Nigeria’s Minister for Power, Adebayo Adelabu has said that 70.5% of electricity is from gas (thermal plants), 27.3 from hydro, 2.2% from solar and others.
Adelabu said this while addressing where the country currently stands as it relates to electricity generation. He, however, emphasized that power generation is not where the country needs to improve significantly, but in transmission and distribution.
He gave this presentation during the Ministerial Retreat with the theme: Integrated National Electricity Policy and Strategic Implementation Plan: Navigating and Aligning on the Path to Enhanced Electricity Reliability, currently taking place in Abuja.
He said:
- “As of 2022, 70.5% of our grid electricity was generated by thermal plants, 27.3% from hydro, while solar and other power plants made up 2.2%.
- The good news here is that over 98% of the feedstock powering electricity generation in the country are transition or clean fuels, as Nigeria ramps up its capacity to generate more electricity through renewable means such as solar, hydro, wind, bioenergy and others.”
Adelabu also called attention to gas pricing in US dollars, which is a challenge facing stakeholders in the electricity sector as well as end consumers who have to deal with the volatility associated with foreign exchange. He said:
- “A more preferable option is to ensure that the gas utilized by the generation companies (GenCos) is traded in naira to better manage the foreign currency-related inflationary trends that challenge the faithful application of the Multi-Year Tariff Order (MYTO) methodology.”
He called attention to the fact that Nigeria has grown to become the host of the world’s largest fleet of diesel and petrol-powered generation capacity that is utilized for base-load supply.
Recall that Nairametrics reported at the beginning of the year in January 2023, that Nigeria leads Africa as the highest petrol and diesel generator importer.
This is according to the International Renewable Energy Agency (IRENA). In a report developed in partnership with the Energy Commission of Nigeria (ECN), titled ‘Renewable Energy Roadmap: Nigeria IRENA revealed that Nigeria’s on-grid generation is dominated by natural gas power stations and large hydropower plants.
However, unavailability of gas, machine breakdowns, seasonal water shortages and limited grid capacity have severely limited the operational performance of these power plants, thus affecting the power supply.
Adelabu stated further that the electricity gathered from Nigeria’s use of generators could be channelled into something more productive if the country was producing that amount of electricity.
He said that there have been different estimations, but it’s clear that the combined power of the generator-led fleet is at least 40,000 megawatts (MW).
To put things in perspective, Adelabu said the cost to run this electricity fleet is around N250 per kilowatt-hour (kWh), whereas the usual price people pay for electricity in Nigeria is about N120/kWh.
Because of this inefficiency, the daily expenses add up to tens of billions of naira. This money, according to him, could be better used in other ways like saving it, spending it on non-essential things, or funding government projects through taxes.
Instead, it is essentially wasted by burning diesel and petrol, which not only harms the environment with emissions but also adds to the constant noise pollution in many Nigerian cities.
It’s a significant loss of hard-earned money that could benefit the country in much more constructive ways.
Sometimes, electricity subsidies are unfunded
According to Sanusi Garba, the Chairman of the Nigerian Electricity Regulatory Commission (NERC), between 2015 and 2022, subsidy in the power sector was more than N2.8 trillion, with the Distribution Companies (Discos) balance sheet impaired by unfunded subsidies.
Recall that the Federal Government plans to spend about N900 billion on electricity subsidies in December 2023, because President Tinubu put a stop to an increase in electricity tariffs because of the economic stagnation facing the country and impacting the lives of Nigerians across the board.