- Nigeria’s Minister of Power, Adebayo Adelabu, criticised large electricity consumers for favouring costly captive power plants over the national grid despite a record power generation capacity of 5,155 megawatts.
- Adelabu urged industries to reconnect to the national grid, highlighting that the cost of generating power independently is significantly higher than that of grid electricity.
The Minister of Power, Adebayo Adelabu, has voiced concerns over large electricity consumers opting to generate their power rather than using the national grid. Speaking at a board retreat of the Nigeria Electricity Liability Management Company (NELMCO) in Lagos, Adelabu highlighted the financial implications of relying on captive power plants compared to grid electricity.
Adelabu noted that while Nigeria’s power generation capacity has recently reached a historic 5,155 megawatts (MW), many industries still prefer to use their power sources. This preference stems from past reliability issues with the national grid, which led to many bulk electricity users being disconnected. According to Adelabu, these industries favour captive power systems despite being more costly due to their perceived reliability.
He elaborated that generating power independently is notably more expensive. For example, the cost of producing energy from gas ranges between N350 to N400 per unit, diesel costs approximately N950 per unit, and petrol is about N550 per unit. In contrast, grid electricity is generally more affordable, and Adelabu emphasised that a more stable and dependable national grid would be economically advantageous for consumers.
Despite the record figures, the Minister expressed regret over the underutilisation of the increased power generation capacity. He stressed the need for industries to reconnect to the national grid and reassured them that ongoing improvements in grid reliability would enhance consumer trust and confidence. Efforts will be made to incentivise large electricity users to return to the grid by demonstrating the cost benefits and stability of the national power supply.
In recent developments, the Nigerian Electricity Regulatory Commission has granted permits for mini-grid electricity generation to several entities, including Golden Penny Power Limited, MTN Communications Nigeria Limited, and Havenhill Synergy. These moves are part of broader efforts to enhance power supply options and encourage diverse sources of electricity generation.
Adelabu’s remarks reflect a broader strategy to address power supply challenges and improve the efficiency and attractiveness of the national grid. By making grid electricity more appealing and reliable, the government hopes to reduce the reliance on costly captive power systems and foster a more sustainable energy sector.