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NERC outlines electricity licensing and permits under Electricity Act 




The Nigerian Electricity Regulatory Commission (NERC) has outlined several licenses and permits under the 2023 Electricity Act. According to the Commission, these licenses are to be issued for various activities that generate 1 megawatt (MW) and below or an electricity distribution network of 100 kilowatts (KW) and below.  

The licenses include: 

Generation License 

This allows the construction, operation, ownership and maintenance of generation stations, and supply of electricity.  

Transmission License 

Supply License 

Distribution License  

This allows the construction, operation and maintenance of a distribution system, and delivers electricity to consumers. 

Trading License 

Permits the licensee to engage in the purchasing, selling and trading of electricity. 

System Operation License 

This authorizes the operation of one or more transmission systems. 

Manages generation scheduling, commitment and dispatch. 

Administration of the wholesale electricity market and settlement payments. 

Permits and Authorizations 

Eligible Customer: can purchase power from a licensee other than a distribution licensee.  

Mini-Grid: Electricity supply system with its own generation capacity not exceeding 1MW.  

Captive Power Generation Permit: Generation of electricity exceeding 1 MW for self-consumption.  

Meter Asset Provider (MAP): Entities approved by the Commission to provide metering services with roles that may include financing, procurement, supply, installation, maintenance and replacement.  

Meter Service Provider (MSP): They are people certified by the Commission as manufacturers, suppliers, vendors or installers of electric energy meters and/or metering systems. 

The licensing rules under the 2023 Electricity Act are expected to provide a background for the promotion of embedded power generation, hybridized generation, co-generation and the generation of electricity from renewable sources such as solar energy, wind, small hydropower, biomass and other renewable sources. 

The Act will also help to address post-privatization issues in Nigeria’s electricity sector. It will strengthen the regulatory structure in the sector. It will also address issues of bankruptcy within the distribution companies (DisCos).