The Federal Government has revealed that over 40 per cent of Nigerian electricity consumers are currently enjoying over 20 hours of regular and stable electricity across the nation.
Minister of Power, Chief Adebayo Adelabu disclosed this while reviewing the activities of the Ministry of Power in the last one year on the eve of the October 1 independence celebration.
Adelabu attributed the achievements to the radical and bold steps that were taken by the ministry with the support of President Bola Tinubu as part of his renewed hope agenda to galvanise the economy.
He said one of the major and significant achievements of his ministry within the last one year is that “Today, we are generating over 5,500 megawatts of power”.
He said the ministry is working to improve on this record, by the end of the year, as power supply constitutes one of the campaign promises of President Tinubu.
In a statement made available on Sunday by the Ministry, Adelabu emphasized the need for Nigerians to know that stable electricity in any economy cannot be overemphasized and for most developed nations, the first thing they got right was to achieve reliable, functional, and affordable electricity, especially for their industries, businesses, institutions, and households.
“This is why you see great economies like Korea, China, Europe, and North America industrialized today. Their stability in electricity supply has been instrumental to their economic growth and industrial development.
“That’s why we say that we must achieve this for Nigeria as a country. We need to achieve the requisite economic growth and industrial development. Our dear president, President Bola Ahmed Tinubu, included this in the Renewed Hope Agenda as a major electoral policy to Nigerians. In his New Year speech on the 1st of January, 2024, he emphasized the need for the country to have stable, functional, and reliable electricity to drive other critical sectors. This is the only way we can achieve the required economic growth and industrial development. In fact, none of the critical sectors can function optimally without electricity stability and functionality.
“Therefore, our vision is to ensure that we provide households, businesses, and institutions (educational and health institutions as well as industries) with stable electricity supply. This will enable them to power their activities, improve their capacity, and create more jobs.
“In a country like South Korea, industrial giants like Samsung, Hyundai, and LG didn’t just become global giants overnight. They were supported by the government through the provision of stable and reliable electricity for their operations. This is the vision we have for Nigeria. At the end of the day, a large proportion of our population will be electrified, industries will enjoy stable electricity, and this will increase production and create employment for our people”, the Minister said.
The Minister added that the mandate of the ministry is to engender national development through the formulation of appropriate policies, the establishment of proper structures and institutions to ensure or achieve stable, functional, reliable, and affordable electricity supply to households, businesses, institutions, and industries.
“This will enable us to achieve the desired economic growth and industrial development. We also provide general oversight to ensure the overall well-being of the Nigeria Electricity Supply Industry (NESI). This is the mandate of the Ministry.
“However, we are not doing this alone. We work in conjunction with our agencies. These include: Nigerian Electricity Regulatory Commission (NERC); Transmission Company of Nigeria (TCN); Rural Electrification Agency (REA); Nigerian Electricity Management Service Agency (NEMSA); Nigerian Bulk Electricity Trading Company (NBET); National Power Training Institute (NAPTIN); and Nigerian Electricity Liability Management Company (NELMCO).
“These are agencies under the Ministry of Power who are like our foot soldiers.
“Apart from the agencies under the Ministry of Power, we also operate through 27 power generating companies, including hydroelectric power companies and thermal companies (which are gas-powered generating companies). We also have 11 Electricity Distribution Companies across the country that operates.
“In generation, we rely on the generating companies. In transmission, we rely on the government-owned Transmission Company of Nigeria (TCN), which is a direct agency under the Ministry of Power.
“In distribution, we rely on the 11 distribution companies that we have across the country.
“We also work in conjunction with some international development agencies like the World Bank, the African Development Bank, GIZ, USAID, and so on. These are multilateral institutions that support the Ministry of Power”, Adelabu said.
He continued: “This administration was inaugurated on May 29, 2023. However, ministers were appointed on August 21, 2023. We are just a bit over a year old in office.
“Upon resumption, we had an installed generation capacity of 13,000 megawatts, but we were only producing, transmitting, and distributing about 4,000 megawatts of power to the entire country.
“This was quite low and unacceptable given our population and level of economic activities. Therefore, we were determined to improve the situation.
“At that time, there was epileptic supply. Almost all customers, both residential and commercial, could not be guaranteed 12-15 hours of supply. Additionally, the adoption of renewable energy was skeletal in terms of solar or wind sources of energy.
“Between then and now, which is about a year, there has been significant improvement. Today, our installed capacity is over 14,000 megawatts of power due to the addition of the newly commissioned Zungeru hydroelectric power plant and improved capacity of some of the existing power plants.
“Moreover, the major achievement is the fact that today we generate over 5,500 megawatts of power, we transmit and distribute it, and over 40% of customers today enjoy over 20 hours of regular power supply across the nation. You can see that there is a significant improvement between when we came in and now, which we intend to improve further”, he said.
Reflecting on how this feat was achieved, Chief Adebayo said: “In the first three months, we engaged in full stakeholder engagement. We spoke to industry operators and they diagnosed the issues. We consulted and held physical retreats with virtually all stakeholders in the power sector, including power generating companies, distribution companies, transmission companies, power contractors, multilateral agencies, and international development institutions.
“We sat in a room and discussed the issues, diagnosed them fully, and also had a couple of virtual engagements for those who could not attend even after the retreat.
“Through this process, we achieved a full diagnosis of the problems and issues in the power sector. We also developed comprehensive solutions.
“After compiling practical workable solutions, we swung into action in terms of implementation. I can tell you that there are basically five things that we did that led to the improved performance in the power sector.
“Number one is the signing into law of the new electricity act of 2023 by President Bola Ahmed Tinubu in June 2023. This achieved two things: Decentralization of the electricity/power sector, whereby subnational governments can now play a role in the sector. This means states and local governments can participate in generation, transmission, and distribution. Previously, we had a centralized system with the Electricity Company of Nigeria (ECN), the National Electricity Power Authority (NEPA), and the Power Holding Company of Nigeria (PHCN). This new act gave power to subnational governments to be able to participate in the power sector, which is more like having a distributed system rather than a centralized system.
“Liberalization of the sector, which means beyond government, we are able to attract the private sector to also participate in the Nigerian Electricity supply industry. This new act achieved decentralization and liberalization of the sector.
“The second thing we did was to put in place a comprehensive policy for the sector, which was not there before. The Power Sector Reform Act (PSRA) that has been there since 2013 is already outdated. What we did was to put together, through a lot of hard work with all the industry stakeholders, the National Integrated Electricity Policy and Strategic Implementation Plan.
“This gave us more like the Bible for the sector. It highlights and answers questions of what are the roles and responsibilities of each of the stakeholders, how do we engage with each other, what are the structures, systems or market, and the liquidity profile that we actually intend to achieve in the sector. So we have put this together and it is waiting for approval in the Federal Executive Council by the end of this month.
The third thing was to look at the market, tariff, and liquidity because the bane of many sectors is in the commercials. If the pearson is not right, it is not likely that the operations would be right. So we looked at it and we felt that for this sector to perform optimally, there must be an adjustment to the pearson model that was in place. This is why we achieved a partial cost-reflective tariff.
“We made some adjustments in tariff policy that actually ensure that a portion of the customers pay tariffs that are cost-reflective, reflecting the cost of producing power, while the other portion of the customers continue to enjoy government subsidy. That’s one of the reasons why we are able to improve liquidity in the sector, and we can see the improved performance of the distribution and generating companies.
“They are now incentivized and they know that once they’re able to supply a minimum of 20 hours of electricity to a particular feeder, they can upgrade it or migrate them to Band A customers and charge cost-reflective tariffs, which is why we also call it a service-reflective tariff. You cannot charge that tariff unless you are able to deliver a minimum of 20 hours of power supply. The feedback we have been getting from the market suggests that a good number of customers have started enjoying over 20 hours of supply of electricity.
“The fourth thing we did was to work on infrastructure, upgrading and enhancing transmission and distribution infrastructure. The first thing we mentioned there was the Presidential Power Initiative, which we all worked on as a fulfilment project.
“We signed an acceleration agreement to ensure that we accelerated the implementation of that particular project. Within a year, we completed the pilot phase of this project, which involved importing 10 power transformers and 10 power mobile substations. They have arrived, we have installed them, and we have commissioned them.
“Therefore, the electricity stability that we enjoy today is not by accident. It’s because of all these transformers and mobile substations that we commissioned and installed.
“Secondly, we identified uncompleted projects of the Transmission Company of Nigeria upon resumption. There were over 100 uncompleted projects involving substations and power lines. We moved into these projects to assess how much of them we could complete within a short period of time, and we’re making good progress in this regard. We also had a number of transmission expansion projects being supported by the World Bank and the African Development Bank. We are trying to complete all of these projects, and they are also contributing to the stability of the transmission network.
“The Niger Delta Power Company also did a lot of work when it comes to transmission and distribution infrastructure, and this has been reflected in the stability of transmission and distribution.
“There is the issue of the meter gap that we have. We all know that out of almost 13 million customers that we have in the industry, over 7 million customers are still without meters and are on estimated billing. We said this is not the way to go. We must correct this, which is why President Bola Ahmed Tinubu set up the Presidential Metering Initiative, which has the mandate of installing over 10 million meters within the next five years, at least 2 million meters on a yearly basis. We are making progress on this. The funds are being provided, and we will soon go into the acquisition of these meters. This would reduce the meter gap.
“We have also liberalized the meter market, allowing DisCos to encourage customers to buy their meters and have them installed. This is why we have seen an increase in the meter penetration in the industry today.
“Still on metering, the World Bank is also supporting us in the Distribution Recovery Program (DISREP), whereby they are procuring and installing 1.8 million meters for us. The contract for about 1.5 million meters has already been awarded, and within the next two months, these meters will start arriving. These are the programs that we have to upgrade and enhance the infrastructure across the transmission and distribution segment of the power sector value chain.
“Lastly, there is the energy transition plan. We are using energy transition as a two-way sort. First is to expand our energy access expansion to ensure that we take electricity to the conserved, especially the rural dwellers and the rural businesses. And again, we are using it as a tool to transition into cleaner forms of energy. These are the two things that we use this for.
“Let me also inform you that, we have some isolated institutions like educational and health institutions, such as teaching hospitals and some military formations, which are actually using mini-grids to complement their supply. Those that are on the national grid are making it a metered connected mini-grid by installing solar grids to these institutions”.
He also announced a special electricity supply to the nation’s universities and other institutions, to avoid incessant cut of power supply to them and for them to continue to enjoy low tariff.
“We have a program which we call the Nigerian Electrification Program, whereby we have about 34 universities to be energized through solar energy sources. I think we have completed about 13 now, and they are almost due for commissioning. We have plans to do this for some of the teaching hospitals and some of our military formations.
“The agency of the ministry that’s in charge of this is the Rural Electrification Agency, and I can tell you that by the time we roll out the data of the underserved communities where we have installed these mini-grids, you’d be amazed.
“We have electrified over three million people through these mini-grids across the rural areas nationwide. We also have what we call the solar home systems that we give to each household, providing them with some point of light, some point to charge their phones, and some points for farming. We have distributed these to millions of Nigerians and continue to do so. We have the support of the World Bank and the AFDB to ensure that these programs are successful”.
