- Hydropower plants charged N3.67/kWh in electricity market invoices for 2023.
- Hydropower has three on-grid power plants contributing to the installed capacity in Nigeria.
According to a recent report by the Electricity Market and Rates Consultants (EMRC) Limited, the cheapest sources of electricity in Nigeria are hydropower plants. The report stated that hydropower offers the most economical electricity source in Nigeria; compared to the industry average of 17.69 N/kWh (naira per kilowatt hour) from all generation plants, hydropower plants charged N3.67/kWh in electricity market invoices for 2023.
The report further showed that hydropower is a significant electricity source in Nigeria, with three on-grid power plants contributing to the installed capacity. EMRC noted that seasonal changes and operational factors influenced the 1,316 megawatts (MW) output recorded in the fourth quarter of 2022.
However, the Nigerian Electricity Regulatory Commission’s (NERC) first quarter 2023 report showed that the share of total quarterly generation from hydropower plants decreased compared to the fourth quarter of 2022 due to limited water availability during the dry season. “There was a decrease in hydropower contribution to the energy mix from 31.10% (2,912.47GWh) in 2022/Q4 to 25.35% (2,713.43GWh) in 2023/Q1. The decrease is consistent with expectations regarding Nigeria’s energy mix. Energy generated by hydropower plants is limited by water availability from January to July,” NERC stated.
The EMRC report highlighted the risks posed by developing grids within states as they may lose out on getting cheaper electricity from hydropower plants, recommending that policymakers and stakeholders in the Nigerian Electricity Supply Industry consider each state’s socioeconomic characteristics when developing strategies and regulations for market involvement.