The Federal Government announced on Tuesday that generators running on Premium Motor Spirit, also known as petrol, and those run on Automotive Gas Oil, also known as diesel, provide roughly 40,000 megawatts of electricity to Nigeria.
According to The Punch, It was revealed during the ministerial summit on the Integrated National Electricity Policy and Strategic Implementation Plan, which looked at governance, contract compliance, and finance as the main obstacles to Nigeria’s electricity reliability.
With an estimated population of 200 million, Nigeria’s national grid provides power to a capacity of 3,500MW to 4,500MW.
The minister of power, Adebayo Adelabu, stated during his speech at the summit that one of the primary goals of the Nigerian electricity sector reform program initiated over23 years ago was to make electricity available to consumers across the country with efficiency and consistency.
However, the minister stated that Nigeria had not yet accomplished this and had instead been burning hundreds of billions of naira to produce electricity using generators that ran on petrol and diesel.
According to him, Nigeria’s per capita electricity consumption in 2021 was 140 kilowatt hours, which was nearly three times less than the average for Sub-Saharan Africa and relatively low when compared to its neighbours.
Nigeria is a case study in a profound electrical paradox, according to Adelabu. Nigeria now has what is arguably the largest fleet of gasoline- and diesel-powered generating capacity in the world, which is used for baseload supply.
“A number of figures have been mentioned, but it is reasonable to assume that the total capacity of this fleet is at least 40,000MW.
“With an average operating cost of N250/kWh, which is significantly higher than the current average economic tariff of roughly N120/kWh (weighted towards diesel and petrol generation), the daily cost of this extreme inefficiency in Nigeria’s electricity supply can be measured in tens of billions of naira.”
In addition, he said, “This is hard-earned money that would be better used for savings, discretionary consumer spending, and government tax revenue rather than literally burning and going up in emissions from petrol and diesel that damage the environment and add to the constant noise pollution that plagues many Nigerian cities.”
Adelabu further stated that the Nigerian Transmission Company needed to be reorganised into two new companies: the Transmission Service Provider and the Independent System Operator.
“This restructuring must take into account the demands for the decentralization of the national grid into regional grids connected by a new, higher voltage national or super-grid, and align with the changing State Electricity Market landscape.
“Basically, the question is whether the government should supply electricity directly to every country or if it should just assist in doing so. There are a number of factors to take into account when comparing the US’s diverse access models—such as state-based utilities under regulatory supervision and rural cooperatives—with China’s centralized model.”
The Nigeria Electricity Supply Industry needs to be better understood, and bankable strategies for capital infusion need to be fostered, Adelabu stated, adding that “our Pension Fund Administrators, who collectively wield over N17tn, should delve into this.”
In addition, he pointed out that in order to maximize competition, states, local government units, and the existing discos must collaborate to expand and strengthen local distribution infrastructure. This is necessary while also acknowledging the historical equitable stake that the states have held in the Discos’ shareholding.
“State governments need to understand that their policy and regulation at the state level is only beneficial if it draws investments into their local electricity markets,” the minister of power said.
