The Federal Government of Nigeria (FGN) has announced plans to establish Renewable Energy Service Companies (RESCOs) that will compete directly with electricity distribution companies (DisCos) over the next 10 to 15 years, marking a significant policy shift aimed at improving electricity access and reducing persistent power outages across Nigeria.

The initiative was unveiled on Thursday by the Rural Electrification Agency (REA) during the Oriental News 2026 Conference held in Ikeja, Lagos.

Speaking at the event, the Managing Director of the Rural Electrification Agency, Abba Aliyu, who was represented by the agency’s Executive Director, Corporate Services, Gboyega Ayoade, explained that the REA is transitioning from promoting isolated mini-grid projects to supporting developers capable of building utility-scale renewable energy networks that can independently power entire communities outside the national grid.

According to Aliyu, the proposed Renewable Energy Service Companies will provide consumers with an alternative to conventional electricity distribution companies by delivering uninterrupted clean electricity through interconnected solar-powered mini-grids backed by battery storage.

“We at REA are developing something called the RESCOs, Renewable Energy Service Companies that will rival the DisCos in the next 10 to 15 years,” he said.

Aliyu explained that the agency’s new strategy encourages developers to deploy multiple interconnected mini-grids rather than constructing a single mini-grid within a community.

“Instead of us encouraging a developer to come in and build one mini-grid in this area and say, okay, I have a mini-grid, no; we’re encouraging developers now to build utility-scale mini-grids so one developer can own the entire community and build about 20 mini-grids to 50 mini-grids. So that going forward, you can decide not to use the conventional thermal power and say you want to go completely clean and just focus on that. I want my service to come from AYZ Renewable Energy Service Company. They provide you with clean energy 24-7,” he added.

He argued that Nigeria could no longer depend solely on the existing distribution companies because many communities remain underserved due to limited commercial incentives for operators.

“We think that we can’t leave everything in the hands of the DisCos. In some areas, they don’t even provide services. If you go to some communities, they’ll tell you that a DisCo does not provide power for them because they’re not making more money from that or because they don’t have the right feeders or functioning feeders in those areas,” he stated.

Aliyu noted that renewable energy mini-grids offer a dependable alternative, capable of delivering uninterrupted electricity where battery systems are properly maintained.

He further disclosed that agreements are already being implemented between mini-grid developers and distribution companies in locations where conventional operators have limited or no electricity coverage.

“There are some areas currently that the DisCos do not service. So there will be an agreement between the DisCos and the RESCOs as we go along. Currently, as we speak, that agreement is already in place for some areas where we are deploying these mini-grids already.

“Under the Distributed Access for Renewable Energy Scale-Up, we are building a lot of mini-grids across the country. In those communities where these developers need to build interconnected mini-grids, they’re liaising directly with the DisCos and saying, ‘Hey, you don’t supply this area. Can we take this area off you and supply them?’” he said.

According to him, RESCOs will also have the opportunity to develop their own transmission infrastructure in communities without electricity supply, subject to regulatory approval by the Nigerian Electricity Regulatory Commission (NERC).

“In some areas where the DisCos are not supplying electricity at all, the RESCos are building their own transmission lines. Once you build a grid, you can build your own transmission line and supply those communities. It just has to go to NERC, which has to give you exclusivity rights to ensure that you own that infrastructure in that area and you’re able to supply.”

Addressing electricity pricing, Aliyu said Nigeria must adopt cost-reflective electricity tariffs to achieve reliable and sustainable power supply, stressing that continued government subsidies are no longer financially viable.

“The problem in Nigeria is that Nigerians also need to decide how we see power. Do we see power as a social responsibility of the government or do we see power as a commercial commodity that needs to be paid for? I believe that when we start to see power as a commercial commodity that needs to be paid for, then we will start to have 24-hour power,” he said.

He pointed to improvements recorded under the Band A tariff regime as evidence that higher-quality electricity service can be sustained through cost-reflective pricing.

“When they started paying that tariff, they’re actually getting at least 18 to 24 hours power in Band A areas. We can scale that to Band B, to Band C gradually. But people must pay the cost-reflective tariff for the generation of power. The government is broke; the government cannot afford to continue to subsidise power,” he added.

Aliyu also addressed concerns regarding the safety of solar panels and lithium batteries, warning against the use of substandard equipment. He explained that all equipment deployed under REA projects undergoes rigorous testing before approval, while the Standards Organisation of Nigeria screens imported solar panels to ensure compliance with national standards.

He added that the agency is developing proper recycling and disposal systems for lithium batteries to minimise environmental and safety risks associated with increasing renewable energy deployment.

Also speaking at the conference, the Publisher of Oriental News Nigeria Online, Mrs Yemisi Izuora, highlighted the importance of balancing economic development with environmental sustainability.

“A well-protected environment no doubt gives us good health and provides greater opportunities to explore these natural resources,” she said.

Source: Punch Newspaper