December 2, 2022
  • December 2, 2022

Electricity distribution in Nigeria; a gift that keeps on giving?

By on July 9, 2021 0


According to a recent report, Dr Joy Ogaji, Executive Secretary of the Association of Power Generating Companies of Nigeria, revealed that the power sector has lost 3,000 MW of electricity from an earlier capacity of 9,000 MW available in Nigeria over the past year. It should be noted that only 25 of the 160 authorized generation plants with a combined capacity of 13,000 MW are operational.

In addition, the secretary confirmed that despite the drop in capacity, excess capacity still exists as the distribution companies (DisCos) are not currently using all the electricity produced. The Transmission Company of Nigeria (TCN), had repeatedly complained about the rejection of electricity by distributors, who in turn argued that TCN was decreasing the electrical load in places where it was difficult for them. nightclubs to recover their rates, as residents of these areas find it difficult to pay their electricity bills.

Poor power supply remains a major obstacle to Nigeria’s economic development. The privatization exercise concluded in 2013 brought production and distribution companies into private ownership, but did little, if anything, to increase Nigeria’s available production. Although Nigeria has 13,000 MW of installed generation capacity, only around 6,000 MW is currently available and some of it is being rejected by discos. The challenges of the sector concern the entire energy value chain of production, transmission and distribution. Constraints such as insufficient gas supply for power plants, aging transport infrastructure and low tariffs are some of the factors hampering power sector reforms.

The Federal Government of Nigeria recently began a process that would lead to the complete privatization of the sector, as it intends to relinquish ownership and control of the Transmission Company of Nigeria. The Transmission Company of Nigeria (TCN) oversees the transmission of electricity around the grid and the installation of transmission lines and remains in the hands of the government.

One of the main reasons the FGN privatized the sector was that NEPA / PHCN had not continued to invest in electricity transmission infrastructure – the essential link between the generation and supply of electricity to the end user. However, it appears that the NEPA / PHCN model of non-performance continues to this day.

CSL Stockbrokers Limited, Lagos (CSLS) is a wholly owned subsidiary of FCMB Group Plc and is regulated by the Securities and Exchange Commission of Nigeria. CSLS is a member of the Nigerian Stock Exchange.