Six firms, varsity dump national grid over blackout

Baffled by constant power outages occasioned by the incessant grid collapses, six firms and one private university have got the approval of the Nigerian Electricity Regulatory Commission to generate and distribute electricity.

The firms, including Nile University of Nigeria in Abuja, will be allowed to generate up to 30 megawatts of electricity under various arrangements.

According to a report by NERC, the commission issued one off-grid generation licence with a gross capacity of 2.63 MW to Daybreak Power Solutions Limited in the last quarter of 2024.

The commission also approved the grant of captive power generation permits to four applicants with a gross capacity of 22.50 MW.

The applicants are Ro-Marong Nigeria Limited in Amuwo-Odofin, Lagos (4.40 MW); Quantum Paper Limited, Agbara, Ogun State (7 MW); Psaltry International Company Limited, Alayide village, Oyo State (1.10 MW); and Nile University of Nigeria, Airport Road, Jabbi Abuja (10 MW).

Captive power generation permits are issued to entities that intend to own and maintain power plants exclusively for their own consumption, that is, no sale of electricity generated from the plant to any third party.

Pursuant to section 165(1)(m) of the Electricity Act 2023, which states that the commission shall “award licences of mini-grid concessions to renewable energy companies to exclusively serve a specific geographical location indicating aggregate electricity to be generated and distributed from a site with the obligation to serve customers to request service”, the regulator said it continued to encourage the development and utilisation of renewable energy by issuing permits and registration certificates for mini-grid development.

A permit is usually issued to a mini-grid developer for the construction, operation, and maintenance of mini-grids with a distribution capacity above 100 kilowatts and a generation capacity up to 1 MW.

The commission also issues registration certificates to developers for one or more systems with a distribution capacity below 100 kW.

In 2024/Q4, NERC disclosed that it issued 24 permits with a gross capacity of 5.5 MW and five registration certificates with a gross capacity of 450 kW.

Prado Limited got 24 permits to generate electricity with mini-grids in 24 locations in Benue, Nasarawa, Niger, Ondo and Kano States.

In the same vein, Cross Boundary Energy was issued five certificates to distribute power in Kogi State.

Within the period under review, the commission confirmed that it certified 18 Meter Service Providers and six meter installer companies, six manufacturers, three vendors, and three importers.

The commission also issued 15 permits for Meter Asset Providers.

The PUNCH recalls that as of September last year, about 250 manufacturers and academic institutions had abandoned their respective power distribution companies to generate their own electricity. As the country battles incessant blackouts.

The organisations, many of whom are bulk electricity users, shunned the national grid to generate reliable electricity for themselves.

Findings from different data sources, particularly from the Nigerian Electricity Regulatory Commission, showed that the firms, including the Dangote refinery, generated up to 6,500 megawatts of electricity altogether.

This is higher than the country’s power generation, which is currently hovering around 5,500 MW.

Experts said the abandonment of the national grid by bulk users of electricity could spell doom for the power sector.

Minister of Power, Adebayo Adelabu, said last year 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. 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 ₦350 to ₦400 per kilowatt-hour for those connected to gas lines. For diesel it’s between N950 and N1,000,” he said.

Meanwhile, NERC blamed power fluctuations for the migration of bulk users from the national grid.

The regulator in a recent report disclosed that fluctuations in grid voltage, including spikes, dips, flickers, and brownouts, could cause significant harm to consumers and result in substantial commercial losses.

It explained that extreme cases of voltage fluctuations, particularly at the distribution network level, cause severe damage to industrial machines, prompting the industries to embrace captive power generation.

“To guarantee the quality of electricity delivered to end users, the Grid Code specifies a nominal system voltage of 330 kV with a tolerance range of ±5 per cent (313.50 kV to 346.50 kV in the lower and upper bounds, respectively).

“Fluctuations in grid voltage, including spikes, dips, flickers, and brownouts, can cause significant harm to consumers and result in substantial commercial losses. Extreme cases of voltage fluctuations, particularly at the distribution network level, can cause severe damage to industrial machines, thereby compelling the industrial customers to seek alternative sources of power outside of the national grid,” the regulator disclosed.

The commission said it continued to engage with the Transmission Company of Nigeria and other stakeholders to ensure sustained efforts at keeping the system voltage within the limits contained in the grid code and thus providing a safe and reliable electricity supply to end users.