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 vitality 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 vitality.
It additionally recorded the best variety of grid collapses in a single 12 months.
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 12 months.
Q1
MOFI takes over FG’s stake in 11 DisCos (January)
The Ministry of Finance Included (MOFI) formally assumed possession and administration of the Federal Authorities’s 40% fairness within the Electrical energy Distribution Firms (DisCos). This transition aligns with MOFI’s mandate to make sure effectivity in managing these firms and enhance authorities income.
Context
In the course of the 2013 privatization of the 11 DisCos, MOFI granted a Energy of Legal professional (PoA) to the Bureau of Public Enterprises (BPE) to handle the federal government’s retained 40% shares. Nevertheless, this association was just lately revised. In two separate letters signed by the Minister of Finance and Coordinating Minister for the Financial system, in addition to MOFI’s CEO, the PoA was terminated.
This choice underscores the federal government’s intent to centralize possession, administration, and management of its fairness holdings underneath 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- Director Modifications: BPE-appointed administrators on the boards of DisCos have been withdrawn.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: Current share certificates held by BPE will likely be canceled, and new ones will likely be issued in MOFI’s title.
Why It Issues
This shift marks a major step towards professionalizing and centralizing the administration of government-owned belongings within the energy sector, a sector lengthy hampered by inefficiency and monetary mismanagement.
By consolidating management underneath MOFI, the federal government goals to reinforce governance, accountability, and operational effectivity. This restructuring may additionally entice non-public sector funding, stabilize the facility provide, and increase electrical energy infrastructure.
For Nigerians, this transfer holds the potential for improved electrical energy companies and a extra sustainable vitality sector, addressing one of many nation’s essential improvement 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 legislation on February 9, marking a major improvement in Nigeria’s efforts to reform its energy sector.
The Electrical energy Act (Modification) Invoice, 2024, seeks to “tackle the event and environmental considerations of host communities, and units apart 5 p.c 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 improvement follows the popularity of the pressing must 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 direction of cleaner vitality options turned extra crucial
Why It Issues:
This transfer is seen as a vital step towards addressing Nigeria’s electrical energy disaster, which has hindered financial progress and improvement for many years. By fostering a extra clear and sustainable vitality framework, the modification is predicted to pave the way in which for elevated overseas investments, extra dependable energy provide, and the creation of jobs within the renewable vitality 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 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 crops.
Numerous 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 handle the vitality poverty confronted by nearly all of Nigerians.
Why it issues
- In line with 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.
- Because the 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 Power 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 said 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 underneath the Presidential Energy Initiative was geared toward enhancing energy provide to elements 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 payment assortment.
Q2
Govt to patronise native electrical energy tools producers
In Might 2024, the Federal Authorities stated it will patronise native producers for electrical energy tools.
Context:
The Minister of Power, Bayo Adelabu promised that businesses underneath 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 impression 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.
AfDB approves $500 million mortgage to spice up electrical energy entry in Nigeria (June)
The Board of Administrators of the African Growth Bank Group permitted a mortgage of $500 million to Nigeria, to finance the primary part of the Financial Governance and Power Transition Help Program (EGET-SP), a brand new program geared toward accelerating transformation of the nation’s electrical energy infrastructure and enhancing entry to cleaner sources of vitality.
Context
The Nigerian authorities launched the vitality 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 vitality transition plan envisions the event, by 2050, of 250 GW of put in electrical energy capability, 90% of which will likely be renewable. It would present clear cooking entry to the majority of the inhabitants by 2030, utilizing liquefied petroleum gasoline (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 hundreds of thousands of households and companies to cleaner and renewable sources of vitality.
USAID to speculate N115bn in Nigeria’s energy sector (July)
The USA Company for Worldwide Growth 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 inexpensive energy.
Context
Greater than 85 million Nigerians haven’t any entry to grid energy, and lots of have suffered from unreliable energy provide. Given these challenges, many Nigerian households and companies depend upon costly, emission-intensive petrol and diesel backup turbines.
Why it issues
The USAID-Nigeria deal helps hundreds of thousands of Nigerians to entry inexpensive electrical energy particularly within the rural areas.
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 group effectivity of 79.31%.
Context: In line 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 persistently 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 stated that the present administration’s choice 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 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 fees
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 Faculty 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 fees 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 typically causes disagreements between clients and energy distribution firms.
“Out of over the 12 million electrical energy clients we’ve got in Nigeria, solely somewhat over 5 million is metered. We have now over seven-million-meter hole in the present day, 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 honest billing of shoppers and correct cost for electrical energy consumption. It additionally gives real-time info 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 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) stated it put in 184,507 metres in Q3 2024.
In line 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 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 accordance with knowledge printed by the Nigeria Electrical energy Regulatory Fee (NERC)
In line with the fee, all DisCos collectively obtained N466.69 billion, recording a income assortment effectivity of 74.55%, 4.76% in need of 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 instances. The present administration has confused that electrical energy is dear and Nigerians should be prepared and prepared to pay. This opinion knowledgeable the federal government’s choice 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 Govt Council permitted N262.75bn for the primary Section of the Presidential Energy Initiative, in any other case generally known as the Siemens Venture.
The venture 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 venture’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 passed off 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, however it has failed to attain that.
- It’s left to be seen how a lot impression the Siemens venture can have in Nigeria’s quest to attain 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 group of Ogun state, and a 142/33KV cellular substation on the University of Ibadan in Oyo State.
In line with the Minister of Power, the venture was executed by the FGN Energy Firm, in collaboration with Siemens Power.
Context
The President Tinubu administration is making numerous 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 underneath the pilot part of the Presidential Energy Initiative, symbolize a strategic deployment geared toward enhancing the transmission capability constraints by over 1300MW throughout the nation,” he stated.
Ministries of Energy, and Water Sources signal MOU, goal 14,000MW of electrical energy from hydro
In November 2024, the Ministry of Energy and the Ministry of Water Sources 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 Sources, Joseph Utsev in Abuja in November 2024.
In line with Adelabu’s media aide, Bolaji Tunji, the MOU was for implementing the World Bank Sustainable Energy and Irrigation Venture for Nigeria (SPIN) programme.
Why it issues
Adelabu the SPIN programme is critical 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 Software, “to make sure honest and environment friendly pricing”.
The software was developed by way 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 initiatives.
Why it issues
- The deployment of mini-grids has confirmed to be a sustainable method 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 similar to photo voltaic, wind, hydro, and biomass.
- The Nigerian authorities is actively deploying mini-grids by way of the Nigeria Electrification Venture (NEP) Initiative, with the intention to enhance electrical energy entry for extra residents.
NERC transfers electrical energy oversight tasks to 9 states
Between April and December 2024, the NERC transferred electrical energy oversight tasks to 9 state electrical energy regulatory our bodies. It is a results of the decentralization of electrical energy regulation by the federal authorities.
9 states have to date arrange electrical energy regulatory businesses and have been permitted 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 among the main hindrances to Nigeria’s aim to attain 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 tasks to states is predicted to assist them implement tailor-made options that tackle their distinctive electrical energy calls for by way of technology and distribution.
- Slightly 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 may considerably improve the variety of hours of electrical energy out there 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 principally 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 as a result of an imbalance in frequency ranges or energy provide redundancy, it’s typically adopted by energy outages in lots of elements 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 vitality sources and in addition disrupted healthcare in hospitals. It’s left to be seen how the federal government will tackle this downside within the new 12 months
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