Improving power supply in Nigeria

The power sector in Nigeria continues to face significant challenges despite efforts to improve electricity supply across the country. According to Nigeria's Minister of Power, 40 per cent of Nigerians currently have access to over 20 hours of electricity, highlighting the progress that has been made in recent years. However, the country still grapples with issues such as national grid collapses, insufficient generation capacity, and the need for modernization to meet the growing demand for power. George Etomi, Founder at George Etomi and Partners, shared insights on the key challenges and potential solutions during a recent interview on CNBC Africa. One of the recurring issues in Nigeria's power sector is the vulnerability of the national grid to collapses, as seen in recent events where the grid experienced multiple failures within a short period. George Etomi identified two key factors contributing to grid instability. The first is the availability of gas, which is essential for power generation. Shortages of gas can lead to a decrease in power generation capacity, putting strain on the grid. The second factor is oversupply, which can also destabilize the grid due to its outdated infrastructure. The lack of modernization, including supervisory control and data acquisition systems, hinders the grid's ability to handle increased power levels efficiently. While efforts are being made to increase power generation capacity in Nigeria, with discussions of ramping up to 8,000 to 12,000 megawatts, the challenges faced by the national grid remain a significant obstacle. George Etomi emphasized the need for substantial investments, estimating that hundreds of billions of dollars are required to modernize the grid effectively. Decentralization and diversification of power sources, such as renewables like solar and wind, could also help alleviate pressure on the grid and improve electricity access in remote areas. By incorporating off-grid solutions and mini-grids, Nigeria can enhance power distribution and provide more reliable electricity to consumers, particularly industries that rely on steady power supply for their operations. Despite the increase in revenue from high-end customers, the distribution companies (discos) in Nigeria still face financial challenges, with a significant portion of the revenue being allocated to repayments and operational costs before reaching the discos. While overall revenue has improved, attracting new investments remains a hurdle due to unclear policies and ineffective implementation. To attract investors with the necessary capital to drive infrastructure development in the power sector, Nigeria needs to create a conducive environment with well-defined policies and frameworks that ensure a return on investment. Without the alignment of policies with market demands, the sector may struggle to secure the investments needed to address the growing energy needs of the country. In conclusion, Nigeria's power sector is at a critical juncture, requiring substantial investments, policy reforms, and modernization to meet the increasing demand for electricity. The challenges of grid instability, limited generation capacity, and financial constraints facing the sector call for a coordinated effort from the government, private sector, and international partners to drive sustainable growth and improve power supply across the country.