It has become a matter of great concern that Nigerians nationwide have been experiencing distressingly frequent electricity power disruptions, resulting in immense difficulties for businesses, unbearable heat for families, and hindered provision of essential services.
Gaining insight into the causes of these consistent blackouts is of utmost importance in effectively dealing with this arduous predicament.
The recent decline in electricity supply in Nigeria has been attributed to gas constraints by both the Nigerian Federal Government and the Transmission Company of Nigeria.
Similarly, months ago, the government had also cited gas shortage as the reason for the reduced electricity supply by the Niger Delta Power Holding Company (NDPHC) to distribution companies.
Naija News understands that Nigeria heavily relies on 26 hydro and gas-fired power plants for its electricity generation.
Despite the privatization of the sector in 2013, the available electricity generation capacity has remained between 3,000MW and 5,000MW for a population of over 200 million.
Surprisingly, even after ten years of privatization, the sector has failed to improve, despite the government spending N3.348 trillion on electricity subsidies, as per the latest data from the Nigerian Electricity Regulatory Commission. Furthermore, the country plans to allocate an additional N1.6 trillion for electricity subsidies in 2024.
In spite of the substantial amount of money being spent on the power sector, Nigeria continues to face numerous challenges such as insufficient investment, inadequate enforcement of electricity policies, regulatory uncertainty, limitations in gas supply and transmission systems, as well as significant shortcomings in power sector planning in recent years.
According to the third quarter report of the Nigerian Electricity Regulatory Commission (NERC) in 2023, the constraints related to gas supply remain a major obstacle for the country’s national grid.
This situation persists despite Nigeria’s vast gas reserves, which amount to 208.83 trillion cubic feet, representing 33 per cent of Africa’s total gas reserves of 620TCF, as stated by Gbenga Komolafe, the Chief Executive Officer of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
Similar to other sectors in Nigeria, the power industry faces various bottlenecks that hinder its growth.
What The Government Is Doing
In regards to this issue, the special adviser for strategic communication and media relations to the Minister of Power, Adebayo Adelabu, Bolaji Tunji, addressed the matter on Monday.
He stated that the federal government is taking action to resolve the gas constraint challenge faced by GenCos.
Tunji mentioned that the government has already initiated discussions with stakeholders to tackle these challenges, which also includes the settlement of debts owed to GenCos.
“The Minister is doing everything to resolve the challenge, including payment of debts owed to Generation Companies and other stakeholders within the value chain.
“I can assure you that the Minister is tackling the gas shortage challenge to generation plants,” he told Daily Post.
Stakeholders’ Submissions On Trending Power Shortage In Nigeria
When contacted to speak on the developments, the Managing Director and Executive Secretary of the Association of Power Generation Companies (APGC), Joy Ogaji, expressed her lack of knowledge regarding any involvement of the federal government in addressing the gas shortage problem with GenCos.
Nevertheless, Ogaji acknowledged the possibility of the government taking measures to tackle the gas shortage issue that is impacting the Nigerian Electricity Supply Industry, NESI.
She emphasized the importance of establishing a strong contractual framework between the government and GenCos, which includes reliable guarantees and prompt payment from off-takers, as a potential solution to the challenges faced by the country’s power sector.
“It is possible they are engaging the GenCos on a firm contractual regime with bankable guarantees and full payment from off-takers,” Ogaji told journalists.
Kunle Olubiyo, the President of the Nigerian Consumer Protection Network, criticized the government’s position regarding the recent decline in electricity supply.
He argued that the power sector is currently grappling with a financial crisis.
“It is a liquidity issue; I don’t think it is because of gas shortage. I have said before that the government needs to stop electricity subsidies in the power sector if we must achieve efficiency.
“Electricity subsidies payment is made to GenCos and Electricity Distribution Companies for services they don’t offer to Nigerians”, he said.
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