The Nigerian Bulk Electricity Trading Plc (NBET) is set to exit the electricity market as the Nigerian Electricity Regulatory Commission (NERC) issues licenses to multiple firms. These firms will be responsible for buying and selling electricity in bulk from power generation companies (GenCos).
This change is outlined in an order signed by NERC Chairman Sanusi Garba and Dafe Akpeneye, the Commissioner for Legal, Licensing, and Compliance, on Sunday in Abuja. The directive took effect on July 25.
According to the order, NBET will immediately stop entering into new contracts for the purchase and resale of electricity and ancillary services in the Nigerian Electricity Supply Industry (NESI).
Under this new order, electricity distribution companies (DisCos) are now allowed to purchase electricity directly from generation companies (GenCos) without NBET serving as an intermediary. NERC also stated that any contracts executed by NBET in violation of this order will not be approved and will be considered an infraction subject to regulatory sanctions.
It said: ”NBET shall, in the interim, continue to administer the fully effective contracts with the five Generation Companies (GenCos): Azura Power West Africa Ltd., Omotosho Power PLC, Olorunsogo Power PLC, Nigerian Agip Oil Company Ltd., and Shell Petroleum Development Company of Nigeria Ltd.
”Based on the minimum “take or pay” capacities contained in their respective Power Purchase Agreements (PPAs),” it said.
The order stated that the capacity from the five plants will be allocated to electricity distribution companies (DisCos) based on the guaranteed share of capacity outlined in their respective vesting contracts.
The Electricity Power Sector Reform Act (EPSRA) established NBET to temporarily address the sector’s financial challenges by buying and selling electricity in bulk from power producers. NBET was licensed as a bulk trader by the commission on August 23, 2011. The license had a tenure of 10 years and was subject to renewal at the commission’s discretion.
