Nigeria’s Energy sector has developed over time with improved investments by each the federal government and personal companies, however it’s removed from attaining dependable and sustainable power for all its residents.
Amidst quite a few challenges, the sector recorded notable actions and developments this 12 months, from coverage reforms and infrastructure upgrades to elevated non-public sector participation and investments in renewable power.
It additionally recorded the very best variety of grid collapses in a single 12 months.
Because the nation strives to bridge its power hole and energy its rising economic 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 12 months.
Q1
MOFI takes over FG’s stake in 11 DisCos (January)
The Ministry of Finance Integrated (MOFI) formally assumed possession and administration of the Federal Authorities’s 40% fairness within the Electrical energy Distribution Corporations (DisCos). This transition aligns with MOFI’s mandate to make sure effectivity in managing these firms and increase authorities income.
Context
In the course of the 2013 privatization of the 11 DisCos, MOFI granted a Energy of Lawyer (PoA) to the Bureau of Public Enterprises (BPE) to handle the federal government’s retained 40% shares. Nevertheless, this association was not too long ago revised. In two separate letters signed by the Minister of Finance and Coordinating Minister for the Economic system, in addition to MOFI’s CEO, the PoA was terminated.
This resolution underscores the federal government’s intent to centralize possession, administration, and management of its fairness holdings below MOFI, as stipulated within the company’s founding laws.
Key Modifications
- Reporting Necessities: DisCos are required to submit board minutes, stories, plans, and monetary statements from 2021 to 2023 to MOFI.
- Director Modifications: BPE-appointed administrators on the boards of DisCos have been withdrawn.
- Share Reconfiguration: Present share certificates held by BPE shall be canceled, and new ones shall be issued in MOFI’s identify.
Why It Issues
This shift marks a major step towards professionalizing and centralizing the administration of government-owned property within the energy sector, a sector lengthy hampered by inefficiency and monetary mismanagement.
By consolidating management below MOFI, the federal government goals to reinforce governance, accountability, and operational effectivity. This restructuring may additionally appeal to non-public sector funding, stabilize the ability provide, and increase electrical energy infrastructure.
For Nigerians, this transfer holds the potential for improved electrical energy companies and a extra sustainable power sector, addressing one of many nation’s important growth challenges.
President Bola Tinubu signed the Electrical energy Act (Modification) Invoice 2024 (February)
President Bola Ahmed Tinubu signed the Electrical energy Act (Modification) Invoice 2024 into regulation on February 9, marking a major growth in Nigeria’s efforts to reform its energy sector.
The Electrical energy Act (Modification) Invoice, 2024, seeks to “tackle the event and environmental issues of host communities, and units apart 5 % of the particular annual working expenditures of energy producing firms from the previous 12 months for the event of their respective host communities.”
Context:
This growth follows the popularity of the pressing have to reform Nigeria’s electrical energy infrastructure, which has confronted problems with instability, inadequate funding, and insufficient entry, particularly in rural areas.
Additionally, the Invoice has measures to empower the Nigerian Electrical energy Regulatory Fee (NERC) to implement stricter compliance with business requirements and encourage the transition in the direction of cleaner power alternate options turned extra crucial
Why It Issues:
This transfer is seen as an important step towards addressing Nigeria’s electrical energy disaster, which has hindered financial development and growth for many years. By fostering a extra clear and sustainable power framework, the modification is anticipated to pave the way in which for elevated overseas investments, extra dependable energy provide, and the creation of jobs within the renewable power sector.
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 principally for purchasers 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 fuel 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 power poverty confronted by the vast majority of Nigerians.
Why it issues
- Based on a 2023 examine, 68% of Nigerians obtained lower than 10 hours of electrical energy provide per day, whereas solely lower than 10% of Nigerians obtained 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 mentioned 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 throughout the Okene Transmission Substation.
Context
The venture which was awarded on the sixth of March 2023 below the Presidential Energy Initiative was geared 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 gear producers
In Could 2024, the Federal Authorities mentioned it could patronise native producers for electrical energy gear.
Context:
The Minister of Power, Bayo Adelabu promised that businesses below the Ministry of Energy could be inspired to patronise native producers.
Why it issues
This patronage will increase gross sales for native producers within the electronics market, and consequently impression the nation’s economic system positively. That is coming at a time when producers lament about excessive manufacturing value and poor gross sales on account of inflation.
AfDB approves $500 million mortgage to spice up electrical energy entry in Nigeria (June)
The Board of Administrators of the African Improvement Bank Group authorized a mortgage of $500 million to Nigeria, to finance the primary section of the Financial Governance and Vitality Transition Help Program (EGET-SP), a brand new program geared toward accelerating transformation of the nation’s electrical energy infrastructure and bettering entry to cleaner sources of power.
Context
The Nigerian authorities launched the power transition plan in August 2022, and in June 2023, handed a brand new Electrical energy Act decentralizing the electrical energy provide business and setting the stage for elevated investments by subnational governments and the non-public sector.
The power transition plan envisions the event, by 2050, of 250 GW of put in electrical energy capability, 90% of which shall be renewable. It’s going to present clear cooking entry to the majority of the inhabitants by 2030, utilizing liquefied petroleum fuel (LPG), biogas, biofuels like ethanol, and electrical cookstoves.
Why it issues
This initiative helps ship much-needed upgrades of Nigeria’s electrical energy infrastructure, and fast-tracking the nation’s efforts to transition thousands and thousands of households and companies to cleaner and renewable sources of power.
USAID to take a position N115bn in Nigeria’s energy sector (July)
The US Company for Worldwide Improvement and the Federal Ministry of Energy signed a memorandum of understanding to safe Nigeria’s dedication to electrical energy sector reforms, market transparency, liquidity, and increasing entry to reasonably priced energy.
Context
Greater than 85 million Nigerians don’t have any entry to grid energy, and plenty of have suffered from unreliable energy provide. Given these challenges, many Nigerian households and companies rely on costly, emission-intensive petrol and diesel backup turbines.
Why it issues
The USAID-Nigeria deal helps thousands and thousands of Nigerians to entry reasonably priced electrical energy particularly within the rural areas.
Nigeria’s DisCos income rises to N431.16 billion in Q2 2024
Nigerian Electrical energy Distribution Corporations (DisCos) recorded the sum of N431.16 billion as revenues from clients in Q2 2024, reflecting a set effectivity of 79.31%.
Context: Based on 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 enhance 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 prepared to bear the price of fixed electrical energy provide.
A rise in cost assortment by DisCos exhibits that this narrative is altering. It may be mentioned that the present administration’s resolution to take away the electrical energy subsidy and the hike in tariff for purchasers on Band A feeders contributed to this growth.
Q3
FG approves 50% electrical energy subsidy for hospitals
In August 2024, the Federal Authorities authorized 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 impression 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 expenses
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 Educating 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 expenses from 2019.
FG, states elevate 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, mentioned 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 are usually not metered and estimated billing usually causes disagreements between clients and energy distribution firms.
“Out of over the 12 million electrical energy clients we’ve got in Nigeria, solely a bit over 5 million is metered. Now we have over seven-million-meter hole at the moment, and these are self-inflicted issues,” Adelabu defined.
Why it issues
Metering is essential for the electrical energy sector’s industrial viability and sustainable income technology, guaranteeing honest billing of consumers and correct cost for electrical energy consumption. It additionally offers real-time data to clients and energy suppliers about how a lot power 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 obtained 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) mentioned it put in 184,507 metres in Q3 2024.
Based on the NERC’s Q3 2024 report the 184,507 meters put in marked a 256.01% enhance when in comparison with the 51,826 metres put in in Q2 2024.
That is believed to be an impression 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 line with knowledge printed by the Nigeria Electrical energy Regulatory Fee (NERC)
Based on the fee, all DisCos collectively obtained N466.69 billion, recording a income assortment effectivity of 74.55%, 4.76% wanting the effectivity fee recorded in Q2 2024 which was 79.31%.
Within the second quarter of the 12 months, 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 latest occasions. The present administration has pressured that electrical energy is pricey and Nigerians should be prepared and prepared to pay. This opinion knowledgeable the federal government’s resolution to chop subsidies on electrical energy and requested DisCos to supply premium companies to Nigerians on the Band A feeders.
This autumn
FG approves N263 billion for energy substations
In December 2024, the Federal Government Council authorized N262.75bn for the primary Section of the Presidential Energy Initiative, in any other case referred to as the Siemens Mission.
The venture includes 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 venture’s pilot section.
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 came about 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, but it surely has failed to realize that.
- It’s left to be seen how a lot impression the Siemens venture could have in Nigeria’s quest to realize adequate 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.
Based on the Minister of Power, the venture was executed by the FGN Energy Firm, in collaboration with Siemens Vitality.
Context
The President Tinubu administration is making numerous energy installations throughout the nation as a part of its Presidential Energy Initiative. The objective of the initiative, which is presently in its pilot section, 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 might assist scale back important infrastructure gaps and contribute to enhancing the ability system’s capability and reliability.
“These cellular substations, together with different gear present process set up below the pilot section of the Presidential Energy Initiative, symbolize a strategic deployment geared toward bettering the transmission capability constraints by over 1300MW throughout the nation,” he mentioned.
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 geared 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.
Based on 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 power combine, enhancing power safety, and combating local weather change.
He famous that hydropower presently contributes about 20 % of Nigeria’s 5,000MW grid provide, and already has a possible estimated at 14,000MW.
NERC adopts African Discussion board tariff device 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 Instrument, “to make sure honest and environment friendly pricing”.
The device was developed via a collaboration between the NERC and the AFUR, in addition to different key stakeholders within the power sector.
The AFUR mini-grid tariff device helps the implementation of the amended Mini-Grid Laws 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 method to diversifying the power combine and guaranteeing energy provides in each city and rural communities off the nationwide grid.
- They’re sometimes constructed to discover renewable power sources equivalent to photo voltaic, wind, hydro, and biomass.
- The Nigerian authorities is actively deploying mini-grids via the Nigeria Electrification Mission (NEP) Initiative, with the intention to increase 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 thus far arrange electrical energy regulatory businesses and have been authorized by the NERC to control 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 without doubt one of the main hindrances to Nigeria’s objective to realize power sufficiency and supply fixed electrical energy provide to the vast majority 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 tackle their distinctive electrical energy calls for when it comes to technology and distribution.
- Quite than all of them counting on the nationwide grid which presently generates lower than 5,000 MW, by successfully leveraging their electrical energy technology and distribution capacities, these states may considerably enhance the variety of hours of electrical energy out there to their residents.
Nationwide Grid collapsed 12 occasions
In 2024, the Nationwide Grid collapsed 12 occasions, ranging from February to December. The collapses have been principally introduced by Electrical energy Distribution Corporations 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
Tuesday, October 22
Wednesday, December 11
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 because of 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 12 months disrupted electrical energy provides to homes and companies. These disruptions resulted within the lack of income for small companies with out sustainable different power sources and in addition disrupted healthcare in hospitals. It’s left to be seen how the federal government will tackle this drawback within the new 12 months
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