In our 2023 Report, we analyzed the level of electricity deficit in Nigeria and examined various initiatives, policies, regulations, and laws aimed at leveraging renewable energy to enhance energy access. This encompassed an evaluation of the Nigerian Energy Transition Plan (NETP) and the Electricity Act 2023. We also made projections on industry and regulatory developments to watch out for in 2024. In this 2024 Power Sector Mid-Year Report ("Mid-Year Report") we provide updates on industry developments and projections for the second half of the year.
The Nigerian Electricity Supply Industry (NESI) Mid-2024
Generation
The transgenerational challenges within the NESI continue to manifest over a decade after privatization. According to a Report from the Nigerian Electricity Regulatory Commission ("NERC" or the "Commission"), the average hourly generation from grid-connected plants in the 4th quarter of 2023 was 4,433.82 MWh/h. Despite achieving a peak power generation of 5,000 MW in May 2024, a decline to 4,723.30 MW was observed by early July 2024, which is not much of a significant improvement from 2023
Transmission
Given the dilapidated state of infrastructure at the transmission level which already presents a substantial challenge in wheeling generated power across the grid, the recent surge in vandalism over the past months has severely undermined the efforts, and investments of the Federal Government in rehabilitating the Sector. According to Engr. Oluwagbenga Emmanuel Ajiboye, Executive Director of the Transmission Service Provider ("TSP"), the Transmission Company of Nigeria ("TCN") has spent more than NGN5 billion repairing vandalized infrastructure in the last five months. The increasing adoption of explosives in vandalism operations also raises significant security and safety concerns.
Distribution
Distribution continues to face significant operational and liquidity challenges. According to NERC, in the 4thquarter of 2023, the total energy received by all Distribution Companies (DisCos) was 8,198.65 GWh, while the energy billed to end-use customers was 6,432.22 GWh. Out of the NGN399.69 billion billed to customers, only NGN294.95 billion was collected. It is quite disconcerting that government Ministries, Departments, and Agencies (MDAs), along with military formations continue to contribute to collection challenges within the Sector. In June 2024, the Abuja Electricity Distribution Company threatened to disconnect 23 MDAs over outstanding bills.
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