Power Shifts: States Gain Control, But Grid Collapses And Tariff Spikes Threaten Progress

Power Shifts: States Gain Control, But Grid Collapses And Tariff Spikes Threaten Progress

In 2024, Nigeria’s power sector was sparked into action by the game-changing Electricity Act (EA), which empowered states to take control of generating, transmitting, and distributing electricity. This development marked a pivotal moment for the Nigerian Electricity…Power Shifts: States Gain Control, But Grid Collapses And Tariff Spikes Threaten Progress

Supply Industry (NESI), with eight states—Enugu, Ekiti, Oyo, Ondo, Kogi, Edo, Imo, and Lagos—gaining regulatory autonomy from the Nigerian Electricity Regulatory Commission (NERC). This shift allowed the creation of new sub-companies for interstate energy supply, ushering in a new era of competition and state-driven power generation.

However, despite these ambitious strides, the sector faced significant hurdles. Grid collapses became a recurring nightmare, with the national grid crashing a staggering 13 times in 2024, halting progress. The country’s daily energy production barely reached 4,000MW—far short of the ambitious target of 6,000MW. A critical investigation uncovered the causes of the outages, pointing to widespread vandalism of transmission lines and outdated infrastructure, which has long been due for an upgrade.

The Transmission Company of Nigeria (TCN) bore much of the blame, especially after a wave of attacks crippled power delivery to the northern region. In response, the Federal Government allocated a massive N9 billion to restore the damaged transmission assets.

Meanwhile, Lagos State announced plans to generate 4,000MW, aiming to eliminate dependence on the national grid and bolster its energy security. The sector also saw the controversial introduction of new electricity tariffs, which saw prices skyrocket from N68 per kWh to N225 per kWh for premium customers. The price hikes sparked outrage from consumers and trade unions, though the government defended the move as necessary to reduce subsidy payments and ensure consistent electricity supply.

Despite these challenges, Nigeria’s power sector made notable advancements. The Niger Delta Power Holding Company (NDPHC) recovered millions in debt from cross-border transactions, and the Nigerian Bulk Electricity Trading Company (NBET) saw its license renewed for another three years.

As 2024 draws to a close, the future of Nigeria’s power sector remains a mixture of promising reforms, bitter setbacks, and an urgent need for more investment to fix the country’s power infrastructure. Will the promises of deregulation and privatization finally lead to an uninterrupted power supply, or will these reforms collapse under the weight of ongoing technical and security challenges?

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