By Omono Okonkwo
Whether Nigeria will ever have stable and affordable electricity has been debated among stakeholders within and outside the country. Despite numerous efforts, the power sector in Nigeria remains highly deficient. Two primary reasons contribute to this ongoing issue: substantial debt in the value chain and insufficient infrastructure to meet the growing demand.
* High level of debt
The Nigerian power sector is burdened with long-standing or legacy debts incurred by operators over the years, which have not been fully paid despite several interventions. This financial strain hinders the sector from investing in necessary infrastructure and improvements. According to Energy Economist Dan D. Kunle, the sector needs a consistent supply of funding to expand the entire network, including generation, transmission, and distribution. However, this expansion cannot happen until the existing debts are cleared.
* Infrastructure deficiency
Nigeria’s infrastructure is currently inadequate to meet the rising electricity demand. As the population grows and more buildings and businesses are developed, the demand for power increases. Unfortunately, the infrastructure has not kept pace with this growth, even with alternative supply from renewables – leading to frequent power outages and unreliable electricity supply.
* The cost of power
Kunle emphasizes that many Nigerians do not fully understand the cost-intensive nature of the power sector. He asserts that power will neither be available nor affordable until there is a widespread understanding of how the sector operates. While renewable energy sources like solar power offer some relief, they cannot rapidly develop a country like Nigeria, which still struggles with industrialized power access. Therefore, the focus must remain on expanding grid power through gas and hydropower.
* The importance of a looped electricity system
A reliable electricity distribution system is crucial for ensuring constant power supply. The simplest setup, a radial feed, delivers electricity through a single line.
If any part of this line fails, everyone connected to it loses power. In contrast, a loop feed, more reliable and commonly used in commercial and industrial areas, connects customers to a loop tied to the main power source at two points.
This setup allows electricity to flow in one direction, controlled by switches. If maintenance is needed or a fault occurs, the switches can be adjusted to change the direction of the electricity flow, ensuring that power still reaches customers through an alternate route.
Kunle suggests that adopting a loop system across Nigeria would prevent grid collapses. Prioritizing commercial clusters for a loop system would ensure that grid-connected businesses do not suffer losses from constant grid failures.
* Funding the power sector
The challenge remains: where will the funding come from? In April 2024, Nigeria’s Minister of Power, Adebayo Adelabu, stated that the country needs about $10 billion annually for ten years to fix the on-grid power sector.
Some stakeholders admit that extensive analysis and technical consultations have been conducted to understand the cost of fixing Nigeria’s power sector. Beyond financial investment, Nigerians must shift their mindsets and habits, especially those who believe that grid electricity should be free.
Access to power is not cheap and will never be cheap in Nigeria. Reliable electricity is integral to economic growth; without it, human capital cannot be fully harnessed.
* Clearing debts and ensuring compliance
For the sector to function efficiently, all operators need their debts cleared. Distribution companies (DisCos) require funding to invest in new and improved infrastructure, while the Transmission Company of Nigeria (TCN) needs liquidity to invest in the transmission network.
Bill payment defaulters must be removed from the network until they settle their debts, regardless of their status or influence. This strict enforcement is necessary to prevent further debt accumulation and ensure fair access to electricity.
* Overcoming socio-political barriers
Nigerians must look beyond religious and tribal differences when implementing policies to enable growth in the power sector. Unified efforts are essential to bring about the changes needed for a stable and affordable electricity supply.
(Mrs. Omono Okonkwo is Head of Operations for The Electricity Hub (TEH)
