… commits to restoring trust, confidence, stability in NESI
…. highlights cost benefits of grid electricity at ₦206.80/kWh compared to up to ₦950/kWh for Diesel generators
… seeks to deploy smart meters to boost off-peak electricity consumption, amidst drop in demand
Oredola Adeola
Nigeria’s Power Minister, Chief Adebayo Adelabu, has reaffirmed his commitment to restoring trust and stability in the Electricity Supply Industry, with a focus on encouraging bulk users and industries to transition back to the national grid from off-grid and captive power sources.
He emphasized the significant cost advantage of grid electricity at ₦206.80 per kWh, noting that captive power production is much more expensive, with costs ranging from ₦350 to ₦400 per kWh for gas-powered systems, and soaring to ₦950 per kWh for diesel and ₦550 per kWh for petrol generators.
The Minister also announced plans to deploy smart meters to enable differential tariffs, specifically aimed at boosting consumption during off-peak periods, which have recently declined.
Chief Adebayo Adelabu, Minister of Power, made this observation in his comment on Thursday at the Board retreat of the Nigeria Electricity Liability Management Company (NELMCO), in Lagos.
According to him, despite generating a record 5155 megawatts (MWs) which is still not being taken up by industries, and the assurance of reliability of grid connection as a power source, most bulk electricity consumers are still currently on captive power plants.
The Minister lamented that the Majority of bulk electricity users, such as industries, are off the grid due to a lack of trust and confidence in the past.
According to Adelabu, “Once consumers and industries see the trust, the confidence, and the stability we are giving, they would be encouraged and reconnect to the grid for a cheaper source of power”.
He has therefore reassured his stance on the commitment of the FG to attain the threshold of a new era in power delivery with a target of 6GW by the end of December 2024 in the short term.
He also emphasised that the Federal Government is still focused on the vision 30-30-30.
Adelabu said, “By 2030, we aim to achieve 30 gigawatts in the medium term, with renewable energy constituting 30 percent and universal access in the long term, it is imperative that we align on the principles guiding our activities and the strategies driving our progress”.
He added that the government is currently using a multi-pronged approach to attain these targets for the Nigeria Electricity Supply Industry.
The Minister also mulled the idea of differential tariff for the up peak period to stimulate demands.
“Having noticed a drop in demand during the off-peak period, we plan to stimulate demand by having a different tariff during the off-peak period.
“These are some of the efforts we are looking at, especially with our smart meters,” he said.
He further urged the board members to reflect on how to embed corporate governance in driving sustainable growth in the sector.
“As we manage the liabilities of the Nigeria Electricity Supply Industry (NESI), it is imperative that we uphold the highest standards of transparency, accountability, and integrity.
“Our actions and decisions must always align with the principles that safeguard public interests, ensuring that trust is maintained and strengthened across the board”, the Power Minister said.
He also enjoined the power sector to embrace environmental, social, and governance (ESG) standards in their actions.
According to him, “Today, ESG considerations are no longer optional; they are integral to every corporate operation. NELMCO’s role goes beyond managing financial liabilities – we are also stewards of social and environmental responsibilities.
We must incorporate sustainable practices into our strategies, ensuring that our actions contribute to Nigeria’s broader goals of achieving the nation’s climate ambition and fostering social equity.
This commitment to ESG will not only enhance our reputation but also ensure long-term value creation for all Nigerians”.
He implored the board to reflect on sustainable ways to address the tariff shortfalls in the Nigeria Electricity Supply Industry while boosting the Financing Power of the sector.
“I believe tackling the tariff shortfall in the Nigeria Electricity Supply Industry requires innovative and sustainable financing solutions.
We must balance efforts at addressing the existing obligations while delivering long-term strategies that pave the way for the financial solvency sector through cost-reflective tariffs.
We need to focus on ways to help the electricity market stabilize, attract investment, and ensure that every Nigerian has access to reliable and affordable power which will drive the nation’s economic development”.
He also emphasized the need for effective leadership and board agility especially in the electricity industry.
“As leaders, our primary role is to set a strategic course, inspire our teams, and navigate challenges with foresight.
“We must be proactive and adaptable, ready to pivot in response to disruptions, whether technological, regulatory, or economic.
” A culture of continuous learning, open communication, and innovation will ensure we remain resilient and not just to survive but to thrive in an ever-changing environment,” Chief Adelabu said.
