OPINION: Electricity Sector Disorder ; Marketplace where entropy reigns supreme


Entropy is a thermodynamic quantity, often interpreted as the degree of disorder or unpredictability. Note: Electricity generation hinges on Thermodynamic principles. Electricity is seen as basic and essential infrastructure necessary for the welfare of the citizens and growth of the economy; but in Nigeria it is seen as luxury for those who can afford it.

It hurts most when people are made to pay for goods or services not consumed, such as the epileptic electricity supply. Nonetheless, you can’t give what you don’t have; so the electricity sector in Nigeria can’t give what it doesn’t have, as the electricity generation is very low— less than 5,000 megawatts for over 200milion people and the largest economy in Africa, as par GDP. I say, as par GDP, because assessing the economies of the continent on per-capita basis, South Africa remains far ahead of Nigeria. While Nigeria can claim the crown of Africa’s largest economy, there is a caveat:  South Africa is ahead in terms of infrastructure including electricity supply, as it generates about 42,000megawatts for about 60million people.

Recently, Nigerian Electricity Regulatory Commission, NERC announced 240% hike in electricity tariffs for band A customers, who are supposed to receive 20 hours of power supply per day. According to Musliu Oseni, the Vice Chairman of NERC, customers in this category will now be charged N225 per kilowatt-hour (KW/h), a significant rise from the previous rate of N66. My question is how many hours are left for the band B, C, D and E consumers from the paltry generation of about 5,000MW? I make bold to say that there is no guarantee of 20hours per day power supply to band A consumers. They should just pay, and know that ‘terms and conditions’ apply. Note: there are times when the country experiences a complete blackout due to a national grid collapse.  The crisis in the electricity sector is huge and we should declare state of emergency in the sector.

Nigeria’s power generation is mostly thermal and hydro and has an installed capacity of nearly 13,000 megawatts. For many years, authorities only manage to dispatch about 4,500 megawatts of its installed capacity. While the Per Capita power generation ranges from 3kW to 6.6kW in many African countries, the corresponding figure for Nigeria is 0.05. This is literally shameful and unacceptable. The transmission system in Nigeria electricity sector does not cover every part of the country. It currently has the capacity to transmit a maximum of about 4,000 MW which is awfully below the required national needs and it is technically weak thus very sensitive to major disturbances. In most locations in Nigeria, the distribution network is poor, the voltage profile is poor and the billing is inaccurate. A September 2023 report by NERC showed that out of the total 12,825,005 registered electricity customers in Nigeria, only 5,707,838 had meters, indicating that over 7.1 million registered customers were still subjected to the estimated billing system— otherwise known as ‘CRAZY BILLS’ (emphasis mine). In fact, the electricity sector is marketplace where entropy reigns supreme.

Adequate power supply is an unavoidable prerequisite to any nation’s development, and electricity generation, transmission and distribution are capital-intensive activities requiring huge resources of both funds and capacity. In the prevailing circumstances in Nigeria where funds availability is progressively dwindling, creative and innovative solutions are necessary to address the power supply problem.

As part of its contribution to the resolution of the problems of the electricity sector along the line of its mandate, the Energy Commission of Nigeria, ECN has been collaborating with the International Atomic Energy Agency (IAEA), and therefore, applies the IAEA Model for the Analysis of Energy Demand (MAED). ECN on applying the MAED for a 13% GDP growth rate, the demand projections rose from 5,746MW in the base year of 2005 to 297,900MW in the year 2030 which translates to construction of 11,686MW every year to meet the demand. Unfortunately, 2030 is six years away and we are still at about 5,000MW, so let us focus on generating the balance 71,496MW between now and 2030. It can be estimated that the average cost for adding a Mega Watt of electricity is US$1.5million. This demonstrates the resources required in power supply to develop and particularly industrialize any country on a sustainable manner, are large. Based on this index, it therefore can be estimated that Nigeria would have to invest a whopping US$107 billion to generate 71,496MW by 2030. The financial requirement is phenomenal.

Majority of the population rely on diesel generator leading to environmental pollution and inflation in the prices of goods and services. This poor electricity supply has been a barrier to private investment in the country.

The needs for affordable, reliable and sustainable energy have led to transformation in the way energy is generated, transmitted and distributed. It has changed from a passive one-directional system to an active, multi-directional system. In this transformation consumers can now produce, manage and own generation assets. Many households now have solar photovoltaic on their rooftops and some are owners of off-site generators such as wind turbines.

The ever-increasing population and growing demand for electricity in Nigeria has put great pressure on the existing conventional generations and there is urgent need for other alternative energy resources. Localised energy systems which have been prevalent in the UK and Europe remain the most viable solution to tackle the pressing challenges of lack of reliable, environmentally friendly and sustainable electricity supply in Nigeria.

Currently, the price of renewable energy generation is gradually reducing and thus will help to achieve better energy access. It is obvious that population growth will always be greater than the existing generation and distribution capacity. Therefore, renewable generation and storage remains the most viable option.

Localised energy system is a medium-sized electricity generation system of capacity not larger than 50MW connected to a local distribution network. Localised generations are connected close to the load which is responsible for losses reduction in the network.

Local energy systems provide electricity for different categories of customers for domestic and commercial uses. Localised energy system will encourage different groups in the society to come together and invest in energy sectors.