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Nigeria needs $34bn for reliable power supply

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By Usman Oladimeji

Nearly $4.93bn is needed annually for the next seven years to deliver 20,000MW.

Erratic power supply and frequent grid failures has become a typical experience tormenting several households and businesses in Nigeria. Although several measures were implemented in this regard, the country is still far lacking behind in generating adequate and reliable power supplies. A report tagged Renewable Energy Roadmap Nigeria estimates that Nigeria will need to invest around $34.5 billion to guarantee reliable electricity access by 2030. The Nigeria Electricity System Operator reports that the country’s present supply is roughly 4,500MW.

Thus, the country will need to invest nearly $4.93 billion annually for the next seven years to achieve the aim of delivering 20,000MW to over 200 million people. According to the data presented, even though the country has the ability to generate 13,000MW of power, the actual supply is only around 4,500MW currently. It indicated that the issue was exacerbated by factors such as a lack of gas, machine breakdowns, seasonal water shortages, and limited grid capacity, all of which have significantly impacted the operational efficiency of these power plants.

Majority of Nigeria’s electricity comes from natural gas facilities.

As a result, there have been regular power outages, and that as a response, many people have taken steps notably shifting to alternative energy. There are two main types of power distribution networks in Nigeria: centralized (connected to the grid) and decentralized (not connected to the grid). The generation of power in the centralized system occurs on a massive scale at centralized facilities like huge hydro and thermal plants. Renewable energy technologies (including solar home systems, streetlights, and mini-grids) and captive diesel and petrol generator sets provide a few kilowatts to megawatts of capacity for the decentralized power power system.

About 13 gigawatts (GW) worth of grid-connected systems are now operational. However, the available peak generation on the grid today varies but often sits around 4.5 GW. The majority of Nigeria’s electricity comes from natural gas facilities (86%), followed by huge hydropower plants (14%). A severe hit to these dominating variables has resulted in widespread power outages that persist for hours daily. Many homes and businesses have also turned to diesel and petrol generator sets for backup power as a result of the situation.

84% of urban homes employ alternative power supply.

The entire capacity of self-generation based on fossil fuels is a matter of a certain ambiguity, at least in terms of installed capacity. Although the exact figure is unknown, it is estimated that as of 2015, the country had access to somewhere between 15 and 30.5 GW of diesel and petrol-based generation capacity (Solar Plaza, 2017). Nowadays, about 84% of urban homes employ alternative power supply systems like fossil diesel/gasoline generators and/or solar-based systems, while about 86% of firms in Nigeria own or share a generator.

Considering the fact that it has imported millions of captive generators, Nigeria is the largest importer of generators in Africa and among the top importers worldwide. The residential and industrial sectors of Nigeria’s economy suffer from the country’s unreliable power supply infrastructure and the high cost of isolated generation. Households and SMEs pay two to three times as much on kerosene, diesel and petrol as they do on grid power due to the high costs of captive generation.

Self-generating power supply makes goods more expensive.

Government data suggests that the expense to self generating electricity supply makes Nigerian goods about a third more expensive than imports. The use of captive diesel and petrol generators can be reduced if Nigeria improves its electricity service in terms of both access and reliability for its population. Collectively, these steps will bolster the nation’s Energy Transmission Plan (ETP), a pathway toward achieving a net-zero emissions, which is aimed at fruition by the year 2060.

Related Link

NERC: Website

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