In Nigeria, the private sector is increasing the supply of electricity by building distributed energy resources (DERs), which has created an opportunity for investment. One such business model for DERs is embedded generation, which can improve supply for customers in urban and peri-urban areas by injecting up to 20 MW of generation directly at the distribution level. This method of implementing distributed energy resources is an effective way to improve electricity reliability for a large group of customers within an electricity distribution company’s (DisCo’s) territory. It has the potential to contribute 5 GW of supply, which would displace a sizeable portion of the 14–42 GW estimated distributed diesel generators and reduced energy costs for customers.

Embedded generation can result in immediate supply improvements for customers, as it does not rely on uncertain future central generation and transmission build out. It also enables DisCos to improve supply for customers without ceding parts of their franchise areas to other parties.

This model — developed in collaboration with Abuja Electric Distribution Company, Eko Electric Distribution Company, Ibadan Electric Distribution Company, Ikeja Electric Distribution Company, Lagos State Government, and Viathan Engineering Limited — addresses the limited scaling of embedded generation, which will increase the reliability of supply for customers.