The Federal Government, through the Rural Electrification Agency, has announced plans to establish Renewable Energy Service Companies that will compete with electricity distribution companies over the next 10 to 15 years as part of efforts to improve electricity supply and expand access nationwide.
According to The Punch, the Managing Director of the Rural Electrification Agency, Abba Aliyu, made the disclosure on Thursday during the Oriental News 2026 Conference held in Ikeja, Lagos.
Aliyu, who was represented by the agency’s Executive Director of Corporate Services, Gboyega Ayoade, said the REA was shifting its focus from promoting isolated mini-grid projects to supporting developers capable of deploying utility-scale renewable energy systems that can independently power entire communities.
He explained that the proposed Renewable Energy Service Companies, known as RESCOs, would provide consumers with an alternative to traditional electricity distribution companies by delivering uninterrupted clean energy 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 noted that the agency was no longer encouraging developers to install only one mini-grid in a community but was instead promoting larger interconnected networks.
“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 relying solely on distribution companies was no longer sustainable, pointing out that many underserved communities remain without electricity because they are considered commercially unviable.
“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.
According to Aliyu, renewable energy mini-grids can deliver more dependable electricity, provided operators properly maintain their battery systems.
He further revealed that agreements were already being implemented between mini-grid developers and distribution companies in locations where the latter 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.
Aliyu also disclosed that RESCOs could develop their own transmission infrastructure in areas not served by existing distribution companies, subject to approval by the Nigerian Electricity Regulatory Commission.
He said, “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.”
On electricity pricing, the REA boss insisted that reliable power supply would only be sustainable if consumers embraced cost-reflective tariffs, arguing that the Federal Government could no longer shoulder the burden of electricity subsidies.
“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 cited the experience of Band A customers as an indication that improved electricity supply is possible under a cost-reflective tariff regime.
“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.
Addressing concerns over renewable energy equipment, Aliyu warned against the use of substandard solar panels and lithium batteries. He said all equipment used in REA projects undergoes stringent quality assessments before deployment, while the Standards Organisation of Nigeria is screening imported solar panels to ensure compliance with approved standards.
He added that the agency was also developing recycling and disposal systems for lithium batteries to reduce environmental and safety risks associated with the increasing adoption of renewable energy technologies.
Earlier, the Publisher of Oriental News Nigeria Online, Mrs Yemisi Izuora, acknowledged the vital contribution of the extractive industry to Nigeria’s economy but stressed that its activities also have significant environmental implications.
“A well-protected environment no doubt gives us good health and provides greater opportunities to explore these natural resources,” she said.
