As utilities face the mounting challenges of aging infrastructure, increasing demand, and evolving sustainability mandates, the need for smarter, more efficient capital planning is more pressing than ever.
Simultaneously, one seemingly can’t go a day without seeing a new, awe-inspiring headline about the power that artificial intelligence is newly bringing to the world.
The unending darkness permeating Nigeria today unarguably, was the mistake of 2013 when majority stakes in the electricity distribution companies (DisCos) were sold to private investors as part of larger efforts to improve electricity supply, which was hitherto, disrupted by constant power failure across the country.
According to an energy analyst Mike Owhoko, “Unfortunately, after 12 years of practical operations, these private investors have turned out to be technically incompetent with severe illiquidity challenges that weaken their capacity to perform, demonstrate competence, and deliver electricity satisfactorily to customers in line with policy and public expectations. Worse still, there is nothing suggestive that the DisCos can improve in performance and efficiency, translating into a burden for Nigerians, in the absence of government’s interference.”
By their poor conduct and performance, the DisCos have undermined the intention and objective of the federal government’s electricity reforms which was aimed at strengthening the power sector through private sector participation for delivery of efficient and quality service.
The reforms which started with the enactment of the Electric Power Sector Reform Act 2005 (EPSRA), led to formation of the Nigerian Electricity Regulatory Commission (NERC) and creation of the Power Holding Company of Nigeria (PHCN). The PHCN was later segmented into Generation, Transmission and Distribution, from where the DisCos were created, he said.
The reforms were essentially necessitated at the time by constant power failure induced by poor condition of the network of power assets, including moribund facilities and equipment together with government’s poor handling and management of the electricity sector.
These challenges were identified as obstacles impeding efficient and regular supply of electricity to consumers, leading to eventual sale of six GenCos and 11 DisCos to private investors.
So far, the DisCos have failed to inspire public confidence, as they often attribute their failure to inherited obsolete and unviable equipment, a defence mechanism evidently too weak to attract public sympathy. Inability of the DisCos to identify from the onset, the depth of facility decay before agreeing to take up responsibility for the job, exposes the gaps in their technical knowhow. And failure to replace most of the moribund equipment and facilities is a confirmation of their poor financial health, a factor that should have been activated for their disqualification.
But the above challenges in the distribution space notwithstanding, Nigeria is witnessing a routine transition in energy industry infrastructure deployment which is expected to provide the guarantee for enhanced electricity supply.
A new report on the sector shows a number of hurdles may have been including partly and significantly addressing the gas supply challenge as well as distribution inefficiencies, which had hobbled the growth of the sector.
The report by Olaniwun Ajayi said, “In 2025, Nigeria’s power sector will likely experience a duality of progress and hurdles. While advancements in generation, grid infrastructure, and regulatory reforms offer optimism, persistent challenges around gas supply, distribution inefficiencies, and funding limitations will need to be addressed for sustained growth.”
The report said Nigerian National Integrated Power Project (NIPP) and other initiatives, particularly in renewables were projected to yield higher capacity, with solar positioned for growth as Nigeria pursues its Renewable Energy Master Plan (REMP).
According to Ajayi, “This shift toward renewables could be bolstered by collaborative projects like the African Development Bank’s planned $1 billion support and USAID’s pledged funding for clean energy, expected to drive investments in solar hybrid mini-grids and standalone systems, especially in underserved rural areas.
“As a result of these developments, Nigeria presents a compelling investment opportunity for both domestic and international investors which will increase generation capacity, improve transmission and distribution infrastructure, and enhance overall system reliability.”
He said infrastructure improvements were anticipated through large-scale investment in transmission and distribution networks, notably, the construction and rehabilitation of thousands of kilometres of transmission lines, which were expected to enhance the efficiency and reach of the national grid, reducing losses and boosting reliability.
The new Supervisory Control and Data Acquisition (SCADA) system, unveiled in 2024, promises to bring improved grid stability and management in 2025, contributing to a more resilient energy system.
Also, Nigeria’s continued engagement with the West African Power Pool (WAPP) reflects a strategic effort to integrate the national grid into regional energy systems, facilitating cross-border electricity trade.
This integration not only enables more balanced power distribution but also positions Nigeria as a key player in regional energy stability. The North Core Project under the WAPP is expected to be completed by 2025 and bring power to schools, clinics and businesses in Nigeria.”
The report said the establishment of the Nigerian Independent System Operator (NISO), expected to be completed by early 2025, marked a significant step towards a decentralised electricity market.
By transferring system and market operation functions from the Transmission Company of Nigeria (TCN) to NISO, the report said Nigeria will potentially see enhanced efficiency in system operations, with a focus on generation scheduling, transmission management, and market regulation.
It said, “In 2025, decentralisation is anticipated to make energy access more inclusive, especially in rural and underserved areas. States with established markets are expected to create targeted incentives to attract private investment, expand renewable energy projects.
“The state-level control over electricity markets will be key in making electricity more accessible and affordable for Nigerian communities, thereby boosting economic development and enhancing the overall quality of life.
“By establishing independent power markets, states can implement tailored policies, streamline regulatory processes, and incentivise the development of localised power generation and distribution solutions. This decentralised approach has the potential to accelerate rural electrification, stimulate economic growth, and empower communities.”
Essentially the report notes that the potential unbundling of the Nigerian Bulk Electricity Trader (NBET) will lead to a more mature, competitive electricity market in Nigeria, enabling direct, bilateral trading between Generation Companies (GenCos) and Distribution Companies (DisCos), thereby allowing for transparency in electricity pricing.
“The market driven approach is expected to incentivise investments in power generation, as GenCos will have the ability to negotiate rates that reflect actual supply and demand dynamics.
“For the power sector, unbundling of NBET means more stable revenue streams, reduced dependency on government subsidies, and a financially healthier environment for growth.”
In its 2024 power wrap-up and 2025 outlook, it stated that 2025 will likely see increased power generation through continued investments and partnerships.
Mini-Grids Deployment To Accelerate Energy Efficiency
Also, the Rural Electrification Agency (REA), is upbeat that scaling up mini-grid technology and deployment will help to accelerate energy efficiency and access to communities in Nigeria.
This was the opinion expressed by the Agency’s managing director, Abba Aliyu, during the inauguration of 550kwp interconnected mini-grid in Bakin Ciyawa and Kwande communities in Qua’an Pan local government area of Plateau State.
At the event, Aliyu, stressed that the initiative will not only provide power for the residents of the communities, but also give them access to reliable, clean energy to power their homes and businesses.
Aliyu stated that the commissioning was part of the Interconnected Mini-Grid Accelerated Scheme (IMAS), which was established to accelerate the development of Nigeria’s mini-grid market and provide clean, renewable energy to underserved communities.
Through the scheme, he said the Agency aimed to reach 125,000 beneficiaries across Nigeria, across the six geo-political regions, with the collaboration of development partners, including German Cooperation, European Union (EU), and GIZ.
According to him, the implementation and scaling of mini-grids across the country will also help to tackle energy poverty, improve the standard of living, and support socio-economic growth.
With Bakin Ciyawa having a 390 kwp system, and Kwande, a 160 kwp out of the 550 kwp, Aliyu, who was represented by Executive Director, Rural Electrification Fund (REF), Doris Uboh, explained that together, these systems will provide clean and sustainable electricity to over 3,500 households and countless Micro, Small, and Medium Enterprises (MSMEs).
He said the reliable electricity will unlock new economic opportunities, support local businesses, and improve access to key services such as education and healthcare.
WAliyu stated, “The socio-economic impact of these projects is already being felt and will continue to grow. Access to reliable energy is crucial for businesses to thrive, particularly MSMEs in Bakin Ciyawa and Kwande.
“With consistent power, local businesses will be able to reduce operational costs, extend working hours, and improve productivity, resulting in an overall boost to the local economy.
“In terms of sustainability, we are committed to ensuring that these systems are not only operational today but continue to serve the communities well into the future. For this, we urge the residents to take ownership and safeguard the infrastructure by protecting it from vandalism and energy theft.
“Ensuring that the pay-as-you-go payment model and other feasible payment schemes are embraced will provide the funds necessary for ongoing maintenance, repairs, and system upgrades, the REA will continue to monitor and support the maintenance and optimisation of these mini-grids to ensure their long-term sustainability.”
Aliyu added, “Together with our Renewable Energy Service Company (RESCO) partner, we will ensure that the systems remain effective and continue to serve the communities for years to come.”
He stated that one of the most profound benefits of the solar mini-grids was the impact on the environment, stating that by replacing traditional fossil fuel-based energy sources, such as diesel generators and kerosene, the mini-grids are significantly reducing carbon emissions.
The mini-grid is expected to reduce an estimated 600 tons of CO2 emissions annually, equivalent to taking approximately 130 cars off the road or planting about 15,000 trees each year.
Aliyu said the reductions were crucial in mitigating climate change and moving towards a greener future for Nigeria. He explained that the shift to solar energy will help align with global sustainability targets, such as the Paris Agreement.
Governor Caleb Mutfwang, who was represented by the Commissioner for Culture and Tourism, Corlenus Doeyok, pledged to continually seek partnership with private organisations to give people the people of Plateau State good governance.
“We want to thank the German government, the European Union, the federal government, through the Ministry of Power, for all the support they’ve been giving to Plateau State,” Mutfwang stated.
He highlighted Plaleateu State’s Ease of Doing Business environment, stressing that the state will continue to support businesses.
Community head, Hubert Isa, described the launch of the power project as a momentous occasion. Isa said it was proof that the federal government had not forgotten the rural areas.
“The promise of providing electricity to underserved communities is now becoming a reality. This project gives us hope, and it signifies that development is on its way to our doors,” he added.
Additionally, the Rural Electrification Agency (REA) says a phased deployment of the €11 million support fund from international donors is being utilised to provide electricity supply to underserved communities in the country.
Aliyu, said the community based projects were part of the 11 million euro grant from the European Union and the German government to provide electricity for rural communities. “The total package they gave us is over 11 million euros which has been divided according to the capacity needs of each community.
More than 60 per cent of this project was donated by the EU and the German government.
Under the present government, we are energising a total of 3,700 communities but we are doing it in phases. It is going to be 100 communities per state and we are going to be infusing a total of 370MW of clean energy.
“The first phase which is going to be 25 communities per state will being 925 communities across the Federation and we will be infusing over 92MW of clean energy into our energy space. One of the most profound benefits of these solar mini-grids is their impact on the environment. By replacing traditional fossil fuel-based energy sources such as diesel generators and kerosene, these mini-grids are significantly reducing carbon emissions.
More than 20,000 communities in Nigeria are without electricity supply, Aliyu, disclosed on Monday during the inauguration of two mini-grid projects in Bakin Ciyawa and Kwande communities in Plateau State.
Aliyu, represented by Doris Udoh, the Executive Director of Rural Electrification Fund, said the projects, with combined capacity of 550KWp, were built under the Interconnected Mini-grid Accelerated Scheme (IMAS).
He said the projects would supply uninterrupted power supply to over 3,500 households and businesses.
The 550 kWp system installed in Bakin Ciyawa and Kwande will reduce an estimated 600 tons of CO2 emissions annually.
“This carbon emission reduction is equivalent to taking approximately 130 cars off the road or planting about 15,000 trees each year. These reductions are crucial in mitigating climate change and moving towards a greener future for Nigeria.”
EU Intervention In Plateau State
The European Union (EU) has started exploring the potential for establishing a hydropower generation site at Asso falls in Plateau state.
Head of Green and Digital Economy at the EU Delegation in Nigeria and ECOWAS, Inga Stefanowicz disclosed the information on Monday, in a statement.
The hydropower project, is expected to generate 2MW of electricity.
Stefanowicz said the project is part of the EU’s mandate and partnership with the state to provide clean, safe, affordable, and renewable energy sources to the people of the state, especially towards supporting sustainable agricultural practices, industry, tourism, and boosting the economy of the state.
The EU delegation paid a visit to the state to assess the Asso falls, which is in collaboration with the Federal Ministry of Power to integrate the project into Nigeria’s larger electricity market development.
“With electricity generation, we will have agriculture, industry, and tourism. That’s a very good combination,” Stefanowicz said, highlighting how these sectors could drive growth together.
She further disclosed that the EU is working with the Plateau state government and other stakeholders to evaluate the technical, financial, and environmental feasibility of the hydropower project.
“Plateau State, with its rich agricultural potential, could benefit greatly from reliable energy, boosting crop production and agro-processing,” she said.
Meanwhile, the managing director of the Plateau State Energy Corporation, Ponzing Gamde, stated that the United Nations Industrial Development Organization (UNIDO) is conducting a feasibility study to determine the potential capacity of the hydropower project.
“UNIDO is currently conducting a feasibility study here. They have done their preliminary data collection and will now come up with a design to know the potential capacity that can be generated from here,” he said.
Further highlighting the benefits of the project, Gamde said, “With this power, there will also be an improvement of cultural activities. The power will ensure activities don’t stop at certain points.”
A member of the Plateau State House of Assembly, Hon. Engr. Owen Karyit Dagogot, expressed full support for the project, saying, “This place is going to be utilised to its full potential. It is an advantage because you already have a solid ground. Foundations are openly on firm ground.”
Director of technical services at the Plateau State Energy Corporation, Sam Gyang Yakubu, spoke about the technical aspects of the project. He noted that while the dam construction typically takes time, the timeline for this project could be as short as two to three years. “Evacuation is not going to be a challenge here, based on the way we have set up the whole layout,” he said.
A representative of the Federal Ministry of Power, Dina Temitope, highlighted the national significance of the project. “For us at the ministry, we’ve had this vision 30:30, which is generating 30 gigawatts of electricity by 2030, with 30 percent of our energy needs coming from renewable sources,” he said.
Programme manager, Energy and Circular Economy, EU Delegation to Nigeria and ECOWAS, Godfrey Ogbemudia, reaffirmed the EU’s commitment to sustainability, saying, “We want to be sure that EU taxpayers’ money is fully utilised. It’s not a donation. You could transport all the power from here to any other agricultural hub where pre-processing is happening.”
Harping on the importance of continued collaboration, head of GIZ’s Sustainability Energy Access component, Eckhard Heine, said, “We are in dialogue with the National Electricity Regulatory Commission (NERC), to disseminate the information they have, so we can engage the state level effectively.”
Technical adviser at GIZ, Alexander Akolo, noted that the governor of Plateau State, Caleb Manasseh Mutfwang, recently passed the State Electricity Law, which contains areas for improvement. “We can support reviewing it (the Law) because of the support in developing other instruments like mini-grid policy for the state.”
Ogun Exploring 100MW Generation
Ogun State Government is also working to create electricity supply system that will guarantee supply sustainability without depending on national grid.
This is being make possible with the execution of a 100 megawatts power plant in Ewekoro local government area of the state.
Governor of the state, Dapo Abiodun, said the Independent Power Plant will provide 24-hour uninterrupted electricity to most parts of Abeokuta, the state capital.
He said the first phase of the project is scheduled to be ready for inauguration in the next eight weeks.
Abiodun stated this on Monday, February 17, 2025, after inspecting the 30 megawatts power plant located in Onijanganjangan, near Ewekoro in Ewekoro local government area.
The governor explained that the project was in collaboration with private sector partnership, and the first phase of the Ogun State Light Up Project.
According to him, the project is in line with his promise to provide uninterrupted power supply to major cities and towns across the state.
Abiodun stated that Abeokuta metropolis required more than 30 megawatts of power, adding that this was the first phase of the planned 100 megawatts power generation capacity.
“I have gone around and have taken note of the progress of work so far.
“I have seen the control room, I have seen the turbines and I have seen what will be responsible for ensuring that the gas is compressed.
“We have seen the gas pipelines that will be completed in three to six weeks. The gas compressor is there, and there is a diesel tank as well.
“I can assure you that once this has been achieved, though we may not be able to supply power to the whole of Abeokuta, substantial parts of the city will now enjoy 24 hours of uninterrupted power supply,” he said.
Abiodun observed that the plant, apart from using compressed gas as its main fuel, would also make use of diesel as a backup in case of disruption in the supply of gas.
The power plant, the governor emphasised, would provide constant electricity to government institutions, health facilities, government quarters, police stations, local government offices, and higher institutions.
“It will eventually cascade to private individuals and industries when the capacity is increased.
“The state decided to go into power generation, distribution, and transmission as a result of its removal from the exclusive list by the federal government.
“I want to assure that similar plants will be built in Sagamu, Ijebu-Ode and Ota.
“The Ogun House of Assembly has passed into law the setting up of the Ogun State Electricity Regulatory Commission to oversee all the activities of the power sector in Ogun State,” he said.
Earlier, the project manager, Mr. Selvin Leo, said the project was 90 per cent completed.
Leo assured that with the availability of needed materials, equipment, and commitment from the workers, the job would be completed in record time.
