At the heart of Nigeria’s electricity landscape lies a pressing concern: the likelihood of the federal government paying N600 billion in electricity subsidies. Sanusi Garba, the Chairman/CEO of the Nigerian Electricity Regulatory Commission (NERC), shed light on this significant possibility during the ministerial retreat on the Integrated National Electricity Policy and Strategic Implementation Plan. The event, held in Abuja, brought to the fore the critical challenges facing the nation’s power sector.
Garba emphasized the pivotal role of the Service-Based Tariff (SBT) in curbing tariff subsidies. Despite this, the financial weight of tariff subsidies from 2015 to 2022 loomed large at NGN2.8tn. The sector’s woes stem from inadequate end-user tariffs, lackluster DisCo collections, and revenue shortfalls, all of which undermine investments and the sector’s sustainability.
In his address, Minister of Power Adebayo Adelabu underscored the imperative to establish a new entity derived from the Transmission Company of Nigeria (TCN). This new company aims to bolster TCN’s efficiency in transmitting power from generating companies to distribution companies. Adelabu bemoaned the utilization of aging and dilapidated TCN infrastructure, rendering it unable to meet the burgeoning demand for power. The minister’s discontent with TCN’s lackluster performance prompted his call for its division into two entities. He firmly believes that this restructuring must align with the changing landscape of State Electricity Markets, advocating for the decentralization of the national grid into interconnected regional grids, facilitated by a new, higher voltage national or super-grid.
Moreover, Adelabu offered a glimmer of hope amidst the challenges, highlighting the nation’s remarkable transition to predominantly renewable sources for power generation. He revealed that Nigeria now generates over 98 percent of its electricity from renewables, a stark contrast to the 70.5 percent reliance on thermal plants in the previous year. This shift signifies a momentous stride, with solar and other clean energy sources constituting 2.2 percent of the energy mix. The ascendancy of transition fuels in powering electricity generation signals a promising trajectory for the nation.
As Nigeria navigates the complexities of its electricity landscape, the convergence of policy, investment, and technological innovation remains paramount. The challenges at hand present an opportunity to usher in a new era of sustainable and reliable power supply. The quest for renewables, coupled with strategic structural reforms, has the potential to chart a transformative course for Nigeria’s electricity sector. The envisioned future entails not only meeting the nation’s escalating energy demands but also embracing environmentally conscious and economically sound practices.
