Nigeria’s Energy sector has advanced through the years with improved investments by each the federal government and personal companies, however it’s removed from attaining dependable and sustainable vitality for all its residents.
Amidst quite a few challenges, the sector recorded notable actions and developments this yr, from coverage reforms and infrastructure upgrades to elevated personal sector participation and investments in renewable vitality.
It additionally recorded the best variety of grid collapses in a single yr.
Because the nation strives to bridge its vitality hole and energy its rising financial system, the notable occasions and developments within the energy and utility sector will form the nation’s future as we draw the curtains on 2024 and knock on the brand new yr.
Q1
Nigerians on band A feeder get extra electrical energy provide following hike in tariff
In March 2024, the Federal Authorities introduced the elimination of subsidies on electrical energy largely for patrons on Band A feeders, promising them improved provide.
The federal government argued that the elimination of the electrical energy subsidy was to enhance provide and permit it to repay its mounting debt within the utility sector.
Context
On the time, the federal authorities owed electricity-generating firms over a trillion naira whereas the producing subsector grappled with poor gasoline provide in energy vegetation.
Varied stakeholders within the Energy sector had urged the federal authorities to pay the money owed it owed GenCos. In the identical vein, the President had promised to deal with the vitality poverty confronted by nearly all of Nigerians.
Why it issues
- In keeping with a 2023 examine, 68% of Nigerians acquired lower than 10 hours of electrical energy provide per day, whereas solely lower than 10% of Nigerians acquired above 15 hours of electrical energy per day.
- For the reason that hike of electrical energy for Nigerians on Band A feeders, the federal government has insisted that they get pleasure from a minimal of 20 hours of electrical energy.
- In September 2024, the Minister of Power stated that about 40% of Nigerians now get pleasure from over 20 hours of electrical energy provide. The Nationwide Bureau of Statistics, in its “Nigeria Residential Vitality Demand-side Survey Report 2024” famous that 86.6% of Nigerians had electrical energy provide for a median of 6.6 hours per day.
Energy minister pledges transparency in metering system
In February 2024, Nigeria’s Minister of Power, Adebayo Adelabu, pledged to make sure all households and companies are correctly metered.
Adelabu acknowledged this in Okene, Central senatorial district of Kogi State when he commissioned a 60MVA, 132/33kV energy transformer inside the Okene Transmission Substation.
Context
The challenge which was awarded on the sixth of March 2023 beneath the Presidential Energy Initiative was aimed toward bettering energy provide to components of Kogi, Edo, and Ondo states.
Why it issues?
Offering metres to Nigerians helps guarantee accountability in electrical energy billing by distribution firms. With accountable billing comes equity and effectivity in price assortment.
Q2
Govt to patronise native electrical energy tools producers
In Could 2024, the Federal Authorities stated it will patronise native producers for electrical energy tools.
Context:
The Minister of Power, Bayo Adelabu promised that companies beneath the Ministry of Energy could be inspired to patronise native producers.
Why it issues
This patronage will enhance gross sales for native producers within the electronics market, and consequently affect the nation’s financial system positively. That is coming at a time when producers lament about excessive manufacturing price and poor gross sales because of inflation.
Nigeria’s DisCos income rises to N431.16 billion in Q2 2024
Nigerian Electrical energy Distribution Firms (DisCos) recorded the sum of N431.16 billion as revenues from clients in Q2 2024, reflecting a set effectivity of 79.31%.
Context: In keeping with the quarterly report of the Nigerian Electrical energy Regulatory Fee (NERC) for the second quarter of 2024, DisCos had a complete billing of N543.64 billion.
The 79.31% assortment effectivity represents a modest improve of 0.20 proportion factors when in comparison with the earlier quarter’s 79.11% effectivity.
Why it issues
The Nigerian authorities has constantly argued that Nigerians weren’t keen to bear the price of fixed electrical energy provide.
A rise in cost assortment by DisCos reveals that this narrative is altering. It may be stated that the present administration’s resolution to take away the electrical energy subsidy and the hike in tariff for patrons on Band A feeders contributed to this improvement.
Q3
FG approves 50% electrical energy subsidy for hospitals
In August 2024, the Federal Authorities permitted a 50 per cent subsidy for the electrical energy consumed in hospitals throughout the nation.
This was introduced by the Minister of State for Well being and Social Welfare, Dr. Tunji Alausa, who famous that the intention was to scale back the working prices for public hospitals and alleviate the affect on sufferers
Context
The Minister of Power had promised that the Federal Authorities would subsidise electrical energy in hospitals and universities, even when they’re on Band-A feeders. Hospitals had complained about not with the ability to afford electrical energy prices
Why it issues
- The subsidy was granted at a time when the administration of tertiary hospitals have been lamenting about not with the ability to pay electrical energy payments.
- A few of them have been disconnected from the grid, notably the College School Hospital, Ibadan, and the Lagos College Instructing Hospital.
- Nevertheless, it’s not clear whether or not the subsidy has been applied or is useful to the hospitals. In October 2024, the UCH Ibadan was thrown into darkness for days after its electrical energy was disconnected by the Ibadan Electrical energy Distribution Firm (IBEDC).
- The hospital administration admitted that it owed over N3 billion in electrical energy prices from 2019.
FG, states increase N100 billion for meter procurement, distributes 184,507 metres in Q3 2024
In August 2024, the Federal Authorities introduced that, in partnership with states, it raised N100bn for the procurement of pay as you go electrical energy meters, as half of the present administration’s Presidential Meter Initiative programme.
Minister of Power, Adebayo Adelabu, who disclosed this in Ibadan, Oyo State, stated 1000’s of metres could be distributed to Nigerians in a bid to shut the metre hole within the nation
Context
The minister famous that a big majority of electrical energy customers in Nigeria aren’t metered and estimated billing usually causes disagreements between clients and energy distribution firms.
“Out of over the 12 million electrical energy clients we’ve in Nigeria, solely a bit over 5 million is metered. We’ve got over seven-million-meter hole immediately, and these are self-inflicted issues,” Adelabu defined.
Why it issues
Metering is necessary for the electrical energy sector’s industrial viability and sustainable income technology, guaranteeing truthful billing of shoppers and correct cost for electrical energy consumption. It additionally supplies real-time data to clients and energy suppliers about how a lot vitality is getting used.
The Minister had argued that many Nigerians weren’t paying their payments as a result of they disagreed with the estimated payments they acquired from distribution firms. He argued that metering would guarantee transparency.
184,507 metres in Q3 2024
In December 2024, the Nigerian Electrical energy Regulatory Fee (NERC) stated it put in 184,507 metres in Q3 2024.
In keeping with the NERC’s Q3 2024 report the 184,507 meters put in marked a 256.01% improve when in comparison with the 51,826 metres put in in Q2 2024.
That is believed to be an affect of the federal authorities’s improved funding within the energy and utilities sector.
Nigerians pay N466 billion to DisCos in Q3 2024 – NERC
Nigerians paid a complete sum of N466.69 billion out of the N626.02 billion they have been billed for electrical energy provide within the third quarter of 2024, in response to information revealed by the Nigeria Electrical energy Regulatory Fee (NERC)
In keeping with the fee, all DisCos collectively acquired N466.69 billion, recording a income assortment effectivity of 74.55%, 4.76% in need of the effectivity charge recorded in Q2 2024 which was 79.31%.
Within the second quarter of the yr, the joint income of all discos was N431.16 billion out of N543.64 billion billed to clients.
Why it issues
The capability of Nigerians to pay for fixed electrical energy provide has been a significant debate in current instances. The present administration has confused that electrical energy is pricey and Nigerians have to be prepared and keen to pay. This opinion knowledgeable the federal government’s resolution to chop subsidies on electrical energy and requested DisCos to offer premium companies to Nigerians on the Band A feeders.
This fall
FG approves N263 billion for energy substations
In December 2024, the Federal Govt Council permitted N262.75bn for the primary Part of the Presidential Energy Initiative, in any other case referred to as the Siemens Mission.
The challenge entails the engineering, procurement, building, and financing of 330/132 KV and 132/33 KV substations in Onitsha, Offa, Abeokuta, Ayede, and Sokoto.
The Minister of Power, Mr Adebayo Adelabu, whereas briefing State Home Correspondents on the Aso Rock Villa, Abuja, defined that the approval follows the 80 per cent completion of the challenge’s pilot part.
Context
On December 1, 2023, the Nigerian authorities and its German counterpart signed the Presidential Energy Initiative settlement to inject 12,000 megawatts of electrical energy into Nigeria’s nationwide grid.
The signing, which occurred on the sidelines of the United Nations Local weather Change Summit, COP28, in Dubai, the United Arab Emirates, was presided over by President Bola Tinubu, and German Chancellor Olaf Scholz.
Why it issues
- Nigeria struggles to generate barely about 5,000 megawatts of electrical energy regardless of having the capability to generate between 16,000 to 22,000 MW.
- The federal authorities had focused elevating Nigeria’s energy technology to about 6,500 MW by December 2024, nevertheless it has failed to realize that.
- It’s left to be seen how a lot affect the Siemens challenge can have in Nigeria’s quest to realize enough electrical energy for its residents.
FG unveils cellular substations in Oyo, Ogun
In December 2024, the Federal Authorities, commissioned two cellular substations, a 63MBA substation within the Sapade neighborhood of Ogun state, and a 142/33KV cellular substation on the University of Ibadan in Oyo State.
In keeping with the Minister of Power, the challenge was executed by the FGN Energy Firm, in collaboration with Siemens Vitality.
Context
The President Tinubu administration is making varied energy installations throughout the nation as a part of its Presidential Energy Initiative. The aim of the initiative, which is at the moment in its pilot part, is to extend Nigeria’s energy technology capability from 4,500 MW to 25,000 MW and supply sustainable energy provide to all Nigerians.
Why it issues
Whereas commissioning the cellular substations, Adelabu famous that they’d assist cut back essential infrastructure gaps and contribute to enhancing the facility system’s capability and reliability.
“These cellular substations, together with different tools present process set up beneath the pilot part of the Presidential Energy Initiative, signify a strategic deployment aimed toward bettering the transmission capability constraints by over 1300MW throughout the nation,” he stated.
Ministries of Energy, and Water Assets signal MOU, goal 14,000MW of electrical energy from hydro
In November 2024, the Ministry of Energy and the Ministry of Water Assets signed a memorandum of understanding for a partnership aimed toward producing 14,000 megawatts of electrical energy for the nation.
The MOU was signed by Adelabu and his counterpart on the Ministry of Water Assets, Joseph Utsev in Abuja in November 2024.
In keeping with Adelabu’s media aide, Bolaji Tunji, the MOU was for implementing the World Bank Sustainable Energy and Irrigation Mission for Nigeria (SPIN) programme.
Why it issues
Adelabu the SPIN programme is important in diversifying Nigeria’s vitality combine, enhancing vitality safety, and combating local weather change.
He famous that hydropower at the moment contributes about 20 p.c of Nigeria’s 5,000MW grid provide, and already has a possible estimated at 14,000MW.
NERC adopts African Discussion board tariff software for mini-grid regulation
In December 2024, the Nigerian Electrical energy Regulatory Fee (NERC), introduced a proper adoption of the African Discussion board for Utility Regulators (AFUR) mini-grid Tariff Device, “to make sure truthful and environment friendly pricing”.
The software was developed by means of a collaboration between the NERC and the AFUR, in addition to different key stakeholders within the vitality sector.
The AFUR mini-grid tariff software helps the implementation of the amended Mini-Grid Rules 2023 and would improve the method of figuring out cost-reflective tariffs for mini-grid tasks.
Why it issues
- The deployment of mini-grids has confirmed to be a sustainable strategy to diversifying the vitality combine and guaranteeing energy provides in each city and rural communities off the nationwide grid.
- They’re sometimes constructed to discover renewable vitality sources resembling photo voltaic, wind, hydro, and biomass.
- The Nigerian authorities is actively deploying mini-grids by means of the Nigeria Electrification Mission (NEP) Initiative, as a way to enhance electrical energy entry for extra residents.
NERC transfers electrical energy oversight obligations to 9 states
Between April and December 2024, the NERC transferred electrical energy oversight obligations to 9 state electrical energy regulatory our bodies. This can be a results of the decentralization of electrical energy regulation by the federal authorities.
9 states have to date arrange electrical energy regulatory companies and have been permitted by the NERC to manage the electrical energy markets of their respective states.
The states are Enugu, Ekiti, Ondo, Imo, Oyo, Edo, Kogi, Lagos, and the most recent, Ogun.
Why it issues
- The strain on the nationwide grid is likely one of the main hindrances to Nigeria’s aim to realize vitality sufficiency and supply fixed electrical energy provide to nearly all of its inhabitants. Therefore the democratisation of the electrical energy market to permit extra gamers.
- Giving oversight obligations to states is anticipated to assist them implement tailor-made options that deal with their distinctive electrical energy calls for by way of technology and distribution.
- Quite than all of them counting on the nationwide grid which at the moment generates lower than 5,000 MW, by successfully leveraging their electrical energy technology and distribution capacities, these states might considerably improve the variety of hours of electrical energy accessible to their residents.
Nationwide Grid collapsed 12 instances
In 2024, the Nationwide Grid collapsed 12 instances, ranging from February to December. The collapses have been largely introduced by Electrical energy Distribution Firms in replace messages to their clients
Beneath is a timeline of the grid collapses:
Sunday, February 4
Thursday, March 28
Monday, April 15
Saturday, July 16
Monday, August 5
Monday, October 14
Tuesday, October 15
Saturday, October 19
Tuesday, November 5
Thursday, November 7
Context
- The nationwide grid is made up of an interconnection of excessive transmission wires and cables throughout the nation.
- Whereas the producing and distribution subsections have since been privatized, the federal government nonetheless manages energy transmission, therefore the Transmission Firm of Nigeria manages the nationwide grid and substations from which electrical energy is transmitted to transformers throughout the nation.
- When the grid collapses attributable to an imbalance in frequency ranges or energy provide redundancy, it’s usually adopted by energy outages in lots of components or throughout the nation.
Why it issues
The frequent collapse of the grid final yr disrupted electrical energy provides to homes and companies. These disruptions resulted within the lack of income for small companies with out sustainable various vitality sources and in addition disrupted healthcare in hospitals. It’s left to be seen how the federal government will deal with this downside within the new yr
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