This year, Nigeria’s national grid has struggled, providing evident evidence of the rot that has made blackouts worse for homes and businesses around the nation.
The nation’s generation, transmission, and distribution of energy are all severely compromised, and the operators’ shortcomings are frequently attributed to a systemic breakdown.
In November 2013, the federal government privatised the power industry by giving core investors control over the distribution and generation businesses.
Analysts at CSL Stockbrokers wrote in a note on Wednesday, “Unfortunately, distribution companies (DisCos) have emerged as the weakest link in the electricity value chain, grappling with substantial operational hurdles since the conclusion of the privatisation.”
“The generation companies (GenCos) often have idle capacity because the DisCos find it difficult to match their capacity.”
They said that DisCos suffer both technical and financial losses as a result of their inability to effectively evacuate the power produced by Gencos and their consequent inability to make payments for the minimal amount of electricity they eventually distribute.
“In this scenario, end consumers suffer from an inadequate supply of electricity and GenCos are left with inadequate compensation for the electricity they generate,” they continued.
According to CSLS, discos are currently facing a number of serious operational difficulties, such as out-of-date and obsolete networks, poor network equipment maintenance, inadequate customer data, low metre penetration, and limited investment due to low revenues and a lack of outside funding.
Experts predicted that Nigerians might not see meaningful reprieve from power outages anytime soon, despite the recent advancements made by publicly traded enterprises Geregu Power Plc and Transcorp Power Plc as well as the arrival of the country’s eagerly anticipated 700 megawatt power plant project, the Zungeru hydropower facility.
According to Africa Oil & Gas Report, an energy intelligence publication, “issues with electricity transmission and distribution will impede the effectiveness of Nigeria’s recently inaugurated Zungeru Hydroelectric Power Plant, ranking as the nation’s fifth-largest generating facility by installed capacity.”
According to published estimates, the Zungeru hydropower station can produce 2.64 billion kilowatt-hours of electricity annually, or 10% of Nigeria’s entire domestic energy requirements.
In terms of nameplate capacity, Zungeru ranks behind Egbin (1,320MW), Sapele (1,020MW), Transcorp (972MW), Ughelli (900MW), and Kainji (800MW). However, none of these plants reach their capacity limits, frequently due to circumstances beyond their control.
The News Chronicles obtained data on Wednesday’s national peak demand prediction from the Independent System Operator. The data showed that the country had 13,014.14MW of grid installation capacity, and as of 6am, the amount of electricity generated was 3,929.35MW.
South Africa and Egypt, the nation’s continental rivals, produce 58,095MW and 58,818MW, respectively, in 2023.
In its most recent 2024 report, analysts at Cardinal Stone Limited stated that “the drags to generation capacity have largely reflected issues around gas constraints, routine maintenance, and technical mechanical faults.”
The research stated that “the capacity to carry out routine maintenance of machines, with the latter cascading to unscheduled outages, was a major bane to generation and the legacy lack of liquidity and payment assurance (especially for gas suppliers)”.
Nigerians struggle with a lack of electricity, which is made worse by persistent damage to the nation’s power infrastructure.
According to the Transmission Company of Nigeria (TCN), tower 70 on its 330KV Gwagwalada-Katampe transmission line was vandalised lately, resulting in a 250MW drop in the amount of power entering Abuja and a reduction in bulk power delivery.
In a 2024 analysis, experts at Meristem stated that these problems “limit the extent of investment and utilisation of existing infrastructure, leading to frequent disruptions and hindering the sector’s ability to provide reliable and consistent electricity supply.”
“The ongoing risk of equipment damage not only results in high maintenance costs but also discourages potential investors,” it continued.
TCN also revealed that in December of last year, thieves demolished two transmission towers that provided power to areas in the Northeast, cutting off supplies to Borno and Yobe.
As to BusinessDay’s data, the energy distribution firms (DisCos) have witnessed a surge in their income despite several hurdles.
The overall revenue of the DisCos increased to N782.58 billion in the first nine months of 2023 from N598.86 billion in the same period of 2022, according to data from the Nigerian Electricity Regulatory Commission (NERC). For the DisCos, this means a 30.7 percent rise in revenue.
The impact of recent regulations aimed at improving cash returns, such as increasing tariffs and ramping up metre supplies, is being observed by analysts.
But for years, Nigeria’s power production has remained consistently below 4,000MW. This year, the creaking grid has collapsed twice, partially or completely, mostly as a result of a lack of spinning reserves, an excess capacity designed to make up for shortages.
