Electrical power is essential in today’s homes, businesses, and manufacturing facilities. In Nigeria, as in the rest of the world, we rely heavily on it. However, the development of Nigeria’s electricity market has been fraught with challenges and opportunities that have far-reaching effects.
Let your mind wander to a time when the lights came on, the fridge beeped to life, and your gadgets charged without a hitch. Electricity makes possible these routine but important tasks. However, there have been a lot of extremes in Nigeria’s use of electricity over the years. Recent years have seen a general upward trend in the average amount of electricity used, but this development needs to be placed in a broader context.
Using electricity is about more than just charging our electronics; it’s a major driver of economic expansion. Increased electricity use benefits the economy as a whole by creating more jobs and raising wages for everyone. It’s essential to our progress and success.
What, though, is driving the decline in Nigeria’s energy consumption per capita, despite the country’s rising population? In what ways has energy consumption been slowed down? Could issues with electricity, ageing facilities, and money all fall into this category?
It is crucial to look for solutions to these issues. Increasing our energy consumption is possible through a variety of means, such as, but not limited to, developing our power sector, embracing renewable energy sources, and fostering energy efficiency.
But that’s not all. Theft and fraud involving electricity are another issue that needs investigation. How do these strategies influence electricity consumers and suppliers? So, what can be done to rectify the situation and make the power grid fairer for all users?
Indeed, more investigation is needed into these intriguing issues.
Nigeria’s Electricity Consumption Trends
Nigerian electricity use has changed significantly in recent years. Let’s examine the numbers to understand this shift.
Nigerians are using more electricity, according to recent statistics. After 2,953.880 MWh in September 2022, the country reported 3,302.380 MWh in December 2022. This rise indicates a rising population demand for electricity. Planning our future requires knowing our past. Nigeria’s electricity use has been both prosperous and poor. In September 2015, when energy demand was highest, we reached a record 4,456.000 MWh. A record low of 1,300.000 MWh in June 2008 highlights the challenges of meeting energy needs. These numbers are more than they appear. They measure the nation’s energy consumption and reflect our daily lives. Regular updates from the Central Bank of Nigeria show us how the energy market is changing.
Why is this data important? It helps us understand electricity use and its importance. Our increasing average consumption shows our growing dependence on electricity for home lighting and industry power.
Factors Contributing to Dwindling Energy Consumption
Nigeria’s electricity consumption has increased, but our low energy consumption per capita must be addressed. This dilemma shapes our nation’s energy landscape due to several factors.
Limited Electricity and Clean Cooking Fuels
The electricity access gap is a major reason we use so little energy. Our World in Data reported that only 60% of Nigerians had electricity in 2018, leaving a large portion of the population without power. Only 10% had access to clean cooking fuels like natural gas or electricity, worsening our energy deficit. Many Nigerians still cook and heat with wood and charcoal due to this lack of access. These fuels contribute to energy scarcity and public health issues due to their low energy efficiency and environmental and health impacts.
Poor Infrastructure, Frequent Blackouts
Our power generation and transmission infrastructure is also important. Power shortages in Nigeria cause frequent blackouts and grid collapses. Our electricity generation capacity is 13 GW, but only 4 GW is available. The transmission network has weaknesses and congestion, resulting in 15% energy losses. These inefficiencies reduce energy access and power reliability.
Economic Issues and Industry
The economy and energy consumption are linked. The COVID-19 pandemic, low oil prices, insecurity, and policy uncertainty have hurt the economy. In 2020, our GDP growth rate was -1.8 per cent, slowing industrial activity, as an energy consumer. Manufacturing, a major energy consumer, struggles with low productivity, high costs, and low competitiveness, reducing energy use. These economic struggles affect energy consumption and national development.
Improving Nigeria’s Energy Consumption
While Nigeria struggles with energy consumption, action is needed. We need proactive solutions to enable widespread energy access and use. Increasing energy consumption requires modernising our electric infrastructure. Constant power outages and energy waste are unacceptable. Nigeria must reliably generate 13 GW of energy to meet rising demand.
Upgrades to power plants and networks are essential infrastructure investments. The sector has untapped potential if energy theft and inefficiencies are addressed. Reforms and regulatory frameworks must be strengthened to provide affordable electricity to all Nigerians. New energy sources could be crucial for Nigeria. Due to its reliance on fossil fuels, particularly oil and gas, our energy infrastructure is more vulnerable to price fluctuations and environmental issues. Renewable energy sources like solar, wind, hydro, and biomass produce cleaner, longer-lasting results. Investment in renewables improves energy reliability and connects previously unconnected areas. These renewable resources can boost energy efficiency and reduce our carbon footprint.
Energy consumption can be improved by increasing efficiency and reducing waste. Energy-saving LED light bulbs, solar water heating, and insulation upgrades can make a big difference. Energy efficiency, waste reduction, and smart technology implementation should also be priorities. These changes reduce energy costs and grid load.
Industry energy demand remains a major global factor. Increasing energy efficiency requires manufacturing investment, productivity, and competitiveness. This includes providing stable, low-cost energy to businesses. Along the way, creativity is crucial. Spending on R&D, especially for green technologies, could change energy production and use. Investments in advanced energy storage, grid management, and energy-saving appliances can pay off.
A Tale of Two Nations: Contrasting Energy Landscapes
To understand Nigeria’s energy challenge, compare it to the US. The differences are staggering, showing our nation’s potential for improvement. Energy consumption per capita is the biggest difference. The average American uses 88,352 kWh of electricity annually. In 2019, Nigeria’s per capita consumption was 113 kWh, far below the global average of 3,127 kWh. American energy consumption is 780 times higher than Nigerian consumption. This stark difference shows Nigeria’s energy potential.
The energy mix is another major difference between Nigeria and the US. The US has made significant energy diversification efforts, while Nigeria relies heavily on fossil fuels, particularly oil and gas. Nuclear power generates 20% of the US’s electricity. Nuclear power adds a unique dimension to the U.S. energy mix, producing high energy output with low greenhouse gas emissions.
Nigeria, however, is vulnerable to price fluctuations and environmental issues due to its fossil fuel dependence. However, nuclear power’s role in the US suggests that adding it to Nigeria’s energy mix could boost diversification and sustainability, allowing the country to transition to cleaner and more sustainable energy solutions globally.
Despite the differences, this comparison gives Nigeria hope. Our low energy consumption per capita allows for growth and development. We can improve millions of Nigerians’ lives by improving our energy sector, diversifying our energy sources, promoting energy efficiency, and exploring nuclear power.
Nigeria’s energy consumption improvement is difficult, but not impossible. By learning from global leaders like the US and adapting solutions to our unique circumstances, we can ensure that every Nigerian has reliable, sustainable, and affordable electricity.
Unlocking Nigeria’s Energy Potential
Looking at Nigeria’s energy landscape, are we underusing our energy consumption potential? The stark difference in energy consumption per capita between Nigeria and developed nations like the US shows that Nigeria is clearly underutilising its energy consumption. Several factors cause underutilisation.
Nigeria’s power sector has generation capacity issues, blackouts, and grid collapses. With a 13 GW electricity generation capacity, only 4 GW is available on average. These inefficiencies limit electricity availability to households and businesses and slow economic growth.
A large portion of Nigerians lack electricity. Only 60% of the population had electricity in 2018, and only 10% had clean cooking fuels. The use of wood and charcoal for cooking reduces energy efficiency and harms the environment and health.
Economic challenges like the COVID-19 pandemic, low oil prices, insecurity, and policy uncertainty have slowed industrial activity in Nigeria. The energy-intensive manufacturing sector has low productivity, high costs, and low competitiveness.
Several strategic steps are needed to address Nigeria’s energy underutilisation:
Expand and Improve the Power Sector: Nigeria needs significant investments in power generation, transmission, and distribution infrastructure. This includes reducing power losses, increasing generation capacity, and improving grid reliability. Diversify the Energy Mix: Solar, wind, hydro, and biomass must be used to reduce fossil fuel dependence. These sources can provide clean, reliable electricity to rural areas without grid access.
Promote Energy Efficiency: LED lighting, solar water heaters, and better building insulation reduce energy waste and boost efficiency.
Encourage industrialisation and innovation to increase energy demand: Incentives for industries to adopt cleaner, more efficient technologies can boost energy use and economic growth.
Nigeria’s energy journey is at a crossroads. The obstacles are significant but manageable. Nigeria can increase energy consumption, boost economic growth, and improve citizens’ lives with strategic planning, investments, and sustainability. Optimise energy use for a brighter, more energy-efficient future.
Bridging the Chasm: Nigeria’s Electricity Demand vs. Supply
With its growing population and economy, Nigeria faces a major electricity supply and demand issue. The electricity demand-supply gap illustrates the scale of this challenge.
Power generation infrastructure in Nigeria cannot keep up with rising electricity demand. The demand-supply gap is huge, with electricity consumption often far below population and income expectations. This disparity causes frequent power outages, hurts economic growth, and aggravates citizens.
This gap is partly due to rapid population growth and the large number of Nigerians without reliable electricity. Between 2009 and 2020, the World Bank predicted a five-fold increase in electricity demand, and by 2035, it is expected to rise 16.8-fold.
Forecasting electricity demand is difficult, especially in a fast-growing economy like Nigeria’s. Several factors cause the problem.
Nigeria has one of Africa’s largest populations and is growing rapidly. In such a dynamic environment, estimating future electricity needs becomes harder. Industrialisation and urbanisation increase electricity demand. Accurate demand forecasts require urbanisation rate and scale predictions. Then, Nigeria’s industries drive electricity demand. Industrial activity can significantly affect electricity consumption, making predictions difficult.
Nigeria’s electricity sector needs large power generation investments to close the demand-supply gap. The nation’s generation capacity is insufficient, causing power shortages that hinder economic growth.
As mentioned, investments should focus on expanding power plant capacity and introducing cleaner energy sources like renewable energy and nuclear power. To reduce losses and efficiently deliver power to consumers, transmission and distribution infrastructure must be improved.
Allegations of Electricity Theft and Fraud by Discos
Electrical theft and fraud plague Nigeria’s power sector more subtly than its obvious symptoms. This hidden issue affects generators and users, threatening our energy distribution network. Taking electricity means not paying for it or using it illegally. It worsens Nigeria’s power shortage and reduces electricity distributor profits (Discos). It’s shocking that 95 million Nigerians lack electricity despite these illegal actions.
There are many ways to steal electricity, but a few are common. Consumers often bypass their meters to hide their electricity use. Power thieves can steal power through unauthorised hook connections to the power grid. Dishonesty has serious financial consequences. Discos lost N97 billion in 2021’s first three months to electricity theft. The Transmission Company of Nigeria (TCN) reports that theft and technical inefficiencies waste over 25% of energy transmitted to Discos. Electricity theft is difficult for Discos and customers. Discos struggle to detect and stop theft, preventing them from investing in customer service and technology. Metering and anti-theft devices put more strain on these businesses’ budgets.
Then, Nigeria’s electricity distribution companies (Discos) have been accused of fraud and consumer mistreatment in recent years. Overestimated billing is a major complaint among Nigerian electricity consumers. Several real-life examples demonstrate consumer challenges. Customers who use less than 40 units of electricity per month report monthly bills of 480 units. Such practices force consumers to pay for unused electricity, sometimes for long periods. Despite living in similar homes, consumers receive very different bills. The same two-bedroom flat may be charged N25,000 a month despite having limited electricity, while another consumer pays less than N2,500. Such disparities raise the possibility of unfair billing practices. Nigerian electricity consumers are mostly unmetered and pay estimated bills. Some discos’ field marketers collect monthly payments from these consumers without meters or accurate billing.
The NERC regulates Nigeria’s electricity sector. To combat fraud, NERC has established estimated billing guidelines. These guidelines ensure electricity billing transparency, fairness, and accuracy. If customers think they were overcharged, NERC lets them dispute their bills. Consumers can avoid controversial bills during dispute resolution. NERC requires Discos to meter all customers by certain dates. Discos cannot be penalised for not providing meters until these timelines expire.
Despite these regulations, fraud allegations persist, calling into question regulatory oversight and the need for stricter enforcement.
The Path Forward: Ensuring Fair Practices and Reliable Electricity
A way forward for Nigeria’s electricity sector addresses Discos and electricity fraud while ensuring equitable access to reliable electricity for all.
Discos must bill customers accurately based on consumption through transparent billing. Resolve discrepancies and overestimated billing quickly, and let customers dispute unfair charges. Compliance with NERC’s metering requirements is crucial. Discos must speed up metering all customers. This ensures accurate billing and empowers consumers to manage their electricity usage. NERC is crucial to electricity regulation. The commission should reinforce guidelines and punish dishonest Discos. Regular audits and compliance checks help maintain accountability.
The NERC must be proactive in oversight and enforcement. They must regularly evaluate Discos’ metering and billing compliance. Inform stakeholders and the public about the electricity sector performance with performance reports. They must improve customer protection by making billing disputes and fraud reporting easier. Accounting accurately protects consumers from financial hardship and builds trust in the electricity sector. Customers can better manage their consumption with accurate billing information, encouraging energy efficiency. Customer protection ensures that all consumers are treated equally, regardless of socioeconomic status. It empowers them to assert their rights and seek justice for unjust practices.
Improving Nigeria’s energy consumption, fighting fraud, and improving electricity access requires collaboration. The government must prioritise power sector investments, infrastructure modernization, and private sector investment and innovation policies. Consumers can demand fair treatment and conserve energy by learning about their electricity rights and responsibilities. Private sector players, including Discos, should see customers as partners in a more efficient and reliable electricity sector, while local communities can organise and advocate for their electricity needs.
Fairness, accountability, and reliability are key to Nigeria’s electricity sector. Addressing Discos and electricity fraud, enforcing regulations, and encouraging stakeholder collaboration can help Nigeria create a brighter energy future where every citizen has affordable and reliable electricity.
