Experts in the energy sector have identified infrastructure and transmission bottleneck as one the constraints in the sector and called for the upgrade of grid and the decentralization of grid and mini-grid across regions in Nigeria.
The expers noted that upgrading the grid infrastructure and setting grids at the subnational level is expensive.
This position was canvassed at the Nextier’s 106th Power Dialogue, where stakeholders in energy sector underscored the transformative role of the National Integrated Resource Plan, NIRP, and the National Integrated Electricity Policy and Strategic Implementation Plan, NIEP-SIP, in reshaping Nigeria’s power landscape through strategic, data-driven, and least-cost planning.
The session, hosted by The Electricity Hub and titled “Power in Pages: Future Outlook of NIRP/NIEP-SIP,” was moderated by Ani Nkem Nnenne, Legal Consultant and Nextier Associate.
The Power Dialogue featured a panel of experts, including Adedayo Olowoniyi, Chief Technical Adviser, CTA, to the Honourable Minister of Power; Frank Edozie, Team Lead, United Kingdom-Nigeria Infrastructure Advisory Facility, UKNIAF, and Ezuma Okoronkwo, Head of Gas Business, STATA Power Utility Ltd.
In his opening remarks, Olowoniyi stated that the NIRP is a comprehensive document designed to facilitate end-to-end energy planning. He emphasised that one of its core objectives is to ensure electricity generation at the lowest possible cost to make power more affordable.
Olowoniyi explained that the Integrated Resource Plan, IRP, provides a framework for effectively planning the energy mix and last-mile electricity delivery. He credited Frank Edozie and the UKNIAF team for initiating the IRP, noting that the project began before the current administration took office.
As Chief Technical Adviser, Olowoniyi evaluated the document, programme, and supporting software and expressed confidence in the IRP’s direction and content, stating that it aligned closely with his strategic vision.
Olowoniyi emphasised the importance of adapting the IRP in the subnational electricity market. He cautioned that state-level electricity markets should avoid replicating the development model of the national market, where planning for generation, transmission, and distribution has often lacked coordination and clarity.
The CTA stated that the IRP should enable the least-cost generation, transmission, and distribution at the state level. He further explained that the NIEP-SIP is a foundational document mandated by the Electricity Act of 2023, with its development process commencing one year after the Act was signed into law.
He noted that a key principle of the policy is that the government recognises it cannot single-handedly drive the electricity sector, calling for private sector participation. He also emphasised the need for active private sector involvement to catalyse investment and support the efforts required to achieve 100 per cent energy access for Nigerians.
He stated that the IRP includes an implementation plan; however, there have been some delays due to the need for system planning on the transmission segment. He explained that understanding the future configuration of the transmission network is essential, and this update must be incorporated into the IRP.
Olowoniyi noted that the current version of the IRP will serve as both a guiding process and a foundational document to drive the energy value chain across the country.
He added that this resource will be utilised by the Nigerian Electricity Regulatory Commission, NERC, and the Independent System Operator, ISO, emphasising that effective planning is a key responsibility of the system operator.
He said: “For instance, when a new generation plant is proposed, the system operator must know its intended location to ensure proper integration into the grid.”
Speaking on Mission 300, which is part of the ministry’s effort to begin implementing the IRP, Adedayo noted that Mission 300’s key component focuses on the sustainable viability of utilities. He revealed that evaluating utilities in Africa shows that about 95 per cent are not sustainable.
According to him, African governments have attempted to control tariffs without adequately addressing how to implement targeted subsidies for those who genuinely need them.
He pointed out that the Nigerian subsidy system is excessively open-ended, which he described as heartbreaking while further disclosing that in reviewing monthly subsidy allocations, the primary beneficiaries in Nigeria are those who can afford to pay for electricity, while those with lower electricity consumption often receive no electricity at all—thus, they do not benefit from the subsidy.
He noted that no country can sustain a subsidy with this system that favours the highest electricity consumers, stating that this will be addressed using the NIRP and NIEP-SIP.
On his part, Edozie stated that the IRP is transforming the approach to energy access delivery by prioritising structured planning and least-cost considerations, emphasising that customers ultimately bear the cost of the power delivered.
The UKNIAF team lead noted that one key reason for having a plan is the recognition that not everything will go as expected. A well-established plan ensures stakeholders are aware and can take corrective action when deviations occur. He emphasised the importance of creating platforms like the Power Dialogue to discuss the plan, highlighting that the IRP is not a static document but one that must evolve over time.
Edozie stated that the current version of the document, NIEP-SIP 2024, will be updated once the Transmission Company of Nigeria (TCN), finalises the transmission expansion plan, adding that the update is expected to occur within the year. He urged all stakeholders in the energy sector to use the NIEP-SIP document extensively and take a proactive approach to identify gaps, shortcomings, and opportunities for improvement.
The UKNIAF team lead added that another key value of the NIEP-SIP is its role in facilitating reliable and least-cost energy access. This objective extends beyond the capabilities of any single government, particularly in a country as large and complex as Nigeria.
According to Edozie, the NIEP-SIP is designed to attract private investors by enabling them to invest in specific segments of the electricity network, with the expectation of earning a return on their capital and making a profit over a period of twenty-five to thirty years.
Furthermore, he noted that the plan includes provisions for subnational states to extract relevant data from the IRP based on their geographic context, apply state-specific policies, and modify the data to suit their local electricity market needs.
“These updated datasets can then be reintegrated into the national IRP framework, ensuring that the NIRP reflects a collective and comprehensive view of the entire country, ” he said and explained that the IRP recommends segmenting the national grid into four zones, each comprising several distribution companies, DisCos, based on their primary energy sources.
Edozie added that once this segmentation is implemented, it will become easier for states within each zone to optimise power access and secure more affordable electricity through subgrid arrangements tailored to their specific regional needs.
Citing the IRP and NIEP-SIP as providing clear policy signals, Okoronkwo stated that the frameworks are moving the energy sector in the right direction. He noted that “these frameworks offer a comprehensive view of the current state of the power sector and outline the necessary steps to improve energy access across the country.”
Okoronkwo stated that the policies outline clear objectives, including a 36 per cent renewable energy integration target by 2030. He added that this clarity gives investors confidence, assuring them that well-defined and achievable goals have been established. He emphasised that the country must explore decentralised and digitalised energy solutions within the power sector, including smart and mini-grids.
On the Electricity Act, which allows states to develop their power sector policies in alignment with NERC guidelines, he noted that this approach will be an enabler for the outlook and performance of the NIEP-SIP.
According to him, a key constraint to the policy is the implementation challenge, which could discourage investors. He explained that when investors lack confidence in the ability of regulators and stakeholders to implement and execute policies effectively, it creates a significant challenge. Another key constraint, he stated, is the infrastructure and transmission bottleneck.
“There is a need to upgrade the grid and promote a decentralised grid and mini-grid across regions because upgrading the grid infrastructure and setting grids at the subnational level is expensive. This phased approach will help achieve grid expansion, which the NIEP-SIP addresses,” he stressed.
Okoronkwo highlighted that financial and economic risks also pose a significant constraint. He pointed out that the power sector has a debt exceeding four trillion naira, with half of this debt originating from legacy issues and the other half from last year’s government consumption.
He also mentioned shortfalls in collection efficiencies by the distribution companies (DisCos), which has resulted in a loss of approximately N71.5 billion. Okoronkwo added that when the financials are not in order, it becomes a critical problem.
He explained that such issues discourage investors, as their primary concern is a return on investment, except in cases where the investments are from impact investors, whose returns are measured by the positive impact on lives.
Okoronkwo noted that Nigeria has not fully implemented the cost-reflective tariff, and the government continues subsidising electricity. He emphasised that, despite the development of robust policies and regulations, these have not yet been fully implemented.
According to him, this remains a constraint on the future outlook of the NIEP-SIP, stressing that these issues must be addressed for progress to be made.
Highlighting several frameworks, Ani stated that over ten energy frameworks, policies, and action plans have been developed since 2001, noting that the issue in Nigeria is not the lack of laws or policies but rather the absence of effective implementation plans.
The legal consultant stressed that every policy should accompany a robust implementation plan. She explained that a policy alone would not add 1MW to the grid, emphasising that implementation strategies will drive energy access goals.
She emphasised the importance of using data, stating that every decision in the power sector should be based on data. She also highlighted the need to secure support from stakeholders, as the government alone cannot guarantee electricity.
The 106th Power Dialogue underscored that stakeholders must prioritise effective implementation plans, attract private investment, address infrastructure challenges, and utilise data to ensure the successful execution of the NIRP and NIEP-SIP for sustainable energy access in Nigeria.
