The Federal Government announced on Tuesday that Nigeria receives an estimated 40,000 megawatts of electricity through the utilisation of generators fueled by Premium Motor Spirit, commonly known as petrol, as well as Automotive Gas Oil, more commonly referred to as diesel. This enlightening revelation was made at the ministerial summit focused on the Integrated National Electricity Policy and Strategic Implementation Plan. The summit delved into Nigeria’s predicament regarding electricity reliability, analysing it from the perspectives of governance, compliance with rules and contracts, and financial aspects. It was highlighted that Nigerian power generation and supply, serving a population of approximately 200 million individuals, oscillates between 3,500MW and 4,500MW.
During his speech at the summit, Adebayo Adelabu, the Minister of Power, emphasised that the Nigerian electricity sector reform program instituted more than 23 years ago aimed to ensure the widespread availability of electricity to consumers across the nation, focusing on both efficiency and consistency. Despite this, the minister stated that Nigeria still had not accomplished this goal. Instead, they have been spending enormous amounts of money in the form of hundreds of billions of naira to produce power using generators fueled by diesel and petrol.
People now depend on diesel and petrol-powered capacity.
In 2021, Nigeria consumption per person reached 140 kilowatt-hours, which was comparatively low when compared to its neighbouring nations and nearly three times lower than the average for Sub-Saharan Africa. He described Nigeria as a remarkable example of an electricity paradox, showcasing how the country has evolved into the home of possibly the largest collection of diesel- and petrol-powered generation capacity utilised for baseload supply. There have been mentions of different numbers; however, it is certain to affirm that the combined power of this group reaches a minimum capacity of 40,000MW.
Also, the daily cost of Nigeria highly inefficient supply is staggering, amounting to tens of billions of naira daily. This is due to an average operating cost of at least ₦250/kWh, which contrasts with the current economic tariff of around ₦120/kWh, considering petrol and diesel generation. He further emphasised that this money is acquired through immense effort and could serve a much greater purpose if allocated towards savings, optional consumer expenses, and government taxes rather than being recklessly wasted and causing harmful emissions from diesel and petrol, which damage our environment and contribute to constant noise pollution in various Nigerian cities.
Backup electricity generation and on-grid supply will be balanced.
He takes great pride in utilising his position to unite the industry in joint efforts to address this unsettling state of affairs. Their primary objective is to revolutionise the ratio between backup electricity generation and on-grid supply in the long run. Adelabu additionally emphasised the need to divide the Transmission Company of Nigeria into two separate entities: the Independent System Operator as well as the Transmission Service Provider. The reorganisation should align with the changing dynamics of State Electricity Markets, responding to the demand for the dispersion of the national grid into interconnected regional grids. These grids would be linked through the super grid operating at a higher voltage level.
Similarly, the main question to be pondered is whether the government ought to take charge of supplying electricity across the entire nation or simply support its provision. Multiple factors come into play by examining the contrasting methods of China’s centralised system and the United States’ diverse approaches, which include rural cooperatives and state-regulated utilities. During the summit, he also emphasised the importance of engaging the Pension Fund Administrators, who possess a total of over ₦17tn, in comprehending the Nigeria Electricity Supply Industry (NESI) and fostering viable approaches for injecting capital.
Collaboration is needed to enhance the sector.
Lastly, he highlighted the importance of collaboration between states, Local Government Areas, and the existing Electricity Distribution Companies (Discos) to allocate resources towards strengthening and expanding local distribution infrastructure. This approach should prioritise promoting healthy competition whenever feasible while also acknowledging the historical stake that states hold in the shareholding of the Discos. According to the power minister, it is necessary for state governments to acknowledge that their efforts in making and regulating policies at the state level will only be worthwhile if they successfully draw investments into their local markets.