Grid collapse, liquidity crisis, vandalism dogged power sector in 2024

Another year; another problem is the best cliché to describe Nigeria’s power sector.

Despite its privatisation in 2023, the sector has continued to defy all regulatory frameworks and interventions to solve the lingering issues of liquidity, exploitation, grid collapse, increased generation and vandalism.

With President Bola Ahmed Tinubu riding on the horse of solving the lingering power crises once in the helms of affair and his Minister of Power, Adebayo Adelabu promising to raise the country’s power generation in short period, the reality of the sector became clear that its rot and malfeasance is way beyond what it could solve immediately.

Increased tariff for band A

To address the most jarring issue in the sector, the government introduced a tariff increase for electricity consumers that get at least 20 hours of power supply daily.

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The government hinged its decision on the skyrocketing inflation and the devaluation of naira that would hold the government on the jugular as it won’t be having the money to finance it. According to the government, its subsidy payment would have burgeoned to over N2trn if the old tariff were to be kept.

This decision saw Band A customers’ tariff increased by over 200 per cent from N68/Kilowatt per hour to N225KwH while the remaining band’s tariff would remain the same. Even though the classification was done to ensure adequate supply of power to the band and prioritise their supply, some consumers under the band have protested their inclusion in the Band A tariff due to its exorbitance and the Manufacturers Association of Nigeria (MAN) also sued electricity distribution companies and the Nigerian Electricity Regulatory Commission (NERC).

But 8 months after the increase, there is a huge probability that the tariff would be increased next year  while other bands are incorporated as the government’s subsidy payment increased to N2tr while electricity distribution companies are struggling to pay electricity generation companies, who in turn are struggling to pay their gas suppliers.

Grid collapse

2024 marked the year that exposed what is called the cosmetic surgery that was conducted on Nigeria’s electricity grid. It would be recalled that in July 2023, the Transmission Company of Nigeria (TCN) that manages the grid, celebrated over 400 days without grid collapse or disturbance. While surgery waned off in the same 2023, the collapse became persistent in the second half of 2024, which recorded 9 of the 12 collapses in the year.

This situation heightened the call for the balkanisation of the grid by governments across all levels to invest in off-grid solutions to insulate their states and domains from the incessant collapse of the national grid.

However, experts have warned that pulling out of the grid is not the answer to Nigeria’s grid collapse as the fewer the customers on the grid, the more expensive electricity cost would become as the current status quo is cheaper if the government channels adequate attention to stabilise it.

The intensity of the grid saw its collapse three times in a week putting a dent on the government’s role in the Nigerian Electricity Supply Industry (NESI).

States implementation of Electricity Act

2023 saw the signing into law the Electricity Act, a law that decentralised the regulation of the electricity sector. This means that states can now have their laws and invest in the sector without hindrance from the federal government. While most states have been churning out laws that would guide electricity generation, transmission and distribution in their domain, only eight states have applied for a licence in regulating electricity in their states including Enugu, Ekiti, Ondo, Imo, Kogi, Edo, Oyo and Lagos.

Vandalism to blackout

The implication of vandalism of electrical installations was severe in 2024. From the distribution to transmission network, it costs the country more than N10bn to fix.

According to the TCN, 128 transmission towers were vandalised this year alone and it costs N8bn to fix.

The most notable vandalism of the transmission tower was that of the Shiroro-Mando transmission line. The line, which ferries electricity from the Shiroro Hydro Plant in Niger State to Kaduna and other parts of the northern part of the country was destroyed by terrorists in October.

To make up for the loss of transmission on the line, the Ugwuanji–Apir line was used to supply reduced electricity to more than 17 states in the North, but that was also vandalised a few days later and most parts of the northern states were in darkness for more than a week.

This brought untold hardship to citizens of the states as their businesses and livelihoods were upended.

The same vandalism of the Ahoada-Yenagoa 132kV transmission line plunged Bayelsa State into four months of power outage. According to the TCN, the incident, which occurred in July saw the destruction of 13 electricity towers. While the reconstruction was going on, the towers were vandalised against destroying 19 towers.

Meters’ price liberalisation

The NERC stopped the regulation of meter prices under the Meter Assets Provider (MAP) scheme, thereby making DisCos and meter manufacturers to determine the price of electricity meters across the country.

Daily Trust reports that the MAP is a scheme where consumers pay for meters on behalf of the DisCo in their franchise area.

The action has seen meter prices increased to at least N130,000 from the last price increase of N81,000 NERC approved in 2023.

New meter initiative

Apart from the Meter Assets Provider and Nigerian Mass Metering Programme (NMMP) that have all failed to significantly resolve the metering gap in the country, the government announced a new initiative called the Presidential Metering Initiative to close the metering gap across the country.

According to the Minister of Power, Adebayo Adelabu, the initiative saw the procurement of 1.8 million meters to be distributed in phases, with the first batch expected by December 2024, and the final batch to arrive by the second quarter of 2025.

Meter upgrade

The upgrade of all electricity meters caused a rancour in the country as some old meters were supposed to be phased out due to lack of capacity to allow system upgrade required for all STS meters worldwide.

The major concern for the meter owners was who to fund the new meters with their DisCos recommending another one. A failure to upgrade means they can’t recharge the meters and would be forced to go back to estimated billings, a model notorious for overcharging customers.

Liquidity crises continue

Despite the increase in electricity tariff, Discos are still finding it hard to pay for their contractual agreements in the NESI. The minister of power had sometime in the year blamed the DisCos for lower power generation in the county due to load rejection while the DisCo also blamed this on their customers not paying for electricity they consume.

Minister’s failed 6,000MW

The minister of power has repeatedly promised Nigerians that power generation would increase by 2000MW to 6000MW by December. While the grid achieved 5105MW on 27th July 2024, the highest in the last three years, the generation of the 6000MW has been a mirage and it is yet to reach the national grid.

Disco disconnection of tertiary institutions

The year also saw the disconnection of various tertiary institutions owing to their debts to the utility companies. The debt was exacerbated with the tariff increase as most of the institutions are on Band A.

Even though the debts were amassed before the electricity tariff hike in April, it became more pronounced after the increase in electricity tariff.

As such, institutions like the University of Ibadan College Hospital (UCH) were disconnected over N400m debt by the Ibadan Electricity Distribution Company (IBEDC). Similarly, the Aliko Dangote University of Science and Technology, Wudil, Kano State, was thrown into darkness in July, after the Kano Electricity Distribution Company (KEDCO) disconnected the university over N248m debt.

The Jos Electricity Distribution Company disconnected the University of Jos from the national grid in May over debts amounting to N126m.

The same measure was meted to the University of Benin by the Benin Electricity Distribution Company (BEDC) in July over N300m unpaid electricity debt.

The Eko Electricity Distribution Company (EKEDC) in August disconnected power supply to the University of Lagos (UNILAG) over N1bn of unpaid bills. Also, the Ahmadu Bello University, Zaria experienced the same situation.