Nigeria Sets Electricity Sales to Niger Republic, Togo, Burkina Faso, and Benin Republic at 6% for Six Months

The Nigerian Electricity Regulatory Commission (NERC) recently released this directive to the System Operator (SO), a division within the Transmission Company of Nigeria (TCN).

The Nigerian government has issued an order capping electricity sales to Niger Republic, Benin Republic, and Togo at 6%.

Nigeria currently exports electricity to Togo, Burkina Faso, Republic of Benin, and Niger Republic.

The Nigerian Electricity Regulatory Commission (NERC) recently released this directive to the System Operator (SO), a division within the Transmission Company of Nigeria (TCN).

The order, signed by NERC Chairman **Sanusi Garba and Vice Chairman **Musiliu Oseni**, was published on April 29, 2024, and took effect from May 1, 2024**.

This measure will be in place for an initial period of six months, with the possibility of extension as determined by the commission.

The NERC issued this order in accordance with Section 116 of the Electricity Act (“EA”) 2023**. It aligns with the April Supplementary MYTO-2024 Tariff Order, which aims to enhance electricity supply and financial sustainability within the Nigerian Electricity Supply Industry (NESI) as the industry transitions toward cost-reflective levels.

The order serves as an interim guideline for the SO and TCN, ensuring the implementation of Standard Operating Procedures (SOPs) and other operational support tools. These measures aim to enhance transparency and fairness in grid operations, ultimately benefiting all transmission system customers.

Additionally, the order places interim capacity limits on electricity supplied to international customers. This minimizes the impact on domestic supply obligations by Generation Companies (GenCos) and mitigates overall risks to the Nigerian Electricity Market, even during periods of limited generation capacity.

Key provisions of the order include:

1. Pro-Rata Load-Shedding Scheme: The SO must develop and present a load-shedding scheme to the commission within seven days. This scheme ensures equitable load allocation adjustments for off-takers, Distribution Companies (DisCos), international customers, and eligible customers during drops in generation or other grid imbalances.

2. Hourly Readings and Sanctions: The SO will implement a framework for logging and publishing hourly readings. Necessary sanctions will be enforced for violations of grid instructions and contracted nominations by off-takers, in line with the Grid Code and Market Rules.

3. Maximum Load Allocation: International off-takers' maximum load allocation in each trading hour shall not exceed 6% of the total available grid generation.

4. Capacity Nominations: Generating plants can nominate a capacity for international off-takers, up to 10% of their available generation capacity, unless exceptional circumstances warrant a derogation approved by the commission.

5. Recognition of Capacity Additions: The SO will no longer recognize capacity additions in bilateral transactions between generators and off-takers (international off-takers, DisCos, IEDN, EC) without express commission approval.

6. Reporting Requirements: The SO and Market Operator must file a schedule and copies of all bilateral contracts (local and international) administered through the grid. This includes relevant regulatory approvals.

7. IoT Meters and Data Acquisition: The SO and TCN will install integrated IoT meters at off-take and delivery points. Real-time visibility of aggregate off-take by grid customers will be ensured. The installation and data streaming should be completed within three months from the order date.

8. Condition Precedent for New Transactions: IoT meters and data acquisition are mandatory for any new transaction involving electricity supply through the national grid.

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