The Nigerian Electricity Regulatory Commission (NERC) released its Q3 2024 performance report, showing a 16% increase in power generation capacity within the Nigerian Electricity Supply Industry (NESI). This growth aligns with Section 34(1e) of the Electricity Act 2023, which mandates NERC to ensure the safety, security, reliability, and quality of electricity production and delivery to consumers.
Operational Performance Overview
NERC’s quarterly reports are essential for assessing the Nigerian power sector. The Q3 2024 report focuses on key operational parameters such as power generation capacity, load factor, plant availability, and the generation mix of 28 grid-connected power plants. Additionally, the report covers the stability of the national grid, offering insights into frequency, voltage regulation, and overall grid reliability.
In Q3 2024, NERC observed improvements in various performance parameters, reflecting operational efficiency gains across the industry. These improvements help drive economic growth, enhance industrial development, and support Nigeria’s broader goals for a stable electricity supply.
Generation Capacity Increases Significantly
The report reveals a 16.04% increase in power generation capacity. Power plants across the grid collectively produced an average of 5,100.90 megawatts (MW), up 705.13 MW from the 4,395.77 MW recorded in Q2 2024. This growth marks significant progress as operators work to meet the country’s rising electricity demand.
Nineteen of the 28 power plants saw their power generation capacities increase in Q3 2024 compared to the previous quarter. Operational improvements, better plant maintenance, and optimised site performance have contributed to these gains.
Breakdown of Power Plants
The 28 grid-connected power plants comprise a diverse energy mix, including:
- 19 gas-powered plants
- 5 hydro-powered plants
- 2 steam-powered plants
- 2 gas/steam hybrid plants
Given the country’s abundant natural gas resources, Nigeria’s energy sector continues to rely heavily on gas-fired plants. Hydro plants provide critical support, particularly in water-rich regions. Including steam and hybrid gas/steam plants adds flexibility to the energy mix, helping to strengthen grid stability.
NERC’s Role in Grid Monitoring and Stability
NERC actively monitors the national grid’s technical stability and reliability. The Commission tracks key parameters like frequency and voltage to ensure grid balance and avoid disruptions. In Q3 2024, NERC identified improvements in the grid’s ability to maintain stable frequency and voltage levels.
Grid instability, typically caused by mismatches between power generation and demand, has historically plagued Nigeria’s power sector. However, coordinated efforts between the Transmission Company of Nigeria (TCN) and power generation companies (GenCos) have started to yield positive results in mitigating these issues.
Load Factor and Generation Mix
The report highlights additional metrics like load factor and generation mix. A higher load factor indicates that power plants operate closer to their maximum capacity. Operators optimised load distribution across the national grid in Q3, improving overall efficiency.
Gas remains the dominant fuel source for Nigeria’s power generation, but stakeholders are increasingly focusing on diversifying the energy mix. Renewable energy sources, particularly solar and wind, are gaining traction as part of efforts to reduce dependence on fossil fuels.
Challenges and Opportunities in Nigeria’s Power Sector
Despite progress, the power sector continues to face several challenges. The electricity demand far outstrips the available supply, leaving many regions underserved. Transmission and distribution infrastructure limitations further exacerbate these issues as ageing facilities struggle to handle increasing power output.
NERC has worked closely with the Transmission Company of Nigeria (TCN) and distribution companies (DisCos) to address these bottlenecks. While improvements are underway, funding shortfalls and regulatory barriers slow the pace of progress.
Nevertheless, the Q3 2024 report points to opportunities for growth in the sector. Nigeria’s growing natural gas supply enhances the prospects for further expansion in gas-powered electricity generation. Additionally, government-led initiatives to increase renewable energy capacity offer new investment opportunities and pathways to reducing the country’s reliance on gas.
Looking Ahead: NRC’s Regulatory Focus
NERC focuses on improving reliability, efficiency, and sustainability in Nigeria’s electricity supply. In line with the Electricity Act 2023, the Commission prioritises promoting transparency, enhancing technical and commercial performance, and safeguarding consumer interests.
A top priority involves strengthening the sector’s financial health. Issues related to tariffs, revenue collection, and payment discipline have long hindered the electricity market’s economic stability. To address these challenges, NERC has implemented various regulatory reforms to support more effective revenue collection and ensure market participants meet their obligations.
NERC also aims to expand access to electricity in underserved rural communities. While grid-connected power plants continue to expand output, off-grid solutions present a viable alternative in remote areas. The Commission supports developing decentralised power generation options in regions with impractical or costly grid extension.
NERC’s Q3 2024 report marks a positive milestone for Nigeria’s electricity sector. The 16% increase in available generation capacity demonstrates that efforts to improve plant performance and grid stability are beginning to pay off. As a result, power availability has grown, though challenges remain in bridging the gap between supply and demand.
NERC’s ongoing efforts to regulate the sector, promote investment, and drive infrastructure improvements will be key to future growth. Increasing the sector’s financial viability, diversifying the energy mix, and expanding access to electricity will help ensure long-term sustainability and economic development.
By maintaining its commitment to strengthening the Nigerian electricity industry, NERC plays a pivotal role in shaping its energy future.