Majority of Nigeria’s Bulk Electricity Consumers Off the Grid Due to Lack of Trust, Says Minister
Lagos, August 26, 2024 — The Minister of Power, Adebayo Adelabu, has revealed that the majority of bulk electricity consumers in Nigeria have disconnected from the national grid, citing a lack of trust and confidence in the sector. This has led many industries to rely on their own captive power plants, which are significantly more expensive than grid-supplied electricity.
Speaking at the Board retreat of the Nigeria Electricity Liability Management Company (NELMCO) in Lagos, Adelabu lamented that despite Nigeria now generating a record 5,155 megawatts (MW) of electricity, much of it remains unused due to consumers’ reliance on self-generated power.
“Many of the country’s bulk electricity users, such as industries, have opted out of the grid due to past issues with trust and reliability. They have installed their own captive power plants, which is a far more expensive option,” Adelabu stated.
According to the Minister, the cost of producing captive power is considerably higher than the grid supply, with costs ranging from N350 to N400 per kilowatt-hour for those connected to gas lines, N950 for diesel, and N550 for petrol. Adelabu expressed optimism that these consumers would eventually reconnect to the grid as the government works to restore trust and stability in the sector.
“Once industries see the reliability and confidence we are building into the system, they will be encouraged to reconnect to the grid for a cheaper source of power,” he added. Adelabu also outlined the government’s short-term goal of reaching 6GW of power generation by the end of December 2024, with a long-term vision of achieving 30GW by 2030, with 30% from renewable energy sources.
The Minister urged NELMCO board members to embed corporate governance in their operations and to embrace Environmental, Social, and Corporate Governance (ESG) principles. “Our actions must align with transparency, accountability, and integrity, ensuring that trust is maintained across the board,” Adelabu emphasized.
He further noted that ESG considerations are crucial in today’s corporate environment and that NELMCO’s role extends beyond managing financial liabilities to include social and environmental stewardship. “Incorporating sustainable practices will not only enhance our reputation but also ensure long-term value creation for all Nigerians,” Adelabu concluded.
