Mr Uche Val Obi SAN, Dr. Ngozi Chinwa Ole and Omoerere Erhuen1

Introduction:

Electricity access remains a crucial challenge in Nigeria, considerably impacting the country's economic development, education, healthcare, and overall quality of life. Despite being Africa's most populous nation with over 200 million people and laden with significant energy resources, the country still faces persistent issues related to electricity generation, distribution, and accessibility. It is estimated that roughly 90 million people were without electricity in 2023, 2 the highest deficit in Africa. This is the result of increased population, poor infrastructure, and insufficient generation capacity to meet the growing demands of citizens. The national power grid, which links electricity generation stations with electrical loads across the country, is hampered by inefficiencies and constrained by infrastructure limitations. The grid, which has collapsed on numerous occasions, plunging the country into darkness, struggles to reach remote and underserved areas. Electricity, which contributes significantly to a country's economic growth and development has a very deplorable supply rate in Nigeria, adversely affecting businesses. According to a report by the World Bank, Nigerian businesses lose an estimated $29 billion annually due to unreliable electricity. 3 To effectively address this issue of abysmal electricity supply, mini-grids have emerged as a potential catalyst, offering improved and reliable power supply, and providing decentralized and sustainable solutions to the country's electricity crisis. The core of this article is to highlight the role of mini-grids in solving these electricity problems and examine the existing legal framework for the establishment of mini-grids in Nigeria.

Mini-Grids: A Catalyst for Improved Electricity Access:

Essentially, mini-grids are decentralized electricity generation and distribution systems that serve specific groups of consumers. Unlike the centralized national power grid that transmits electricity over long distances, mini-grids are designed to provide electricity to specific groups, especially in areas where it may be challenging or economically tasking to connect to the national grid. Section 3 of the Mini-Grid Regulations, 2023, defines Mini-Grid as any electricity supply system with its generation capacity, supplying electricity to more than one customer, and which can either operate in isolation from a Distribution Licensee's network or be connected to the network. Mini-grids have also been described as small-scale electricity generators and possibly energy storage systems interconnected to a distribution network that supplies electricity to a small, localized group of customers, operates independently of the national transmission grid, and ranges from a few kilowatts up to 10 megawatts in size. 4 From the provisions of the Mini-Grid Regulations, 2023 it can be deduced that there are essentially two (2) major categories of mini-grids in Nigeria, namely interconnected mini-grids, and isolated mini-grids. 5 An interconnected mini-grid is connected to the network of a Distribution Licensee while an isolated mini-grid is not connected to a Distribution Licensee network. 6 While an interconnected mini-grid utilizes the existing infrastructure of an electricity distribution company to transmit power, an isolated mini-grid establishes its distribution infrastructure. Additionally, the Regulations also allude to another set of mini-grids known as portfolios. A portfolio of isolated mini-grids connotes a set of isolated mini-grids as determined by the mini-grid developer, which is filed with the Commission for approval simultaneously. 7 Conversely, a portfolio of interconnected mini-grids means a set of interconnected mini-grids as determined by the mini-grid developer, for which tripartite agreements with the same Distribution Licensee have been signed and filed simultaneously with the Commission for approval. 8

Mini-grids have been identified as a viable solution to Nigeria's electricity crisis owing to the numerous advantages they offer over the national grid, especially for rural, unserved, and underserved areas, as over 76% of people living in these areas have zero access to electricity. 9 Mini-grids can help enhance electricity in rural and unserved areas, as well as improve livelihoods, boost economic activities, generate employment, and improve overall quality of life. They are reliable and more affordable, and power outages are less likely to be recorded with mini-grids than with the conventional national grid system, which distributes power over long distances. Minigrids can be operated by the government, private individuals, businesses, communities, and different stakeholders through Private and Public Partnerships. This decentralized nature of minigrids indeed presents an opportunity for electrification through diversification and for Nigeria to address its electricity access crisis. Unlike the conventional national power grid system, mini-grids can be deployed in areas where extending the national grid is unfeasible and economically impracticable. Mini-grids are the solution to Nigeria's electricity crisis. Although Nigeria has commenced exploring the use of mini-grids as part of its efforts to address electricity access challenges, especially in rural, unserved, and underserved areas through the Nigeria Electrification Project ("NEP") Initiative, 10 more concerted efforts are necessary to scale up these initiatives, overcome the barriers associated with mini-grid installation, such as funding constraints, and ensure sustainable and reliable electricity across the nation.

Legal Framework for Mini-Grids in Nigeria:

An efficient legal framework that is clear and well-defined for mini-grids in Nigeria is pertinent for several reasons, as it is crucial in shaping the development, use, and sustainability of decentralized electricity distribution systems such as mini-grids. A clearly defined legal framework will give investors confidence, making mini-grids more attractive for investors to commit their resources to. This will ultimately lead to the development of more mini-grids and accelerate the pace of electrification through mini-grids. In Nigeria, mini-grids are primarily regulated by the Electricity Act of 2023 and the Mini-Grid Regulations, of 2023 made pursuant thereto.

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Footnotes

1. Mr Uche Val Obi SAN, Dr. Ngozi Chinwa Ole and Omoerere Erhuen are Managing Partner, Consultant-Managing Associate and Associate respectively at Alliance Law Firm, Nigeria .

2. Can Mini Grids Solve Nigeria's Electricity Access Problem? https://businessday.ng/editorial/article/can-mini-gridssolve-nigerias-electricity-access-problem/. Accessed 16th January, 2024.

3. O. Udegbunam, Nigeria Businesses Lose $29bn Annually to Poor Electricity https://www.premiumtimesng.com/news/top-news/456904-nigeria-businesses-lose-29-billion-annually-to-poorelectricity.html?tztc=1. Accessed 16th January, 2024.

4. Green Mini-Grid Help Desk, Introduction to Mini-Grids https://greenminigrid.afdb.org/how-it-works/help-deskdevelopers-and-ope rators/introduction-mini-grids. Accessed 16th January, 2024.

5. Section 5 of the Mini-Grid Regulations, 2023.

6. Section 3 of the Mini-Grid Regulations, 2023.

7. Section 3 of the Mini-Grid Regulations, 2023

8. ibid

9. K, Jeremiah, Nigeria's Unserved, Underserved Communities and Federal Government's Rural Electrification Goals https://guardian.ng/energy/nigerias-unserved-underserved-communities-and-fgs-rural-electrification-goals/. Accessed 16th January, 2024.

10. The Managing director of the Rural Electrification Agency had in 2023 reported that, through the NEP, over 80 mini-grids were completed and commissioned, connecting about 32,000 households, Micro and Small Medium Enterprises ("MSMEs"), and public facilities and providing clean and reliable electricity. The report can be accessed here https://www.premiumtimesng.com/news/more-news/617427-103-mini-grids-built-across-nigeria-says-ruralelectrification-agency.html. Accessed 16th January, 2024.

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