Major developments in Nigeria’s power sector in 2024 

Amidst numerous challenges, the sector recorded notable activities and developments this year, from policy reforms and infrastructure upgrades to increased private sector participation and investments in renewable energy.

It also recorded the highest number of grid collapses in a single year.

As the country strives to bridge its energy gap and power its growing economy, the notable events and developments in the power and utility sector will shape the country’s future as we draw the curtains on 2024 and knock on the new year.

In March 2024, the Federal Government announced the removal of subsidies on electricity mostly for customers on Band A feeders, promising them improved supply.

The government argued that the removal of the electricity subsidy was to improve supply and allow it to pay off its mounting debt in the utility sector.

At the time, the federal government owed electricity-generating companies over a trillion naira while the generating subsector grappled with poor gas supply in power plants. Various stakeholders in the Power sector had urged the federal government to pay the debts it owed GenCos. In the same vein, the President had promised to address the energy poverty faced by the majority of Nigerians.

According to a 2023 study, 68% of Nigerians received less than 10 hours of electricity supply per day, while only less than 10% of Nigerians received above 15 hours of electricity per day.

Since the hike of electricity for Nigerians on Band A feeders, the government has insisted that they enjoy a minimum of 20 hours of electricity.

In September 2024, the Minister of Power said that about 40% of Nigerians now enjoy over 20 hours of electricity supply. The National Bureau of Statistics, in its “Nigeria Residential Energy Demand-side Survey Report 2024” noted that 86.6% of Nigerians had electricity supply for an average of 6.6 hours per day.

In February 2024, Nigeria’s Minister of Power, Adebayo Adelabu, pledged to ensure all households and businesses are properly metered.

Adelabu stated this in Okene, Central senatorial district of Kogi State when he commissioned a 60MVA, 132/33kV power transformer within the Okene Transmission Substation.

The project which was awarded on the 6th of March 2023 under the Presidential Power Initiative was aimed at improving power supply to parts of Kogi, Edo, and Ondo states.

Providing metres to Nigerians helps ensure accountability in electricity billing by distribution companies. With accountable billing comes fairness and efficiency in fee collection.

In May 2024, the Federal Government said it would patronise local manufacturers for electricity equipment.

The Minister of Power, Bayo Adelabu promised that agencies under the Ministry of Power would be encouraged to patronise local manufacturers.

The Minister of Power, Bayo Adelabu promised that agencies under the Ministry of Power would be encouraged to patronise local manufacturers.

This patronage will boost sales for local manufacturers in the electronics market, and consequently impact the country’s economy positively. This is coming at a time when manufacturers lament about high production cost and poor sales as a result of inflation.

Nigerian Electricity Distribution Companies (DisCos) recorded the sum of  N431.16 billion as revenues from customers in Q2 2024, reflecting a collection efficiency of 79.31%.

Context: According to the quarterly report of the Nigerian Electricity Regulatory Commission (NERC) for the second quarter of 2024, DisCos had a total billing of N543.64 billion.

The 79.31% collection efficiency represents a modest increase of 0.20 percentage points when compared to the previous quarter’s 79.11% efficiency.

The Nigerian government has consistently argued that Nigerians were not willing to bear the cost of constant electricity supply.

An increase in payment collection by DisCos shows that this narrative is changing. It can be said that the current administration’s decision to remove the electricity subsidy and the hike in tariff for customers on Band A feeders contributed to this development.

In August 2024, the Federal Government approved a 50 per cent subsidy for the electricity consumed in hospitals across the country.

This was announced by the Minister of State for Health and Social Welfare, Dr. Tunji Alausa, who noted that the aim was to reduce the running costs for public hospitals and alleviate the impact on patients

The Minister of Power had promised that the Federal Government would subsidise electricity in hospitals and universities, even if they are on Band-A feeders. Hospitals had complained about not being able to afford electricity charges

The subsidy was granted at a time when the management of tertiary hospitals were lamenting about not being able to pay electricity bills. Some of them were disconnected from the grid, notably the University College Hospital, Ibadan, and the Lagos University Teaching Hospital.

However, it is not clear whether the subsidy has been implemented or is helpful to the hospitals. In October 2024, the UCH Ibadan was thrown into darkness for days after its electricity was disconnected by the Ibadan Electricity Distribution Company (IBEDC). The hospital management admitted that it owed over N3 billion in electricity charges from 2019.

In August 2024, the Federal Government announced that, in partnership with states, it raised N100bn for the procurement of prepaid electricity meters, as part of the current administration’s Presidential Meter Initiative programme.

Minister of Power, Adebayo Adelabu, who disclosed this in Ibadan, Oyo State, said thousands of metres would be distributed to Nigerians in a bid to close the metre gap in the country

The minister noted that a large majority of electricity users in Nigeria are not metered and estimated billing often causes disagreements between customers and power distribution companies.

“Out of over the 12 million electricity customers we have in Nigeria, only a little over five million is metered. We have over seven-million-meter gap today, and these are self-inflicted problems,” Adelabu explained. 

Metering is important for the electricity sector’s commercial viability and sustainable revenue generation, ensuring fair billing of customers and proper payment for electricity consumption. It also provides real-time information to customers and power providers about how much energy is being used.

The Minister had argued that many Nigerians were not paying their bills because they disagreed with the estimated bills they received from distribution companies. He argued that metering would ensure transparency.

184,507 metres in Q3 2024

In December 2024, the Nigerian Electricity Regulatory Commission (NERC) said it installed 184,507 metres in Q3 2024.

According to the NERC’s Q3 2024 report the 184,507 meters installed marked a 256.01% increase when compared to the 51,826 metres installed in Q2 2024.

This is believed to be an impact of the federal government’s improved investment in the power and utilities sector.

Nigerians paid a total sum of N466.69 billion out of the N626.02 billion they were billed for electricity supply in the third quarter of 2024, according to data published by the Nigeria Electricity Regulatory Commission (NERC)

According to the commission, all DisCos collectively received N466.69 billion, recording a revenue collection efficiency of 74.55%, 4.76% short of the efficiency rate recorded in Q2 2024 which was 79.31%.

In the second quarter of the year, the joint revenue of all discos was N431.16 billion out of N543.64 billion billed to customers.