In the Second Quarter of 2023, the Nigerian Electricity Regulatory Commission (NERC) revealed that the country’s Electricity Distribution Companies (DisCos) refused to accept 114.53 megawatt-hours per hour of electricity from generation companies. This rejection occurred despite 86 million Nigerians still lacking access to power.
The report from NERC highlighted that all 11 power distribution companies in Nigeria accepted less electricity than what was agreed upon in their contracts. Consequently, there was an average cumulative load rejection of 114.53 MWh/h.
These rejected loads occurred even though there were power outages in certain locations throughout Nigeria, and a total of N135 billion was spent on electricity in Q2 2023.
During the period under review, the collective average energy offtake by the 11 Discos amounted to 3,251.31 MWh/h, while their available contracted capacity stood at 3,365.84 MWh/h.
This structure aligns with international best practices for long-term contract-based power procurement and ensures that generation companies (Gencos) receive capacity payments to compensate for their availability.
To address this issue, the NERC introduced load offtake as a key metric in its KPI Order—Order on Performance Monitoring Framework (NERC/316-326/2022)—which was effective from October 2022 and applied to the Discos. The order states that persistent non-offtake of load up to certain thresholds may trigger regulatory actions against the management of the Discos.
The NERC further noted, “In 2023/Q2, the average energy offtake by the Discos at their trading points was 3,251.31 MWh/h, showing a decrease of -218.82 MWh/h (-6.31%) compared to the offtake of 3,470.13 MWh/h in 2023/Q1.”
During the quarter, all Discos accepted less than their available partially contracted capacity, except for Eko Disco, which had an offtake performance of 116.90% and will benefit from reduced wholesale energy costs.