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Electricity generation declined by 1.70% to 9,289.95GWh, attributed to reduced energy off-take by DisCos and industrial consumers While the electricity sector in Nigeria showed moderate growth in generation capacity, metering and revenue collection in the latter part of 2024, issues such as grid instability, metering gaps and financial inefficiencies persist. The Nigerian Electricity Regulatory Commission (NERC) released its Fourth Quarter (Q4) 2024 report last week, outlining key developments in power generation, metering and financial transactions within the Nigerian Electricity Supply Industry (NESI). The report indicates progress in generation capacity and metering, though persistent challenges such as system reliability and financial shortfalls remain. Electricity generation trends in Nigeria Nigeria’s 28 grid-connected power plants recorded an increase in available generation capacity in Q4 2024, reaching 5,296.89MW, a 3.84% rise from 5,100.90MW in Q3. This growth was driven by capacity improvements in 15 power plants, notably Sapele 2, which saw a 270.88% increase. 60% of manufacturing companies and hundreds of other firms, including from the Dangote Group, have abandoned the national grid due to chronic power outages Despite this, total electricity generation declined by 1.70% to 9,289.95GWh, attributed to reduced energy off-take by distribution companies (DisCos) and industrial consumers. Additionally, grid reliability remained a concern, with three total system collapses and two partial collapses recorded in the quarter. Metering progress slow A total of 185,439 meters were installed in Q4, reflecting a marginal 0.19% increase from Q3. The net end-user metering rate improved slightly to 46.57%, up from 46.15%. 96.56% of new meters were deployed under the Meter Asset Provider (MAP) framework. Other installations included 4,076 meters under the Meter Acquisition Fund (MAF) and 1,924 under vendor-financed schemes. Despite these efforts, a significant portion of electricity consumers remains unmetered, relying on estimated billing. The NERC continues to enforce monthly energy caps to mitigate over-billing concerns – customers have long complained about over-billing by DisCos. Financial performance and remittances of electricity sector in Nigeria DisCos received 7,420.58GWh in Q4, billing 6,207.84GWh to customers, the NERC report showed. Billing efficiency improved to 83.66%, a 1.51% point increase from Q3. Revenue collection also rose, with DisCos collecting N509.84 billion (around $331 million) from the N658.40bn (around $428m) billed, leading to a collection efficiency of 77.44%. Despite these improvements, Aggregate Technical, Commercial and Collection (ATC&C) losses stood at 35.22%, contributing to a N139.08 billion revenue shortfall. DisCos remitted N378.93bn (around $246m) of the N408.86bn (around $266m) payable, achieving a 92.68% remittance rate, up from 83.77% in Q3. Nigeria’s international electricity customers, including those in Benin and Togo, owed $8.84m for electricity supplied in Q4. Of the $14.05m invoiced, only $5.21m was paid, reflecting a 37.08% payment rate. Explaining system collapses in Nigeria In terms of the system collapsing, NERC said the national power grid operates within specific voltage (330kV ± 5.0%) and frequency (50Hz ± 0.5%) limits. Deviations from these stability ranges can reduce power quality and lead to outages, including partial or total system collapses. NERC said the System Operator (SO) monitors frequency to prevent disturbances, as imbalances between electricity supply and demand can trigger automatic shutdowns of generation units, potentially causing cascading failures. In Q4 2024, the grid experienced three total collapses (19 October, 7 November and 11 December) and two partial collapses (14 October and 5 November), according to the NERC data. |
