Efficiency of Nigeria's Electricity Market: Emerging Issues, Prospects and Challenges
Association of Energy and Environmental Economics of Nigeria - Nigerian Journal of Energy and Environmental Economics, 6(1), 105-121, 2014
20 Pages Posted: 17 Jan 2019
Date Written: March 8, 2014
The overwhelming objective of the electricity power policy strategy is to ensure that Nigerian has an electricity supply market (ESM) that can meet the needs of its citizens in the 21st century. This paper examines the efficiency of the Nigeria electricity market under the current framework. The priority is to create efficient market structures, within clear regulatory frameworks, that encourage more competitive market for electricity distribution and sales (marketing) which, at the same time, is able to attract private investors and ensure economically sound development of the system. The technique of analysis is purely descriptive (statistical). And a major factor is the distribution losses that are in double digits and which are extremely large by international standards, being among the highest in the world and a situation that are symptomatic of the technical inefficiency in the market. Reducing the losses to single digit is a major challenge facing the Nigerian electricity market. Cost reflective tariff is recommended.
Keywords: efficiency, electricity market, distribution, generating, transmission, Nigeria
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