NERC To Mandate Digital Inventory Tracking In Power Sector

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ABUJA – The Nigerian Electricity Regu­latory Commission (NERC) is fi­nalising a regulatory framework that could make digital inventory monitoring compulsory for opera­tors across the Nigerian Electrici­ty Supply Industry (NESI), as part of wider efforts to improve main­tenance planning, emergency re­sponse and operational efficiency, Daily Independent has gathered.

Findings by our correspon­dent indicate that the proposed framework is being developed by the commission’s Technical Regulation Division and is ex­pected to introduce data-driven oversight of inventory manage­ment across electricity genera­tion, transmission and distribu­tion companies.

Documents reviewed by Daily Independent show that the initia­tive centres on a Smart Inventory System, a digital platform de­signed to replace the largely man­ual inventory processes currently used across the power sector.

The move comes as Nigeria’s electricity industry continues to grapple with recurring equip­ment failures, prolonged outag­es and maintenance challenges that industry stakeholders have frequently linked to inadequate planning and shortages of critical spare parts.

Generation, transmission and distribution assets require routine maintenance and timely replacement of components to sustain network reliability, mak­ing inventory management a key part of day-to-day operations.

Across the Nigerian Electric­ity Supply Industry (NESI), elec­tricity is generated by GenCos, transmitted through facilities operated by the Transmission Company of Nigeria (TCN) and delivered to end users by the dis­tribution companies (DisCos).

The effectiveness of the entire value chain depends not only on the availability of power genera­tion capacity but also on the abili­ty of operators to respond quickly whenever faults occur. Delays in accessing essential materials of­ten prolong restoration efforts and increase operational costs.

Industry experts have long ar­gued that digital technologies can improve operational efficiency by providing real-time visibility into assets, inventory and main­tenance requirements.

Such systems allow operators to monitor stock movement, pre­dict future demand and reduce the risk of shortages through automated planning.

The proposed regulatory framework indicates that NERC intends to extend these capabili­ties across the electricity industry by establishing a common digital inventory monitoring standard for regulated operators.

The investigation revealed that NERC considers the absence of integrated inventory manage­ment as a major operational challenge affecting the industry.

Existing inventory records are largely maintained through spreadsheets and disconnected databases, making it difficult for operators to determine the actual availability and condition of crit­ical spare parts needed for main­tenance and emergency repairs.

The documents indicate that the current arrangement often leaves maintenance teams un­aware of shortages until equip­ment failures occur or scheduled repairs commence.

In several instances, materials recorded as available are found to have been reserved for ongo­ing projects, damaged, awaiting inspection, obsolete or located in facilities different from where they are urgently required.

Industry sources familiar with the proposal said such dis­crepancies have contributed to maintenance delays, prolonged restoration periods following faults and avoidable emergency procurement.

Under the proposed regula­tory order, operators would be required to digitise inventory records while deploying analyt­ics capable of monitoring stock levels, procurement lead times, equipment requirements, usage patterns and the condition of in­ventory items in real time.

The system would also cal­culate projected demand, es­tablish safety stock thresholds, determine reorder points and identify the likelihood of stock shortages before they affect field operations.

Automated notifications are expected to alert operators when­ever inventory levels approach critical limits.

Further findings show that the platform will extend beyond inventory tracking by analysing procurement performance, com­paring material requests with actual deliveries, identifying fre­quently requested but inadequate­ly supplied items and assessing emergency preparedness across operational locations.

As part of the presentation reviewed by Daily Independent, NERC demonstrated the pro­posed system using transformer oil inventory. Although records reflected 16 drums in stock, the an­alytics established that only eight were immediately available after excluding quantities already re­served for maintenance and those awaiting inspection.

Based on average monthly consumption, supplier delivery timelines and minimum safety stock requirements, the system identified a deficit of three drums, classified the inventory position as carrying a medium-to-high stock-out risk and recommended immediate replenishment along­side the release of inspected stock after quality clearance.

The documents examined during the investigation indicate that the commission expects the digital platform to convert rou­tine maintenance, procurement and fault management data into operational intelligence capable of improving planning and en­suring that critical materials are available where they are needed before shortages disrupt electric­ity operations.

The proposed regulatory or­der is expected to institutionalise digital inventory monitoring and strengthen operational readiness across the Nigerian electricity supply industry once it is formal­ly issued.