Electric utilities and third-party developers can collaborate to provide large commercial and industrial (C&I)  customers with cleaner, more affordable, and more reliable electricity using distributed energy resources  (DERs).i  In Nigeria, these utilities, called distribution companies (DisCos), and DER developers can achieve  this using the DisCo-Enabled DER Business Model for Large C&I Customers described in this report.

Nigeria is poised for accelerated growth of DERs against the background of a maturing DER industry, innovation  in business models driving down costs of solutions, an enabling policy environment, and low near-term  prospects for improvement of the bulk grid. C&I customers are at the forefront of this development, as they  need reliable and affordable power and are able to pay for it. Today most large C&I customers resort to fossil  fuel self-generation of power, in parallel and not coordinated with their DisCo (referred to below as Business  as Usual). However, some large C&I customers are beginning to take advantage of declining renewable energy  prices to install their own captive DER system (or a Conventional Customer DER Solution) as a way to reduce  fossil fuel self-generation costs.ii Combining the benefits of DERs with optimized grid supply would create an even better solution for C&I  customers, providing reliable, affordable, and clean electricity. RMI and Abuja Electricity Distribution Company  (AEDC) worked together, funded by the US Trade and Development Agency (USTDA), to develop a business  model to enable such an optimized solution: the DisCo-Enabled DER Business Model for Large C&I Customers. 

This innovative business model enables “win-win-win” opportunities: customers save money and reduce risk  with a DER solution, DisCos adapt their service and maintain or increase revenue, and DER developers expand  to a larger set of commercially viable customers. Projects developed may reduce a customer’s electricity costs  by up to 50%, increase DisCo sales to that customer by 150%, and enable DER developers to access up to  170,000 underserved C&I DisCo customers (see Section 2). 

In the DisCo-Enabled DER Business Model for Large C&I Customers, a customer (or customers) receives an  uninterrupted supply of electricity from a combination of the DisCo’s distribution network and the DER system,  which can be located on the customer's premises or off-site.Optimized to take advantage of cheap solar  photovoltaic (PV) power production, the DER system provides electricity during daytime hours while the DisCo  supplies electricity during evening and nighttime hours (facilitated by minor grid upgrades that are financed by  the developer and repaid by the DisCo over time). The DER system includes backup capacity to guarantee an  uninterrupted supply.