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Market reform in the Nigeria power sector: A review of the issues and potential solutions

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  • Arowolo, Wale
  • Perez, Yannick

Abstract

The Nigeria Power sector reform was performed between the year 2010 and 2013 but it has undoubtedly been adjudged unsuccessful by most stakeholders. The failure of the reform is evidenced by a myriad of seemingly insurmountable economic, institutional, technical, financial and socio-political challenges exacerbated by the recent macroeconomic crisis. This paper performs a comparative analysis of the Nigeria reform with the “Standard model” of electricity reform to understand the root cause of the reform failures while taking cognizance of the starting conditions of Nigeria. Our result reveals that incomplete privatization coupled with the horizontal integration of the transmission and network operations, the underdeveloped gas supply infrastructure network and the ineffective/weak regulatory framework as the root problems. Thereafter, we recommended strengthening the regulatory framework as a good starting point to resolve sectoral problems. We argued that, considering the depth of the regulatory concerns, strengthening the framework will resolve the problems of investment, access and pricing and improve the overall sectoral performance (ex-post). Furthermore, we recommended the need for a workable market design and regulatory framework for decentralized solar PV generation and integration that is adaptable and nicely fits with a strengthened centralized generation framework.

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  • Arowolo, Wale & Perez, Yannick, 2020. "Market reform in the Nigeria power sector: A review of the issues and potential solutions," Energy Policy, Elsevier, vol. 144(C).
  • Handle: RePEc:eee:enepol:v:144:y:2020:i:c:s0301421520303207
    DOI: 10.1016/j.enpol.2020.111580
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    References listed on IDEAS

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    1. Juanpera, M. & Blechinger, P. & Ferrer-Martí, L. & Hoffmann, M.M. & Pastor, R., 2020. "Multicriteria-based methodology for the design of rural electrification systems. A case study in Nigeria," Renewable and Sustainable Energy Reviews, Elsevier, vol. 133(C).
    2. Tiep, Nguyen Cong & Wang, Mengqi & Mohsin, Muhammad & Kamran, Hafiz Waqas & Yazdi, Farzaneh Ahmadian, 2021. "An assessment of power sector reforms and utility performance to strengthen consumer self-confidence towards private investment," Economic Analysis and Policy, Elsevier, vol. 69(C), pages 676-689.
    3. Mustapha Mukhtar & Sandra Obiora & Nasser Yimen & Zhang Quixin & Olusola Bamisile & Pauline Jidele & Young I. Irivboje, 2021. "Effect of Inadequate Electrification on Nigeria’s Economic Development and Environmental Sustainability," Sustainability, MDPI, Open Access Journal, vol. 13(4), pages 1-24, February.

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