Embedded generation gives Nigerian electricity distribution companies (DisCos) the opportunity to improve their supply of electricity to customers independent of the problematic national grid while maintaining control of their franchise areas. The renewable embedded generation (REG) business model described in this report enables DisCos and developers to collaborate to deliver improved electricity services to customers through embedded generation. Despite its potential, the growth of embedded generation in Nigeria has been limited, mostly due to concerns about DisCos’ ability to pay for electricity purchased. As a result, existing embedded generation business models in Nigeria either involve energy project developers supplying DisCos with excess electricity from generation assets built for another purpose (e.g., on-grid generation plants with excess capacity, captive generation plants, or minigrids) or a developer supplying a distribution network not operated by a DisCo (e.g., through an independent electricity distribution network or a sub-franchising agreement).
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