Bonny Island, Nigeria. Photo: Chike Roland Oraekwugha
Nigeria’s government should pursue more targeted steps to grow alternative power sources such as renewables and to increase overall electricity supply.
Diverse stakeholders need closer cooperation to anchor full deregulation of the gas sector, paving the way for an attractive pricing regime and increased investments in power generation.
Regulators must accelerate efforts on universal metering of customers, including through pre-paid meters to enhance transparency in revenue collection.
Nigeria is in a dire energy situation with 60-70% of its population of almost 200 million people living without regular access to electricity. The majority of rural homes are also not connected to the national grid. With this, Nigeria’s industrial development and economic diversification plans are severely constrained. Experts estimate annual economic loss through power outages at about N126 billion (US$ 984.38 million). Though millions of households and businesses rely on self-generated electricity through power generating sets, this represents a major source of waste, severe health and environmental costs, as well as other inefficiencies.
Electricity generation began in Nigeria in 1896 with the installation of a 2MW plant to provide electricity for Lagos. The first electric utility company known as the Nigerian Electricity Supply Company was established in 1929. By the year 2000, a Federal government owned monopoly, the National Electric Power Authority (NEPA), was in charge of the generation, transmission and distribution of electricity. Reform efforts include the passing of the Power Sector Reform Act of 2005, which paved the way for the National Electric Power Policy aimed at establishing an efficient electricity market in Nigeria.
Following the return to civilian rule in 1999, the policy emphasis shifted to the transfer of ownership and management of power infrastructure and assets to the private sector. This led to the creation of structures required to create and underpin an electricity market in Nigeria. The Power Holding Company of Nigeria (PHCN) was established to replace NEPA in 2005. PHCN comprised of 18 successor companies, including six generation companies, eleven distribution companies and one transmission company. By November 2013, the privatisation of all the generation plants and ten distribution companies (Yola DisCo is currently managed by the government due to the insurgency) was completed. However, the Federal Government presently retains the ownership of the transmission company.
See more here: NGI Solving Nigerias Electricity crisis
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