According to a report by Arise TV, in a strong push for reforms, Nigeria’s Minister of Power, Chief Adebayo Adelabu, on Tuesday advocated for the full commercialisation of the country's electricity supply industry.
Speaking at the ongoing Nigerian Oil and Gas (NOG) Energy Week in Abuja, Adelabu highlighted the staggering costs Nigerians bear on fuel and generator maintenance, amounting to nearly N20 trillion annually, compared to about N1 trillion spent on grid electricity.
Adelabu emphasized that achieving a sustainable and efficient power sector requires substantial investment, particularly in the domestic gas market. He pointed out that the power sector needs more than five times its current revenue to achieve a 70% gas-powered electricity generation target.
“No matter how expensive grid power seems, it is still cheaper than self-generation using petrol or diesel generators,” Adelabu noted, referencing a recent study. He argued that commercializing the power sector would unlock significant financial resources, reducing the heavy reliance on self-generated power.
The minister revealed that presidential approval has been granted to resolve the legacy debts owed to generation companies and gas suppliers, which he believes will incentive continued service delivery. “Settling these debts 100% will go a long way to incentive generation and gas companies to continue to render their services,” Adelabu stated.
He elaborated on the financial disparity, noting that while Nigerians spend N1 trillion on grid power, their expenditure on generators, diesel, and petrol nears N20 trillion annually. "Even if just a quarter of that is directed to the official grid, we are talking about incremental revenue of N5 trillion," he explained.
Adelabu stressed the importance of restoring confidence in the national grid, asserting that grid power remains the most cost-effective source of electricity. He compared the costs, stating that Band ‘A’ customers pay about N206 per kilowatt-hour for grid power, while gas generation costs N290 per kilowatt-hour, petrol generators N450, and diesel up to N950 per kilowatt-hour.
“The grid is still the cheapest, most efficient, and least costly for our productive activities,” Adelabu affirmed. He urged all stakeholders to support the development of a reliable national grid.
The minister also highlighted Nigeria’s potential in renewable energy, noting the substantial growth in this sector over the past decade. He mentioned the successful completion of the $550 million Nigeria Electrification Project and discussions to bring in utility-scale solar energy sources, projecting 3,000MW from solar alone.
Adelabu outlined the vision of the Nigeria Energy Transition Plan to achieve 30GW by 2030, with a mix of 70% thermal (primarily gas) and 30% renewable energy. He called on investors to develop the country’s gas production to meet these targets without compromising export obligations.
Furthermore, Adelabu mentioned the introduction of a cost-reflective tariff for the most served grid-tied customer segment and the presidential approval to clear legacy debts as measures to ensure adequate liquidity and attract investment in the power sector.
“Investing in renewable energy helps reduce carbon emissions, enhance energy security, and support economic development,” he stated, highlighting the $750 million DARES project aimed at providing electricity to 2.5 million Nigerians through solar home systems and mini-grids.