By Obas Esiedesa

Despite  widespread blackouts across the country, it has emerged that only 53 per cent of the available power generation capacity in Nigeria was utilized in the past eight years due to gas supply shortages, transmission and distribution constraints, and commercial challenges.

The latest report by the Nigerian Electricity Regulatory Commission, NERC, covering a period of seven years revealed that in 2015 capacity utilization was 51 per cent while it dropped to 46 per cent in 2016. 

The figures for 2017 were 50 per cent, 2018 was 52 per cent, 2019 was 47 per cent, 2020 was 53 per cent, while capacity utilization for 2021 and 2022 was 56 per cent and 61 per cent respectively. Capacity utilization so far this year was put at 61 per cent.

NERC estimated that grid energy demand in 2020 was 17,556 Megawatts while the actual supply was 4,009MW, a mere 22.8 per cent of the energy demanded. It is projected that demand would grow to 45,662MW by 2030.

According to the commission, nine of the 26 plants in operation accounted for 72.4 per cent of the electricity generated in 2022. It however warned that the overreliance on a few power plants may pose a risk to the Nigerian Electricity Supply Industry, NESI, because downtime in any of the plants may result in grid instability.

Transmission, distribution challenges remain

On the transmission end, NERC disclosed that the Transmission Company of Nigeria, TCN, recorded more losses than was allowed with the transmission loss factor improving by just 0.81 per cent points between 2015 and 2022. It pointed out that while the allowable transmission loss factor for TCN was 7.25 per cent, in Ghana it was 3.5 per cent.

The commission, which noted that TCN needed to improve transmission efficiency, added that compared to neighboring countries the frequent system collapses (89 times) recorded between 2015 and 2023 were embarrassing.

On the distribution end, the report stated that electricity supply has been hampered by high Aggregate Technical, Commercial and Collection (ATC&C) losses including energy theft, poor infrastructure and service quality, insecurity and community restiveness, huge debt by Ministries, Departments and Agencies (MDAs) of government at various levels, low metering, poor corporate governance, and low tariff.

DisCos, NERC move to adjust tariff

Following applications by the eleven electricity distribution companies, NERC last week began the process of adjusting the Multi-Year Tariff Order (MYTO) which is expected to lead to a rise in tariff.

With a public hearing expected on the issue soon, consumers have described the process as talk shop and smoke screen been taken and concluded by NERC and DisCos”.

He expressed concern that there was still inaccurate data on electricity consumers in the country, adding that DisCos were also not making the needed capital investments into the network to improve the quality of service.

“Near zero mechanism in place for cost recovery of investment in network improvement projects funded by customers with all the previous upward review of electricity tariff in Nigeria, which is recorded to be more than six in recent times.

“There has been no corresponding increase in service delivery, power generation, power transmission, load dispatch, load evacuation and energy load utilisation in spite of incessant increases in electricity tariff in Nigeria.

“Increasingly expanding huge metering gaps: Federal Government should provide the local meters manufacturers’ access to long term single digit credit facility at low-interest rates to promote backward integration and job creation.

“Spike in the volume of arbitrary estimated billing. Appropriate gas pricing

30- 50 percent of gas produced in Nigeria should be sold in Naira in furtherance of domestic gas obligations”, he stated. 

Olubiyo observed that “at the end of the day, 100-200 percent increase in electricity tariff will not translate into improvement in overall efficiency in service delivery from upstream-to-downstream”.