In a significant development for Nigeria’s power sector, electricity distribution companies (Discos) have collectively generated approximately N3.95 trillion in revenue between 2019 and the first quarter of 2024, according to data from the National Bureau of Statistics (NBS).
Key Highlights:
- Revenue Growth: The sector has seen consistent year-on-year increases.
- 2019: N482.6 billion
- 2020: N526.8 billion
- 2021: N761.2 billion
- 2022: N828.1 billion
- 2023: N1.07 billion
- Q1 2024: N291.6 billion
- Factors Contributing to Growth:
- Tariff adjustments are moving towards cost-reflective pricing.
- Implementation of the National Mass Metering Programme
- Enhanced regulatory oversight
- Adoption of modern technology in billing and collection
- Persistent Challenges:
- High unpaid bills
- Electricity theft
- Infrastructure deficits
- Energy losses
Expert Insights:
Kunle Olubiyo, President of the Nigeria Consumer Protection Network, expressed concerns about the Discos’ efficiency:
- Questioned the effectiveness of pre-privatisation commitments
- Highlighted inadequacies in customer service and complaint resolution
- Raised issues with the implementation of the National Mass Metering Programme.
Industry Developments:
- Transmission Company of Nigeria (TCN) Funding Gap:
- N637.37 billion shortfall out of N1.79 trillion required
- 129 critical projects have stalled due to funding issues.
- Electricity Generation Costs:
- Minister of Power, Adebayo Adelabu, revealed the cost of generating 1 kWh is N120.
- The government is considering a differential tariff system to stimulate demand during off-peak hours.
- Captive power generation:
- Many industries have shifted to captive power plants due to grid unreliability.
- Costs for captive power range from N350–N400/kWh for gas to N950/kWh for diesel.
Future Outlook:
The government aims to restore trust in the national grid and encourage bulk users to reconnect, potentially leading to more efficient and cost-effective power distribution across Nigeria.
This comprehensive overview of Nigeria’s electricity sector highlights both progress and persistent challenges, setting the stage for potential reforms and improvements in the coming years.