The national electric power policy nepp of 2001 resulted in the electric power sector reform epsra act of 2005 establishing the nigerian electricity regulatory commission nerc. The managing power sector reform and regulation in africa course at the uct gsb gives managers and leaders working in this critical sector the ability to contribute to the reform of the power sector and deliver sustainable, affordable services to everyone while still accelerating economic growth. Chinas electricity sector faces the competing challenges of powering economic growth and. The expert committee submitted the report in august06. There are signs, however, that this time, the reform story could unfold differently. Accountability relations and market reform in chinas electric power. The electric power sector reform epsr act 2005 was then drafted to provide a legislative framework for the reform of the nigerian power sector in accordance with the policies set out in the national electric power policy. Managing power sector reform and regulation in africa. National electric power policy in september 2001, which recommended.
The world bank has been one of the main agencies funding reforms in the power sector. The act removes operational and regulatory responsibilities of the electricity industry from the federal government. The government of uttar pradesh announced its new power sector reform policy statement in january, 1999. Stamp duty shall not be chargeable under the stamp duties act in respect of. With the epsr act, nigerian power sector reform achieved institutionalisation. The nepp was encoded in legislation through the electric power sector reform act 2005. The standard text in policy reform is that until the reform is codifiedin an act of parliament, the gains of the reform remain reversible. Implementing the 2005 reform act has been challenging for. An economic assessment of the reform of nigerian electricity. By 1999 there were many centers of learning on power sector reform outside the bank. Update privatization issues federal ministry of power. There have been many challenges towards the full blown unbundling. Prior to 2005, there was no independent regulation of the power sector, as the national electric power authority nepa was both the operator and regulator of the sector based on the nepa or electricity act, lfn 1990. This study seeks to examine the power sector reforms, effects on electric power supply reliability and stability in nigeria.
The proposed economic and power sector reform program epserp is the banks response to a formal request of the fngn in may 2009 for a quick disbursing fiscal stimulus adf loan to support its efforts aimed at mitigating the adverse impact of the global financial and economic crisis. This act may be cited as the electric power sector reform act, 2005. Part i formation of initial and successor companies and the transfer of assets and liabilities of the national electric power authority 1. Power sector reforms in nigeria likely effects on power reliab. Unbundle the state owned power entity into generation, transmission and distribution. Power sector reform, a scorecard percentage of developing countries taking key reform steps in the power sector as of 1998 out of the 115 countries surveyed, 73 63% had initiated a reform, 42 36% had taken no reform steps and 15 % had taken only one step only 10 9% countries had taken. The challenges of the nigerian electric power sector reform. Electric power sector reform in nigeria business essay. Hence policy changes to reform the indian electricity supply industry have been developed with the support of multilateral agencies such as world bank. The epsra provided the statutory basis for the privatisation of the power sector.
An energyconsuming sector that consists of electricity only and combined heat and power chp plants whose primary business is to sell electricity, or electricity and heat, to the publici. In 2005, the governments electric power sector reform act initiated a process of privatization of the power sector to address these challenges and improve access to electricity across the country. Energy and rural electrification planning, the role of gis. The electric power sector reform act, 2005 the 2005 reform act was designed to move the electricity sector in nigeria from a government controlled, heavily subsidized system to a privatized, largely marketbased endeavour9. Act means the electric power sector reform act, 2005. Privatization of the electric power sector a market trading design and new rules, codes and processes 11 in march 2005 the national assembly passed the electric power sector reform act epsra. Reform the power sector learn best practice for economic regulation. The electric power sector reform epsr act 2005 was drafted to provide a legislative framework for the reform of the nigerian power sector in accordance with the policies set out in the national electric power policy.
The nigerian power sector legalregulatory framework key. But just as it was the case in many other third world economic 1 the market has remained the same in operation while on paper the old utility has been unbundled into 18 successive companies. Electric power sector reform act 2005 rural electrification agency. Guide to the nigerian power sector kpmg international. The challenges of the nigerian electric power sector. To combat the inefficiencies and incompetences in this sector, the nigerian government has attempted to have in place, the stage for the privatisation of the electric power sector by enacting the electric power sector reform act, 2005 the electric power. Application means an application for a licence, or for an amendment, renewal, or extension of the tenure of a licence under the act.
Power generation, transmission, distribution and supply have become like the proverbial parable, water, water everywhere but non to drink. Opportunities and challenges article pdf available in journal of energy in southern africa 183 august 2007 with 12,736 reads how we measure reads. Know your rights in new electric power sector reform bill 2018. Update privatization issues federal ministry of power, nigeria.
Following the introduction of the electric power sector reform act in 2005, nepa was transformed into a power holding company of nigeria phcn which was subsequently unbundled into 18 companies, including 6 generators, 11 distributors and one transmission company. Jan 11, 2016 introduction electricity regulation is still at its infancy in nigeria. The act removes operational and regulatory responsibilities of the electricity industry. Electricity sector reform training and field support kit. Energy efficiency to be the corner stoneofnew energy 3 4 policy. Challenges of deregulation of electric power sector in a. Power sector reforms government of india ministry of power. The goal of the power sector intervention is the establishment and maintenance of an inclusive and participatory platform that will contribute to the development of a rule based nigerian power sector that is self reliant, environmentally friendly, sustainable, promoting universal access to affordable and quality electricity to support national development. The minister shall recommend to the president for approval of market rules, to be developed by the. Even though government on its part has made enormous financial commitment in this sector to. Electric power sector reform epsr act 2005 archives. Overview overview of of nigerian power sector nigerian power sector contd.
International journal of management technology vol. Xu and chen 2005 comment on the success of these reforms. Standard prescriptions for power sector reform envisioned a rather linear path. Nigeria economic and power sector reform program epserp. In section 3 we sketch the processes applied for power sector reform and then assess the current status of the power sector in each sectoin section 4r. Electric power sector reform act, 2005 federal ministry of power. The largest group included 1040 counties, which were wholesale customers of. Business rules means the nigerian electricity regulatory commission business rules of the commission regulations, 2006 and as amended. Accountability relations and market reform in chinas. Investment in electricity generation and transmission in. Nigerian power sector reforms and privatisation by bolanle. In december 2002, the central government announced the electric power sector reform scheme popularly known as document no. The act outlined the framework of the reform as follows. The national council on privatization shall not later than.
In chinas eastern region market, simulated operation began in 2005 and trial. In many developing countries, and in particular those in asia, the middle east, and africa, reform of the power sector starts from a market structure that is dominated by a stateowned national power utility with a legally endowed monopoly and a vertically. This roadmap heralds our advance to the final and very important stage in the reform process. This is the stage where we ensure that the fundamental changes to the ownership, control and. The main aim of the act was to ensure the privatization of the power sector to ensure efficiency. The electric power sector reform act of 2005 epsr codified the preceding objectives, creating a new legal and regulatory framework for the sector, including the elimination of nepa and. With the epsr act, nigerian power sector reform achieved institutionalization. Milestones achieved passage of electric power sector reform in march 2005 the federal legislature passed the electric power sector reform act. Global electric power reform, privatization and liberalization of the electric power industry in developing countries english abstract. National electricity rules, monitors the wholesale electricity markets and. The proposed law titled electric power sector reform actamendment bill 2018 and sponsored by the legislator is a bill for an act to amend the electric power sector reforms act to. Reform of the electric power sector in developing countries.
Nigeria economic and power sector reform program african. Electric power sector reform act arrangement of sections part i formation of initial and successor companies and the transfer of assets and liabilities of the national electric power authority section 1. Nigeria electricity regulatory commission nerc, to regulate activities of the sector industries, set standard and enforce compliance. Global energy architecture performance index report 2015. This act shall be known as the electric power industry reform act of 2001. Epsra embodies radical reforms which if well implemented should produce a robust and competitive electricity industry where unreliable and inadequate service would be the exception rather than the rule. Act 2004 that obliged the energy regulator to take account of ministerial. The power sector annually avails a substantial share of about % 18%, the outlay of the national economic plan. A key step in this plan was the setup of the power holding company of nigeria. Impacts of electricity market reforms on the choice of nuclear and. There were few references to the analyses of the other development banks.
The electric power sector reform act of 2005 epsr act 2005 established the following institution to support the industry. This decree establishes a wholesale market, defines final consumers, and unbundles generation, transmission and distribution functions. The decision to reduce monopolistic control was a direct response to the failure of the centralized system to cope with power market fluctuations in the late. How far did power sector reform spread in the developing world. Power sector ceases to be a burden to the states budget and eventually becomes a net generator of financial resources. Reform structure the states had started the process of fundamental restructuring of the state power sector in mid 1990s. Decentralization enabled chinas market reform in the electric power sector. India needs to sustain 810% growth rate over the next 25 years for eradicating poverty and meeting its human development goals. Stronger markets, cleaner air 1 power sector contents 1 introduction 2 2 chinas 2015 deepening reform document 6 3 improving efficiency of power system operations 8 through generator pricing reform 4 integrating more renewable energy resources into 10 the power system 5 bolster the shenzhen pilot to support enduse energy 15 efficiency 6 a first step toward integrated resource.
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