Stakeholders in the energy industry are advocating for collaboration, technology adoption, and increased investment to address Nigeria’s electricity challenges, OPEOLUWANI AKINTAYO writes
Nigeria’s average power generation of 3,970.33 MW as of July reflects the country’s energy crisis. Although there was an 8.6 per ent improvement from the previous year’s 3,655.64MW, it is still insufficient to meet the electricity needs of Nigeria’s population of over 200 million.
The World Bank stated that about 55 per cent of Nigerian households had access to electricity in 2020, up from 48 per cent in 2010.
The multilateral lender pointed out that the disparity between urban and rural electrification rates was high, as 84 per cent of residents in urban areas had access to electricity in 2020 compared to 80 per cent in 2010, while only about 25 per cent of residents in rural areas had access to electricity during this period, a slight increase from 24 per cent in 2010.
Worried by the worsening state of the country’s power sector, stakeholders converged at this year’s Nigeria Energy conference in Abuja to proffer solutions.
The conference with the theme “Unlocking new value with reforms, investments and technology” offered stakeholders the opportunity to consider options that the country could adapt to tackle its electricity challenges.
The Minister of Power, Adebayo Adelabu, who declared the conference open, harped on the need for critical issues such as private and public collaborations and investments as major requirements to make electricity more accessible and affordable.
“We are gathered here to discuss one of the most critical issues of our time, which is energy. This conference marks a significant milestone in our collective efforts to shape the energy landscape in Nigeria.
“This, of course, will accompany the opportunity to relate and interact with industry players and power sector investors. It will not only assist in the pace of my fact-gathering and understanding of the sector itself, but it is also a good platform for direct feedback from industry operators.
“I am confident that the narrative in the power sector, which is confronted with several challenges, will change soon. The challenges we face, ensuring access to reliable and affordable energy for all, are quite complex,” he stated.
The Power Minister addressed the challenges faced by the energy sector, ranging from energy security and sustainability to tackling climate change.
According to Adelabu, the Ministry of Power is focused on the balanced energy development that drives socio-economic transformation, thus satisfying the future utility and sustainable development nexus of energy security, sustainability, and affordability.
“We must, therefore, never underestimate the power of strategic collaborations in this bilateral sector,” he said.
According to the minister, without energy there is no power, adding that sustainable energy fuels the industries, powers homes, drives economic growth, and is the cornerstone upon which the progress and prosperity of nations are built.
He argued that Nigeria, blessed with abundant natural resources, a rapidly growing population, and an expanding economy, stood at a pivotal moment in its energy journey because the demand for accessible, reliable and sustainable energy had never been greater than what it is currently.
“The national energy mix comprises 80 per cent and 20 per cent of transitional coal and renewable hydro energy respectively, guided by national best practices such as IHA sustainability assessment control,” he noted.
He claimed that the country’s greatest challenges were grid reliability and universal access to power for the unserved and the underserved.
“I am confident that the narrative in the power sector, which is confronted with several challenges, will change in the near future. The challenges we face, ensuring access to reliable and affordable energy for all, are quite complex. It ranges from issues of energy security, and sustainability, to addressing climate change,” he added.
To address the challenges confronting the power sector, Adelabu called for collective efforts, saying that the Ministry of Power was focused on the balanced energy development that drives socio-economic transformation.
20,000MW target
As part of the plan, Adelabu said that the Federal Government would invest $20bn in power plants and grid stability, adding that this would grow the power sector in 2023 and beyond.
“The Nigerian government is actively advancing the power sector through various measures. With a $20bn investment plan, new power plants and transmission lines are set to be established to boost power generation and grid stability,” he said.
According to him, the government is also ramping up preparations to attain at least 20,000 megawatts of electricity generation in the next three years.
“Energy is the lifeblood of any economy, and no meaningful industrial growth can be achieved without power.
“That is why my tenure would focus on growing power generation to 20,000 megawatts in the next three years. But the target would be impossible without investments from all investors across the sector’s value chain. From the utilities to transmission and generation companies; everyone must be ready to invest to achieve the target,” he said.
The minister explained that the mid and long-term power generation targets of 30,000MW by 2030, and 60,000MW by 2060 were achievable, adding that enough investments must be made to not only generate power but also on how to transmit the same to end users.
Meter gap
He explained the huge metering gap must also be closed in order to ensure that power generated would be transmitted to electricity consumers who would in turn pay for the services.
“It is enough just to generate power, but the most important thing is also to be able to get at most 90 per cent of the power to consumers that would pay for it,” he explained.
The Federal Government stated it had been able to identify an 8 million metering gap, which investors could take advantage of.
“The Nigerian electricity market is huge. So, investors must be ready for mid and long-term investments before expecting to make profits. The industry needs liquidity and this can be attained through equity and debt capital,” the Minister for Power explained.
Although experts say Nigeria needs at least 30,000 megawatts to attain energy sufficiency, the country currently generates about 4,000 megawatts of electricity.
Despite the huge investments by FG, the national grid has since this year experienced up to three major collapses, with generation dropping to as low as 42MW and 35MW in two of the incidents. The Transmission Company of Nigeria blamed the incidents on fire outbreaks, infrastructure limitations, challenges in gas supply, and constraints within the transmission system.
The minister explained that Nigeria had a long-term energy expansion plan of 60,000 MW by 2016, and a medium-term target of 30,000 MW by 2015.
According to Adelabu, South Korea, a country with about 50 million population, generates over 130, 000MW of electricity.
“This was a country about less than 50 years ago; it was a net recipient of foreign aid. Even Nigeria was sending food aid to South Korea during the war before the ceasefire of 1953. They were generating less than 4,000 MW of power. But today, a country that has a little less than 50 million population, generates well over 130,000 MW of power. It is quite amazing.
“They are not just generating, they are transmitting, distributing and getting to the doorstep of the end users. So who says 60,000 MW is not achievable in less than 40 years in Nigeria? It is. The collective effort of all of us is actually required for this. But let me mention the fact that it is not just enough to generate power. As I have seen we are actually in a very good position given the kind of expression of interest to invest in Nigeria by generating companies.
“We have generating companies to achieve 30,000 MW by 2030 and 60,000 MW by 2060. But how do we get this to end users? Because it is the end users that they call the last man that pays for all the segments and critters in the value chain. If we cannot transmit as much as 80-85 per cent of the generated power to distributing computing companies and then get it to the customers, then we are wasting investments,” he elucidated.
Energy transition
In 2022, the Federal Government revealed its Energy Transition Plan, which outlines its strategy to reduce its carbon emissions across five key sectors (power, transport, oil and natural gas, cooking, and industry) to become carbon-neutral by 2060.
According to the government, the Energy Transition Plan requires an estimated $1.9tn, or $410bn above normal projected spending levels, to achieve this target.
The Managing Director of the Rural Electrification Agency, Salihijo Ahmad, believed that growth in Nigeria’s power sector should be linked to the global drive towards achieving energy transition due to the adverse effects of climate change brought about by global warming.
According to him, while the country transitioned from commercial energy fields, technology, and systems; there are still at least 80 million Nigerians without any form of energy access.
That, he said, implied that the energy transition being promoted and implemented must be fair, just, and inclusive for all.
“The REA is working on ensuring that there is a clear education plan that guides us towards energy access to over 18 million Nigerians,” he declared.
Adoption of technology
The Exhibition Director of Nigeria Energy, Ade Yesufu, harped on the need to continue to support the government and the industry by not just addressing the challenges but providing reliable long-term solutions for the power sector in West Africa and helping achieve its supply goals sustainably.
“Today, Nigerians stand united sharing the single vision to create a sustainable and modern energy future that serves all our citizens. This vision is particularly important in the light of recent developments in our government,” he asserted.
Other stakeholders also emphasised the need for the country to invest in cutting-edge technologies and innovative solutions that could transform the way electricity is generated, transmitted, distributed, and consumed.
On his part, the Managing Director of the Nigerian Electricity Management Services Agency, Aliyu Tahir, said that to achieve self-reliable and sustainable electricity supply and use, it was paramount that hazards that can lead to injuries and fatalities were effectively mitigated.
“We promote active working relationships with relevant agencies and other stakeholders to achieve greater efficiency in service delivery. We continue to provide our services to all stakeholders in the country and have come to terms that the function of enforcement of LPC standards and regulations requires greater collaboration with relevant stakeholders, especially the Standard Organisation of Nigeria, Nigeria LPC Regulatory Commission, security agencies to effectively and seamlessly tackle challenges of delivering safe, reliable and sustainable Legal Practice Council,” he said.
