Sterling Bank Plc and Stears Data in a new report on Nigeria’s electricity crisis, advocated the adoption of renewable energy as a viable solution to complement domestic and commercial supply, Oluchi Chibuzor presents excerpts of the report
As Nigeria looks to several sources to end its intractable power supply crisis, stakeholders are working out solutions that if adopted by the federal government, will help solve the problem.
As part of their contribution towards solving Nigeria’s electricity crisis, Sterling Bank Plc and Stears Data recently released a report, which advocated the adoption of renewable energy as a viable solution to complement domestic and commercial supply
The report entitled, “Powering Nigeria: How solar energy can become a sustainable electricity alternative,” is divided into five parts namely: Nigeria’s electricity problem; the impact of Nigeria’s problem; the case for solar energy in Nigeria; limitations to solar adoption in Nigeria, enabling Nigeria’s energy market and conclusion.
The report showed that despite the privatisation of Nigeria’s electricity industry, the country still has one of the lowest electrification rates in the world as 43 per cent of its population have no access to grid electricity, an indication “that 85 million Nigerians are not connected to – and cannot receive electricity from – the Nigerian transmission grid.”
The report in a comparative electrification rate analysis noted that Ghana has electrification rate of 84 per cent, Kenya 70 per cent, South Africa 85 per cent, sub-Saharan Africa 47 per cent, India 98 per cent, Europe 100 per cent, global 90 per cent and Nigeria 55 per cent. It noted that while Nigeria’s electrification rate is above the sub-Saharan Africa regional average of 47 per cent, it lags significantly behind its peers across the continent and the global average.
According to the report, Nigeria’s grid-supplied electricity is grossly insufficient, thereby making the country to have the largest electricity access deficit in the world. Nigeria’s electricity supply value chain is broken into generation, transmission and distribution. The entire value chain used to be controlled by a state-owned facility, National Electricity Power Authority (NEPA) from 1972 to 2005, until the Power Holding Company of Nigeria (PHCN) was formed to transition to unbundling and privatising components of the power supply companies and form successor companies that will handle distinct parts of the value chain: generation, transmission and distribution with the aim of creating smaller, nimbler and more efficient corporations.
“However, unbundling NEPA into specialised, privately owned companies left the state company’s legacy of deteriorating infrastructure, energy losses, energy theft and non-cost reflective tariffs in the sector intact. And while the new structure was intended to address these problems, underlying issues have kept the sector in the same spot—or moved it backwards as some might argue,” the report said. The report concluded that, “the Nigerian electricity sector is stuck in an unproductive cycle.”
According to the report, Nigeria does not generate enough to meet its energy demand. The current generation potential is around 12,522MW with average output of 4,000MW. With estimated demand between 8,000MW and 17,000MW, there is a shortfall of at least 4,000MW.
Under transmission and distribution, the report noted that, “Only a small fraction of the generated energy actually gets to the end user. Installed transmission capacity or the maximum amount of electricity that can be transmitted under ideal conditions is 8,100MW, and the peak transmission has been 5,459MW.
“Further, only a quarter (3,100 MW) of our current generating potential reaches the end user, signs of a highly …….