyebanji recently announced the issuance of licenses to various energy sector investors.

This marks a significant shift towards a sustainable, off-grid electricity supply system. It aims to reduce the state’s reliance on the national grid.

A Strategic Energy Transition

Governor Oyebanji revealed that the state had granted licenses to a total of 14 entities.

He shared this in a statement on his official X (formerly Twitter) account on Thursday.

These licenses include approvals for three electricity distribution companies (DisCos), four generation companies (GenCos), and two mini-grid generation companies.

Additionally, five-meter asset providers have been licensed to support precise and efficient electricity metering throughout the state.

This comprehensive initiative is part of Ekiti’s ambitious plan.

The plan aims to bolster local power generation. It also seeks to optimize distribution networks.

The goal is to ensure reliable energy access for its residents.

This move aims to generate and distribute a total of 130 megawatts (MW) of electricity.

This will significantly expand the state’s capacity beyond the current supply from the national grid.

Governor Oyebanji’s Vision for Energy Independence

Governor Oyebanji expressed his optimism about the state’s journey toward energy autonomy. In his announcement, he stated:

“I am delighted to inform the people of Ekiti State about the strides we are making towards achieving energy self-sufficiency. We have issued operational licenses to 14 electricity investors, encompassing:

• 3 distribution companies,
• 4 generation companies,
• 2 mini-grid operators, and
• 5-meter asset providers.

This strategic initiative is designed to enhance local power generation, streamline distribution channels, and provide reliable metering services for our residents”

Governor Oyebanji highlighted that Ekiti State currently receives only about 20 to 25 MW from the national grid. This amount is far below the state’s estimated requirement of 120 MW.

By implementing this new off-grid model, Ekiti aims to generate up to 130 MW of electricity. This will reduce dependency on the unstable national supply. It also fosters a more sustainable, locally managed energy framework.

Aligning with the 2023 Electricity Law

The issuance of these licenses directly aligns with the recently enacted 2023 Electricity Law. This law empowers Nigerian states to control their own energy production and distribution.

This law decentralizes the power sector. It allows states to issue licenses to private entities for generating and distributing electricity within their territories.

Governor Oyebanji emphasized the significance of leveraging the provisions of the 2023 Electricity Law to address Ekiti’s energy needs. According to him:

“This initiative aligns seamlessly with the 2023 Electricity Law Enactments, which decentralize the electricity market, thereby granting states the autonomy to license operators and meet local energy demands more effectively. Our goal is to create a self-reliant energy sector that not only meets the needs of our people but also encourages economic growth.”

Background of the 2023 Electricity Act

To understand the broader context of Ekiti’s initiative, we must revisit the framework. This framework was established by the 2023 Electricity Act.

President Bola Ahmed Tinubu signed this act into law earlier this year. It replaced the outdated Electricity and Power Sector Reform Act of 2005.

The new legislation is a game-changer, aimed at dismantling the federal monopoly over electricity generation, transmission, and distribution.

The primary objectives of the 2023 Electricity Act include:

1. Decentralizing Power Generation: It allows states, private companies, and individuals to generate electricity independently. They can distribute electricity independently as long as their operations are confined within state borders.
2. Empowering States: The law permits states to issue licenses. This encourages the establishment of state-controlled mini-grids and power plants. It fosters localized energy solutions.
3. Fostering Transparency and Efficiency: The Act has undergone amendments to promote greater transparency in the power sector. These amendments enhance efficiency. They also encourage private investments.

A New Dawn for Ekiti’s Electricity Market

The governor’s announcement comes at a critical time. Nigeria’s national grid is struggling with frequent disruptions. These disruptions leave millions of citizens without stable power.

Ekiti’s proactive measures are anticipated to set an example. Other states looking to harness localized power generation benefits may follow this model.

Ekiti State plans to develop a robust energy sector by capitalizing on the provisions of the 2023 Electricity Law. This sector will meet its current needs and lay the foundation for future growth.

This strategy aims to attract investments in renewable energy, foster job creation, and stimulate economic activities within the state.

The Road Ahead

Ekiti’s initiative to grant licenses to diverse players in the electricity market signals a major shift towards energy self-reliance. The state’s focus is on off-grid solutions.

It includes investments in mini-grids and meter asset providers. These efforts are poised to transform the electricity landscape for residents.

If successful, Ekiti’s approach will pave the way for other Nigerian states. They can adopt similar frameworks. This will ultimately reduce the country’s dependence on the unreliable national grid.

With the implementation of these licenses, Ekiti State is addressing immediate power shortages. The state is also positioning itself as a leader in the quest for sustainable energy solutions in Nigeria.

The state’s bold step is towards decentralizing its electricity supply. This highlights the importance of leveraging legislative frameworks. These frameworks drive local economic development and ensure energy security.

As more states explore the potential of off-grid power systems, Nigeria could see a shift toward more resilient energy infrastructure. This infrastructure would be more efficient and sustainable.