I know there are lots of factors that contribute to Nigeria’s electricity issues (i.e. corruption, greed, bad leadership), but I’m looking for a simple, factual, and if possible technical explanation of why we don’t have stable electricity in Nigeria. Is it generation, distribution, infrastructure? All of the above? Please share your thoughts.
There isn’t really a simple answer; it’s mostly due to poor/lack of leadership.
Brief History: For a while, the electricity market in Nigeria had been run by the government under what we all know and love NEPA. Like any government agency in any country, it was run poorly. Recently, this agency was divided and privatized. Side Note: the transmission company is still owned by the government but managed by a Canadian company.
The Electricity industry is divided into three sectors. Generation, Transmission and Distribution.
Generation. The generation capacity in Nigeria is less than the demand; hence we rely on rolling blackouts to share the little electricity we have across the country. In addition, the generation plants which are operational do not have a steady supply of fuel. Natural gas pipelines continue to get vandalized, etc. This sometimes causes unplanned blackouts. Now, if the generation capacity were to increase to meet the demand, Nigeria would still have limitation on transmission.
Transmission and Distribution. The transmission and Distribution capacity (i.e. how much electricity can be moved from the generation plants to the distribution system) cannot handle the demand even if there was enough Generation.
That really is why we don’t have stable electricity in the country.
There are different schools of thought on how to solve this. My personal belief is the price of electricity in Nigeria is too low.
Using N200/1$, the price of electricity you pay is $0.12/kWh as an Industrial customer. That $0.12/kWh gets split between the Distribution company, Transmission Company and generation company. To compare, in Hawaii U.S. the cost of electricity for an Industrial customer is $0.25/kWh. Now, if you were a project developer and you had the choice to build a power plant in Hawaii where you get paid $0.25/kWh or Lagos where you get paid $0.12/kWh, what would you choose?
There are two ways to solve this, increase the tariff rate or subsidize electricity. Both are very difficult options, as a politician if you increase the electricity price you get voted out; and Nigeria doesn’t have the money to subsidize electricity over the long run.
With all these difficulties, Nigeria is making major recent strides. The peak amount of electricity generated and transmitted reached new highs in August 2016. High profile Power Purchase Agreements with Generation companies were signed (So we will have new generation capacity soon); there are talks to privatize the transmission company. The key is that we need consistent and focused leadership to see these initiatives through.
“All of the above” best describes the current plight of the electricity sector in Nigeria. Transmission is however usually easy prey when the blame game begins because they are generally lagging behind other parts of the value chain I.e. Distribution and generation. Experts say it is beacuse it is still handled by the government. Nigeria currently runs the risk of getting to a time when it is producing and has the capability to distribute more than TCN can handle if the grid doesn’t step up to the plate. Unless this gap is bridged, uninterrupted power will continue to elude us. We are, in the grand scheme of things still classed under “incremental” power supply, which means we should be actively be building a grid that is out pacing or at least competing with distribution and generation, to get to the next step which is uninterrupted power