- Chief Adebayo Adelabu, Nigeria’s Minister of Power, has urged industries to shift from expensive captive power to the national grid to reduce costs and increase reliability.
- Adelabu announced a target of 6 gigawatts of power capacity by December 2024 and emphasised the importance of adopting ESG standards in the power sector.
Minister of Power, Chief Adebayo Adelabu, highlighted the importance of grid connectivity over captive power plants during a board retreat of Lagos’s Nigeria Electricity Liability Management Company (NELMCO).
Despite the power grid generating a record 5,155 megawatts, Adelabu noted that many bulk electricity consumers, including industries, have opted for their own costly captive power solutions due to past reliability issues.
Adelabu criticised the high costs associated with captive power, pointing out that average production costs are significantly higher than grid power. For those using gas, the price is about N350 to N400 per unit; diesel rises to about N950; and petrol, it’s approximately N550. He emphasized that the continued reliance on these expensive alternatives is financially burdensome.
To address this, Adelabu stressed the need to restore trust in the national grid. He indicated that the government’s goal is to achieve 6 gigawatts of power capacity by the end of December 2024 as a step towards the broader Vision 30-30-30 plan. This plan aims to reach 30 gigawatts of capacity by 2030, with renewable energy making up 30 per cent and ensuring universal access to electricity.
The Minister mentioned that efforts are underway to encourage bulk users to return to the grid. He believes that by demonstrating increased reliability and stability, consumers will be motivated to reconnect and benefit from cheaper power. Additionally, the government is exploring the implementation of differential tariffs to stimulate demand during off-peak periods, an approach intended to balance electricity consumption throughout the day.
Adelabu also emphasised the importance of incorporating high standards of corporate governance and environmental, social, and governance (ESG) practices in the power sector. He urged NELMCO’s board members to focus on transparency, accountability, and integrity to build and maintain trust. Adelabu underlined that adopting ESG standards is crucial for sustainable growth and achieving Nigeria’s climate goals while ensuring social equity.
In concluding remarks, the Minister called for a commitment to integrating sustainable practices into the power sector’s strategies. He stated that NELMCO’s role extends beyond managing financial liabilities to addressing social and environmental responsibilities, which are vital for enhancing the sector’s reputation and ensuring long-term value for Nigeria.