GENERATION
As highlighted in our 2024 Power Sector Mid-Year Report, the historical challenges hindering the eective performance of the Nigerian Power Sector still persists in 20241. As of January2024, with 26 grid-connected powerplants, the total available generation capacity stood at 4,459.41 MW, with an average hourly generation of 4,274.80 MWh/h and a total energy generation of 3,180.45 GWh. However, according to the Nigerian Electricity Regulatory Commission ("NERC")'s November 2024 Factsheet on the Operational Performance of Power Plants2 , in November 2024, the average available generation capacity rose to 5,257 MW due to the increase in grid connected plants, but the average hourly generation was slightly below the performance recorded in January 2024 at 4,192 MW. The Minister of Power, Adedayo Adelabu, however disclosed intentions to foster an increase of grid generated 3 powerby150MW before the end of 2024.3
TRANSMISSION
The national grid was reported to have collapsed at least 11 times by November 2024, primarily due to deteriorating infrastructure, as well as the activities of 5 bandits and vandals, among other factors. It was also reported that between January to August 2024, vandals had destroyed about 63 transmission towers across Nigeria.
These activities continue unabated as the year comes to a close. In October 2024, 2 transmission towers along the 330kV Shiroro-Kaduna transmission line were destroyed6, causing a loss of 1,200 MW from the grid. Additionally, in November 2024, 3 transmission towers along the 330kV Lokoja-Gwagwalada transmission line were destroyed byvandals7.
DISTRIBUTION
In January 20248, the commercial performance of Distribution Companies ("DisCos") indicated a billing eciency of 80.39%, collection eciency of 72.76%, and revenue recovery performance of 61.73%. By September 20249 , billing eciency had improved to 82.36%, with collection eciency at 75.99%, and revenue recoveryperformance at 73.45%, reflecting an overall improvement in commercial performance.
As of January 202410, there were 13,231,807 registered customers, of which only 44.48% were metered. A total of 98,502 complaints were received, with 63.03% pertaining to metering11. ByAugust 2024, the number of registered customers had increased to 13,345,393, with 45.72% metered, reflecting an improvement over the course of the year. In August 2024, 106,022 complaints were received, with 44.26% related to metering.
GRID PERFORMANCE
Over the past decade, the national grid has reportedly collapsed over 100 times, with 2024 recording the highest number of collapses in the last four 12 years. This instability stems largelyfrom the mismatch between energy supply and demand13, often resulting in grid failure. Several factors across the value chain contribute to this imbalance. For hydropower plants, weather conditions can significantly impact output14. Thermal plants face challenges such as inadequate gas supply and frequent vandalism of gas pipelines15. Additionally, DisCos contribute to these imbalances through load rejection as a result of faultypowerlines and refusal of customers to payforenergyconsumed16.
Despite eorts to expand the generation capacity of grid-connected plants, the lack of eective corresponding infrastructure improvements across the value chain will continue to impede progress. Without substantial upgrades to transmission and distribution networks, increasing supply without the capacity to conveypowerto end-users will likelylead to furthergrid collapses.
While some stakeholders advocate forthe full privatization of the Transmission 17 Company of Nigeria ("TCN"), there are concerns about whether privatization of the TCN would improve grid performance. This scepticism is driven by the underperformance of the DisCos over the 10 years following privatization, which has necessitated substantial Federal Government intervention to sustain operations.
THE CASE FOR DECENTRALIZATION
Industry experts and leaders increasingly support decentralizing the national 18 grid as a viable solution to alleviate the pressure on the fragile grid. This approach aligns with the ongoing decentralization of the Power Sector, presenting opportunities for States to attract investments and establish competitive markets. Decentralized power systems, particularly in strategic locations such as industrial clusters and residential estates, could transform the Sector. States can leverage lessons from the National Electricity Market to implement robust screening and transparent bidding processes, ensuring that new market entrants possess the financial and technical expertise necessary for sustainable operations. Furthermore, new players entering the market without the burden of legacydebt can focus on building resilient infrastructure to guarantee reliable supply and profitability. A decentralized grid would also reduce transmission losses, primarily due to the proximity of generation to end-users.
TECHNOLOGICAL AND SECURITYINTERVENTIONS
The eective implementation of Supervisory Control and Data Acquisition (SCADA) systems across the national grid could significantly enhance grid stability19. SCADA systems assist in real-time fault detection, load imbalance management, and overall grid performance monitoring, addressing one of the primarycauses of grid collapse20.
However, the success of any of these systemic or structural reform hinges on addressing persistent security challenges, including vandalism and banditry. Without robust measures to deter these activities, resources will continue to be diverted towards repairing damaged infrastructure rather than adopting advanced technologies. Allegations of contractor complicity in vandalism to secure repaircontracts furthercomplicate the issue21.
RECOMMENDATIONS
Enhanced security measures are critical to safeguarding the nation's power infrastructure. The Federal and State Governments must establish comprehensive security protocols to protect critical assets from vandalism and sabotage. Perpetrators of such acts should face stringent legal consequences to serve as a deterrent to others
States should also prioritize the development of a decentralization framework to alleviate the burden on the national grid. This involves fostering decentralized power systems and competitive markets, underpinned by transparent and ecient licensing processes. Such an approach will enable States to attract investments and create sustainable energy solutions tailored to theirunique needs.
Significant investments in transmission and distribution infrastructure are essential to support increased generation capacity. Without robust infrastructure to convey power from generation points to end-users, the challenges of grid instability and collapse will persist. The eective adoption of advanced technology is imperative for grid performance optimization. The deployment of SCADA systems across the grid will address key factors contributing to grid instability.
1. Implementation of the ElectricityAct
In August 202422, Nigeria unveiled the draft NIEP-SIP, which was developed in consultation with stakeholders and industry experts in furtherance of Section 3 of the ElectricityAct 2023 (as amended). The Plan aims to promote the integration of renewable energy, enhance energyaccess, and improve liquiditywithin the Sector.
B. Transition to State Regulation
Following the enactment of the ElectricityAct 2023 (as amended), NERC had, as of December 2024, issued Orders transferring regulatory oversight of the Power Sectorwithin Enugu, Ekiti, Ondo23 , Imo24 , Oyo25 , Edo, Kogi and Lagos States to theirrespective State regulators.
Significant developments have since followed the commencement of this transition. Orashi ElectricityCompany Limited was reportedlygranted an interim licence26 bythe Imo State ElectricityRegulation Commission forthe generation, transmission and distribution of electricitywithin Imo State in July2024.
In October 2024, marking a historic milestone under the Electricity Act, the Enugu Electricity Distribution Company ceased operating in Enugu State. All operations were transferred to its subsidiary, MainpowerElectricityDistribution Limited, which successfullyobtained an interim distribution license from the Enugu State Electricity Regulatory Commission. Similarly, in Ondo State, the Ondo State Electricity Regulatory Bureau assumed full regulatory control and issued an interim license to BEDC ElectricityOndo Limited, signaling the end of operations byBenin ElectricityDistribution Plc (BEDC) within the State.
In November 2024, the Ekiti State Government announced the issuance of 14 electricity licenses to investors in power generation, distribution, and metering, aimed at addressing the State's significant electricitydeficit.
Meanwhile, the Lagos State Government took notable steps towards State-level regulation by enacting the Lagos State ElectricityBill 202430 into law in November 202431. Also in November 2024, the Lagos State Government invited bids for four gas-fired power plants with a combined capacityof 4,000 MW to tackle the substantial energydeficit within the State32. In December 2024, NERC issued an Order transferring regulatory oversight within Lagos State to the Lagos State Electricity Regulatory Commission33. The transition process is expected to be finalized bythe end of the first half of 202534.
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