Zooming into Energy Generation in Nigeria…


Energy generated in Nigeria declined by 6.6% in Q3-17 from 88074MWh in Nov-17 to 88074MWh in Dec-17. The reasons are not far-fetched as gaspowered thermal stations account for most of the electricity generated. According to the NBS, an average of 94,627Mwh or 77.5% power was generated via thermal stations in Q4-17compared to 22.5% from hydro-power.

Generation remains inhibited by heavy reliance on gas-powered thermal plants, requiring high maintenance costs with some adverse environmental impacts. Power depends on events in the oil & gas sector which faces hydra-headed challenges of lack of cost reflective gas price, poor gas infrastructure, and frequent pipeline vandalization. Thus, over 40% of gas reserves are flared as it is more profitable due to uneconomic pricing. Meanwhile, Hydro powered turbines are prone to seasonality and weather conditions.

While recent strides such as the improved wheeling capacity of the TCN to 7000MW, the 450MW Azura Power project in Benin and the recently signed Ogun State/Private sector MOU to generate 286MW are commendable, a large-scale diversification to cleaner and renewable energy such as solar, wind, and biomass is needed to ensure more reliable electricity supply. In addition, a complete liberalization of the sector, amongst other bold policy changes, are urgently needed to drive it out of the doldrums.


United Capital Group Nigeria

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