The Federal Government has unveiled plans to develop Renewable Energy Service Companies (RESCOs) that will compete directly with electricity distribution companies (DisCos) over the next 10 to 15 years, marking a significant shift in its strategy to expand electricity access and reduce persistent power outages across the country.

Managing Director of the Rural Electrification Agency (REA), Abba Aliyu, disclosed the plan on Thursday at the Oriental News 2026 Conference in Ikeja, Lagos, saying the agency was repositioning the renewable energy sector to deliver utility-scale electricity services capable of operating independently of the national grid.

Represented by the REA Executive Director, Corporate Services, Gboyega Ayoade, Aliyu said the agency was moving beyond isolated mini-grid projects to support developers capable of building interconnected renewable energy networks that could power entire communities.

According to him, the proposed Renewable Energy Service Companies (RESCOs) will provide consumers with an alternative to conventional electricity distribution companies through round-the-clock clean electricity generated from solar energy and 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 rather than encouraging developers to establish a single mini-grid, the agency now wants operators to develop utility-scale interconnected mini-grids capable of serving whole communities.

“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 clean energy 24-7,” he added.

The REA boss argued that Nigeria could no longer rely solely on DisCos, noting that many communities remain without electricity because they are considered commercially unattractive.

“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 disclosed that agreements were already being reached between mini-grid developers and DisCos in areas where the utilities have little or no presence.

“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 that 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.

He added that RESCOs would also be able to build their own electricity infrastructure in areas not served by DisCos, 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.”

On electricity pricing, Aliyu maintained that Nigeria would only achieve stable power supply if consumers embraced cost-reflective tariffs, insisting that the government could no longer sustain 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 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 hours power,” he said.

Citing the experience of Band A customers, he added: “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.”

Aliyu also addressed concerns over the safety of solar panels and lithium batteries, saying the REA subjects all equipment deployed in its projects to rigorous testing before approval, while the Standards Organisation of Nigeria screens imported solar panels to ensure they meet required standards. He added that the agency is also developing proper recycling and disposal mechanisms for lithium batteries to minimise environmental and safety risks as renewable energy deployment expands.