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Nigeria’s Power Quandary: Over 40,000 megawatts generated from petrol and diesel-powered generators, says FG

Minister of Power Advocates for Collaborative Action and Restructuring Amid Deep Electricity Paradox

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In a revelation that underscores the intricate challenges in Nigeria’s power sector, the Federal Government disclosed on Tuesday that the country relies on generators, fueled by Premium Motor Spirit (petrol) and Automotive Gas Oil (diesel), for approximately 40,000 megawatts of electricity. This staggering reliance on backup power sources was unveiled during the ministerial summit on the integrated national electricity policy and strategic implementation plan.

Minister of Power, Adebayo Adelabu, addressing the summit, highlighted the stark contrast between the intended objectives of the electricity sector reform program initiated over two decades ago and the current reality. Despite efforts to make electricity consistently available to consumers nationwide, Nigeria finds itself burning significant sums, amounting to tens of billions of naira daily, to generate power through inefficient petrol and diesel-powered generators.

Adelabu expressed the urgency to rectify this disconcerting situation, emphasizing the need to transform the current ratio between backup electricity generation and on-grid supply in the near to mid-term. The minister proposed restructuring the Transmission Company of Nigeria into two entities: the Independent System Operator and the Transmission Service Provider.

The call for restructuring aligns with the evolving landscape of state electricity markets, suggesting the decentralization of the national grid into regional grids interconnected by a new higher-voltage national or super-grid. Adelabu urged a critical examination of whether the government should directly provide electricity nationwide or facilitate its provision, drawing comparisons with models from China and the United States.

In addition, Adelabu emphasized the pivotal role of pension fund administrators, wielding over N17tn collectively, in understanding the Nigeria Electricity Supply Industry (NESI) and fostering bankable strategies for capital infusion. He urged collaboration among states, local government areas, and the current distribution companies (discos) to invest in reinforcing and extending local distribution infrastructure.

The power minister stressed the importance of enhancing competition and recognizing the vested interest that states historically hold in the shareholding of the Discos. As Nigeria grapples with the complex dynamics of its electricity sector, collaborative action and strategic restructuring are deemed essential for a more sustainable and efficient power supply.

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