It is not an exaggeration to say that a recent report by the International Energy Agency (IEA) has disclosed that Nigeria’s national power grid experienced a staggering 46 collapses between 2017 and 2023, and that it is no more news to not a few Nigerians who are abreast with happenings regarding electricity supplies across the country.
The report, released on Wednesday, underscored the challenges faced by Nigerians in dealing with persistent and pervasive power failures, particularly noting a confounding prevalence in nationwide blackouts in 2023, notably on September 14, when a major transmission line suffered a fire, leading to a grid collapse.
The IEA report linked the continued struggles of Nigeria’s power grid to challenges that cut across dilapidating infrastructure and vandalism. In fact, the report stated that the worsening state of power infrastructure has heightened the country’s dependence on backup generators, with approximately 40% of electricity consumption relying on these alternatives.
IEA also noted that despite having a total installed capacity of around 13 Gigawatt, the average available capacity remained at approximately 4.5 Gigawatt in 2023. This was attributed to a combination of factors, including the dilapidation of power units, inadequate maintenance culture, and financial constraints.
The report highlighted the unreliable power supply in Nigeria, which has led to an estimated 40% of electricity being generated from backup generators. Natural gas played a dominant role, accounting for about 75% of electricity generated on the main grid in 2023. The IEA projected that natural gas would continue to play a crucial role in Nigeria’s power sector until 2030, gradually declining by 2050 as per the country’s Energy Transition Plan.
Still in the same vein, the agency highlighted the fact that renewable energy sources are also expected to play an increasingly significant role in the coming years, even as it forecasts a compound annual growth rate of around eight percent for renewables between 2024 and 2026.
As gathered from the report, hydropower is expected to contribute significantly, particularly with the completion of the Zungeru project, which is expected to generate around 2.6 Terawatt hours, per year, while Solar PV is also projected to experience rapid growth, with an average annual rate exceeding 50% over the next three years.
In fact, the report underscores the need for Nigeria to address challenges in its power sector, focusing on upgrading infrastructure, tackling vandalism, and implementing effective regulatory frameworks to ensure a more reliable and sustainable power supply for its citizens.
Dispassionately analyzing the IEA’s report, it cannot be said to be a misnomer to opine that the solution to Nigeria’s power crisis is tripartite in nature as it lies with the government, operators and consumers. The reason for the foregoing view cannot be farfetched since the report linked dilapidating infrastructure, vandalism, and inadequate funding to collectively be at the heart of the nagging challenge.
Given the triple nature of the challenge, it is expedient to say that one of the matters that arose from the report is that the power sector has over the years adequately been funded, and despite been well funded, access to electricity has remained a major problem as power seems elusive from households to firms.
As earlier gathered from a news report by the Punch Newspaper of October 17, 2022 with the headline, “Grid collapses 98 times under Buhari amid N1.52tn bailout”, “Nigeria’s available power generation capacity fell by 981.8 megawatts between 2015 and August 2022 despite the over N1.51tn intervention in the sector by the Federal Government since the current administration came on board in 2015”.
The foregoing ugly scenario is scandalous given the fact that the government, between 2018 and 2023, budgeted N829.788 billion for various electricity infrastructure projects as gathered. Still in a similar vein, this is besides $2.3 billion Siemens deal, which failed to deliver the 7000 megawatts of power it promised.
The amount budgeted for capital expenditure in 2023 is N195 billion, which will be funded from loans.
In fact, according to Dataphyte, a media, research and data analytics organization with the mission to deploy data tools and technology for the socio-economic development of Nigeria, power expenditure so far expended to the sector as at May 21, 2023 shows money alone won’t solve electricity problem.
To buttress the foregoing view, it is expedient to note that of the budgeted amounts, the sum of N376.979 billion was cash-backed and released by the government between 2020 and 2022. However, these expenditures have not bettered the fortunes of the power sector. Despite the electricity needs of the country, funds released are not utilized.
In 2020 (September), of the N128.005 billion capital appropriation, N68.672 billion was released and cash-backed. However, only N44.224 billion was utilized out of the amount released, according to data from the Budget Office of the Federation. The rest was not utilized.
Still in the same vein, in 2021, of the N206.745 billion devoted to capital expenditure, N164.307 billion was released and cash-backed. However, only N122.256 billion was utilized.
Also, in 2022, of the N296.637 billion appropriation, N144 billion was released, cash-backed, and utilized.
Given the foregoing, it is expedient to opine that despite the amount been put into the sector that the issues of dilapidated infrastructure and inadequate funding are still cropping up. Again, on vandalization of such infrastructure by hoodlums, it is sad that players in the sector, such as the government and operators have seemingly deem it unwise to adequately provide security to protect the infrastructures from vandals.
In fact, the challenge has kept recurring as the Transmission Company of Nigeria (TCN) just yesterday, January 25, 2024, on Thursday blamed gas constraints on thermal generating companies for the drop in power supply nationwide.
TCN General Manager of Public Affairs, Ndidi Mbah, made the disclosure in a statement, saying the situation had impacted the quantum of bulk power available on the transmission grid for onward transmission to the distribution load centres nationwide.
“The Transmission Company of Nigeria TCN hereby announces that there has been a gradual decrease in available generation into the grid due to gas constraints to the thermal generating companies, which has impacted the quantum of bulk power available on the transmission grid for onward transmission to the distribution load centres nationwide,” the statement read.
In fact, it is germane in this context to say that enough political will has not been demonstrated by the government towards addressing the challenges that the power sector is characterized with.
Given the foregoing, it will not be out of place for any reader of this piece to ask, “What should the government do?” Without doubt, the answer to the question is inherent in the view once shared by the Director of Research and Strategy at Lagos-based investment firm, Chapel Hill Denham, Mr. Tajudeen Ibrahim, who told Journalists during the second quarter of 2023 that the government should take its hands off the power sector and allow the private sector to run it as he noted that the telecoms sector was a good example.
He stated that the Federal Government’s involvement in transmission and generation should become a thing of the past, and while advocating for mini-grids, and noted that these would ensure that renewable and clean energy was used to power key areas and even rural areas of the country.
He cited a community in Oyo State that had electricity with the help of mini-grids, noting that the community members now had renewable energy to power their houses.
Ibrahim opined that if the government could consider these strategies, it would help improve the electricity sector.
In a similar vein, the Chief Executive Officer of the Centre for Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, called for the decentralization of power delivery in the country as he said, “There is a need to decentralize power-delivery in the country. The country is too big for power centralization, and there is a need for mini-grids. We also need to decide what to do with transmission grids, whether to concession or privatize them.”
While commending the development that saw the power sector move from the exclusive to the concurrent list, he advised that there should be a focus on mini-grids to support renewable energy.
“It is commendable that states can now generate their own electricity. Renewable energy should be made available and accessible by the removal of tariffs for equipment. This will ensure that different places can have electricity.”
Yusuf stated that distribution companies should be audited to understand if they could continue to carry on the duty of electricity distribution in the country, especially given their financial capacity.
“There is a need to audit the distribution companies, especially financially. Some of these companies are in huge debt and can barely carry on their activities. So, we need to do a holistic review of this.”
He pointed out that electricity tariffs should be cost-reflective in the country while there should be a system that would ensure that every customer was metered.
“The era of estimated billing should not be allowed to stand,” he added.
All said, it is expedient to in this context urge the government demonstrate more political will to address the issue of dilapidated infrastructures and vandalism in the power sector, and ensure that all funds and grants been allocated to the sector are judiciously spent on what such monies are meant for.
