Power minister laments as industries shun national grid

The Minister of Power, Adebayo Adelabu, has lamented the rate at which bulk electricity consumers abandon the national grid to generate their own electricity.

Adelabu emphasised that grid connection as a power source is more reliable than captive power plants currently being used by bulk electricity consumers.

He regretted that despite generating a record 5,155MW, it is not being taken up.

The minister spoke on Thursday at the Board retreat of the Nigeria Electricity Liability Management Company in Lagos.

He said, “The majority of bulk electricity users, such as industries, are off the grid due to lack of trust and confidence in the past.

“They now have their own captive power plants in their industries which is more expensive.”

According to him, the continued use of captive power rather than grid connection is more expensive.

“The average cost of producing captive power is about N350 to N400 per kilowatt-hour for those connected to gas lines. For diesel, it’s about N950 while petrol is about N550,” he said.

He stated that efforts would be made to encourage such bulk users to return to the grid.

“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.

“We aim to attain the threshold of a new era in power delivery with a target of 6 gigawatts by the end of December 2024, in the short term, and the Federal Government is still focused on Vision 30-30-30. By 2030, we aim to achieve 30GW in the medium term, with renewable energy constituting 30 per cent and universal access in the long term. We must align on the principles guiding our activities and the strategies driving our progress,” he added.

The minister disclosed 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 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 explained.

He 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, 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,” he said.

He also enjoined players in the power sector to embrace environmental, social, and governance standards in their actions.

“In today’s world, 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,” submitted.