On August 3, the Electricity Hub interviewed Mr. Chinedu Ogoliegbune, a Senior Policy and Research Analyst at Nextier. He offered deep insights into Nigeria’s power infrastructure and its significant challenges. His analysis underscores the urgent need for strategic investments, policy reforms, and innovative solutions to rejuvenate Nigeria’s power sector.
As it stands, Nigeria’s main energy carrier is biomass (81.25%), followed by natural gas (8.2%), petroleum products (5.3%), crude oil (4.8%), hydropower (0.4%), and others (1%).
Generation, Transmission, and Distribution: A Fragile Network
Nigeria’s power sector relies on an intricate network of generation, transmission, and distribution systems, all of which interdepend critically. According to Mr Ogoliegbune, ageing infrastructure poses a primary challenge. “The current state of our infrastructure necessitates constant maintenance and repairs to keep the electricity grid operational,” he noted. “Obsolete equipment struggles to withstand adverse weather conditions, leading to frequent interruptions in power supply.”
This outdated infrastructure hampers the grid’s reliability and fails to meet the growing electricity demand nationwide. “We see more frequent disruptions and grid load shedding as a direct consequence,” Ogoliegbune added. The inability to consistently deliver electricity affects residential and industrial consumers, exacerbating economic inefficiencies and public frustration.
Challenges in Maintaining and Upgrading the Power Grid
Mr Ogoliegbune outlined several critical challenges in maintaining and upgrading Nigeria’s power grid:
1. Financial Constraints:
“Securing capital expenditure (CAPEX) for grid upgrades presents a major challenge,” Ogoliegbune explained. “The substantial financial outlay required for these projects, coupled with the need to ensure a return on investment while providing affordable electricity, presents a difficult balancing act.”
Investors often hesitate due to the perceived risks and long payback periods associated with large-scale infrastructure projects. This financial bottleneck hinders the ability to replace outdated equipment and integrate modern technologies essential for a resilient power grid.
2. Replacing Obsolete Infrastructure:
“Many of the transmission lines, distribution lines, and generation stations we inherited during privatisation have operated for decades and are now obsolete,” Ogoliegbune said. “Replacing this ageing infrastructure demands significant investments, which are not easily forthcoming.”
Upgrading involves replacing physical components and overhauling the underlying systems that manage these components. This comprehensive upgrade is vital for improving efficiency and reducing downtime but requires substantial financial and technical resources.
3. Integrating New Technology:
Transitioning to a modernised grid involves integrating new technologies like automation systems and smart meters. “Introducing these innovations is complex,” Ogoliegbune acknowledged. “While they are crucial for improving grid operations, we must ensure they do not compromise the existing system.”
Integrating intelligent technologies can enhance the grid’s ability to manage demand and supply dynamically, thereby reducing the likelihood of outages. However, the challenge lies in synchronising these technologies with the existing, often antiquated, infrastructure without causing disruptions.
The Impact on Industrial and Economic Growth
The state of Nigeria’s power infrastructure profoundly impacts the nation’s industrial and economic growth. The inability to provide consistent 24-hour electricity significantly hampers the operations of industries and service providers. “Industries must generate their electricity, which is inefficient and expensive,” Ogoliegbune explained. “This additional cost burden ultimately gets passed on to consumers through higher prices for goods and services.”
This financial strain on businesses due to an unreliable power supply affects more than just operational costs. It stifles industrial growth and discourages potential investments. “Companies are less likely to invest in expansion or new ventures when they cannot rely on a stable power supply,” Ogoliegbune noted—this lack of investment further limits economic growth and development.
Moreover, the high cost of self-generated power creates a competitive disadvantage for Nigerian businesses in the global market. “Our industries cannot compete effectively with those in regions where electricity is more affordable and reliable,” Ogoliegbune said. This disadvantage hampers export potential and limits the nation’s overall economic progress.
Renewable Energy: A Solution to Nigeria’s Power Infrastructure Limitation
Renewable energy emerges as a promising solution in the face of Nigeria’s ageing and unreliable power infrastructure. Renewable energy, notably Distributed Renewable Energy (DRE), offers a viable path forward. DREs include sources like solar, wind, and hydropower, which can be installed at distribution sites. “DREs are essential in meeting localised energy demands, especially in residential areas,” Ogoliegbune explained. “These sources can provide a reliable power supply during peak demand times when conventional energy generation falls short.”
A practical example of DREs’ potential can be seen in residential neighbourhoods. “In areas where most people leave for work during the day and return in the evening, the demand for electricity spikes at night,” Ogoliegbune noted. “Residents switch on air conditioners, cookers, and other appliances, leading to a surge in energy consumption.” Renewable energy can bridge the gap, ensuring that energy needs are met without interruption.
Renewable energy supplements the existing power infrastructure and enhances its resilience and reliability. By integrating variable renewable energies into the transmission sector and DREs into distribution sites, Nigeria can create a more robust and sustainable power grid.
“Investing in renewable energy is crucial for modernising our power infrastructure,” Ogoliegbune emphasised. “It provides a cleaner, more efficient alternative to traditional energy sources and can significantly reduce the strain on our ageing grid.”
The Role of Government Policies in Shaping the Power Sector
Government policies and regulations play a pivotal role in shaping the development and efficiency of Nigeria’s power sector. “Favorable government policies can significantly reduce the hurdles of obtaining regulatory licenses,” Ogoliegbune explained. A prime example is the Nigerian Electricity Act of 2023, which allows states and qualified individuals to generate and distribute electricity within their regions. “This policy is designed to foster greater competition within the electricity sector,” he noted.
Competition drives innovation. “When multiple entities compete for the same customers, they are incentivised to improve the quality of their services,” Ogoliegbune said. The Nigerian 2023 Electricity Act strategically encourages such competition, potentially leading to better service delivery and more efficient power distribution.
Governmental policies can either facilitate or hinder the growth of the power sector. Favourable regulations can attract investments, streamline processes, and ensure infrastructure upgrades meet growing demands. Conversely, restrictive policies can stifle growth and innovation, making achieving a reliable and efficient power supply harder.
“The right policies can create an environment where the power sector thrives,” Ogoliegbune emphasised. The government can enhance the sector’s efficiency and effectiveness by reducing bureaucratic obstacles and promoting competitive practices.
A Vision for the Future
Addressing Nigeria’s power infrastructure challenges requires substantial investment, strategic policy reforms, and collaborative efforts among all stakeholders. Renewable energy offers a sustainable solution to bridge the gap between demand and supply, while supportive government policies can foster competition and innovation. As Nigeria continues to develop its power infrastructure, these elements will be crucial in ensuring a stable and efficient electricity supply, paving the way for industrial and economic growth.
Mr. Ogoliegbune’s insights highlight the pressing need for strategic investments and cooperative efforts to rejuvenate Nigeria’s power sector. The integration of renewable energy, supported by favourable government policies, is critical to overcoming the current limitations and ensuring a stable, efficient, and sustainable power supply for Nigeria’s future.
Mr Chinedu Ogoliegbune carefully articulated some of the critical issues affecting the Nigerian Power sector.
Micro and Mini Grid technologies need to be urgently deployed as well.
Even when the Grid infrastructure is overhauled, theft and possible transmission infrastructure destruction resulting from natural factors cannot be wholly averted.
Seamless technology such Energy Mast with reliability and resiliency can be deployed.
Such technology do not require the transmission lines and do not degrade the ecosystems along transmission network.
They are clean energy transmission network that is zero carbon.
The cost is more than 40% lesser than the conventional transmission lines installed.
Pilot projects in major cities can be deployed and it can easily be synchronized.
The Free trade zones should also enter into PPP with Power Generation companies to provide Micro Grid systems using renewable energy sources and this will reduce cost of energy and attract more manufacturing plants to such zones
The benefits that can be accrued from this is innumerable.
Thanks