The Federal Government has announced plans to license a new category of electricity providers known as Renewable Energy Service Companies (RESCOs) to compete with traditional power distribution companies (DisCos). This move comes as 19 Nigerian states push for more reliable electricity systems through renewable energy projects.
REA Unveils New Strategy for Utility-Scale Renewable Networks
The initiative, led by the Rural Electrification Agency (REA), aims to transform the electricity landscape over the next decade by expanding access to clean, uninterrupted power. Managing Director Abba Aliyu made the announcement at the Oriental News 2026 Conference in Ikeja, Lagos, represented by Executive Director of Corporate Services, Gboyega Ayoade.
Aliyu explained that the government is shifting from isolated mini-grid projects to utility-scale renewable energy networks capable of serving entire communities. Instead of single mini-grids, developers will now build interconnected systems comprising 20 to 50 mini-grids that can power entire towns and local government areas.
RESCOs to Offer Alternatives to DisCos
According to Aliyu, RESCOs will emerge as viable competitors to traditional DisCos within 10 to 15 years. The interconnected networks, primarily solar-powered with battery storage, will provide round-the-clock electricity without relying on the national grid. Consumers will eventually have the freedom to choose renewable energy providers instead of depending solely on conventional thermal power supplied through DisCos.
Aliyu argued that Nigeria cannot rely exclusively on distribution companies to achieve universal electricity access, noting that many rural and underserved communities remain without power because they are considered commercially unattractive. In several locations, DisCos have either failed to extend their networks or lack functional feeders, leaving thousands of residents without electricity.
Bridging the Gap Through DARES Programme
To bridge the gap, the REA is encouraging renewable energy developers to take over underserved areas through negotiated agreements with existing DisCos. Under the Distributed Access for Renewable Energy Scale-Up (DARES) programme, numerous mini-grid projects are already being deployed nationwide, with developers working alongside distribution companies.
Aliyu disclosed that renewable energy companies would be allowed to construct their own electricity infrastructure, including transmission lines, in locations where DisCos have no operational presence. However, such projects require approval from the Nigerian Electricity Regulatory Commission (NERC), which would grant operators exclusive rights to supply electricity within designated areas. This arrangement encourages private investment while preventing infrastructure duplication and service conflicts.
Cost-Reflective Tariffs Essential for Stable Power
Aliyu maintained that achieving stable electricity supply depends largely on consumers embracing cost-reflective tariffs. He argued that electricity should be treated as a commercial service rather than a government welfare programme, stressing that the Federal Government can no longer sustain the huge cost of power subsidies. Pointing to improved supply for Band A customers, he said consumers paying higher tariffs now receive between 18 and 24 hours of electricity daily. Similar service levels can gradually be extended to other customer categories if the sector becomes financially sustainable.
Safety and Quality Control for Renewable Equipment
Addressing concerns over the safety of solar panels and lithium batteries, Aliyu said the REA has strengthened quality control measures to eliminate substandard products. All equipment deployed under the agency’s projects undergoes rigorous testing, while the Standards Organisation of Nigeria screens imported solar panels before approval. The agency is also developing recycling and disposal systems for lithium batteries to reduce environmental and safety risks as renewable energy adoption accelerates.
19 States Push for Independent Power
The conference also highlighted that 19 states are actively moving to establish more reliable electricity systems through renewable energy, aligning with the federal government’s strategy. Publisher of Oriental News Nigeria Online, Yemisi Izuora, emphasized the need to balance economic growth with environmental sustainability, noting that protecting the environment is essential for public health and long-term national development.
