Power Struggle: Overcoming Nigeria’s Evacuation, Distribution Hurdles

Nigeria’s electricity distribution value chain remains a critical bottleneck in the quest for reliable and affordable power. Despite the country’s vast energy resources—including natural gas, hydro, and solar potential—persistent inefficiencies in evacuating and distributing electricity have left millions of households and businesses in darkness. This article examines the systemic challenges plaguing Nigeria’s energy distribution network and proposes actionable solutions to transform the sector into a driver of sustainable development.

Challenges in Energy Evacuation

1. Grid Constraints and Transmission Bottlenecks
Nigeria’s transmission infrastructure is severely overstretched, with a wheeling capacity of approximately 8,500MW against a theoretical generation capacity of 13,000MW. Aging transmission lines, insufficient substations, and poor maintenance lead to frequent grid collapse. For instance, in 2023 alone, Nigeria experienced over 10 nationwide grid failures, disrupting economic activities.

2. Gas Supply and Vandalism
Over 80% of Nigeria’s power generation relies on gas-fired plants. However, pipeline vandalism, especially in the Niger Delta, disrupts gas supply to generation companies (GenCos). The Nigerian National Petroleum Corporation (NNPC) estimates that vandalism causes a 25% loss in gas supply annually, directly impacting electricity evacuation.

3. Weak Grid Stability and Reactive Power Deficits
Voltage instability and inadequate reactive power compensation systems exacerbate grid failures. Many transmission lines operate beyond their thermal limits, causing energy losses and limiting the evacuation of generated power to distribution companies (DisCos).

Challenges in Energy Distribution

i. Ageing Infrastructure and Technical Losses
Nigeria’s distribution infrastructure, largely inherited from the pre-privatization era (pre-2013), is dilapidated. Overloaded transformers, undersized conductors, and poorly maintained networks result in technical losses exceeding 30% in some regions. For example, the Abuja Electricity Distribution Company (AEDC) reported technical losses of 22% in 2023, far above the global average of 6–8%.

ii. Commercial Losses and Non-Payment Culture
Electricity theft, meter bypass, and non-payment by consumers—including government agencies—have crippled DisCos’ revenue streams. According to the Nigerian Electricity Regulatory Commission (NERC), DisCos collected only 63% of the ₦782 billion billed to customers in Q4 2023. An estimated 58% of customers remain unmetered, fueling billing disputes and distrust.

iii. Financial Instability
DisCos struggle with liquidity crises due to non-cost-reflective tariffs and legacy debts. The federal government’s electricity subsidy, which reached ₦540 billion in 2023, creates market distortions and discourages private investment. Additionally.

iv. Geographical and Logistical Barriers
Rural and peri-urban communities often lack grid connectivity, forcing reliance on expensive diesel generators. Over 45% of Nigeria’s population remains off-grid, perpetuating energy poverty.

Strategies for Sustainable Energy Distribution

a) Modernizing Infrastructure Through Public-Private Collaboration

• Expand Transmission Networks: Partner with international agencies (e.g., World Bank, AfDB) and private investors to upgrade transmission lines and substations. The Siemens Power Initiative, aiming to boost grid capacity to 25,000MW by 2025, must be accelerated.
• Deploy Smart Grid Technologies: Integrate IoT-enabled sensors, automated reclosers, and advanced metering infrastructure (AMI) to monitor and optimize power flow. Smart grids can reduce technical losses by 15–20% and enable real-time fault detection.

b)  Tackling Revenue Leakage and Improving Accountability

• Universal Metering: Fast-track the National Mass Metering Programme (NMMP) and (DISREP) to eliminate estimated billing by 2026. Prepaid meters empower consumers and improve payment compliance.
• Blockchain for Transparency: Implement blockchain-based billing systems to track energy consumption and curb tampering. Kenya’s success with blockchain in reducing non-revenue water offers a model.
• Strict Enforcement Against Theft: Strengthen legal frameworks to prosecute electricity theft and vandalism. Community-led surveillance programs, as piloted in Lagos, can deter infrastructure sabotage.

c) Policy Reforms and Financial Sustainability

• Cost-Reflective Tariffs with Social Safeguards: Phase out blanket subsidies and adopt targeted subsidies for low-income households using data from the National Social Register. This ensures DisCos’ liquidity while protecting vulnerable groups.
• Debt Resolution and Investment Incentives: Clear the ₦3.7 trillion electricity market debt through securitization and attract private capital via guarantees and tax holidays for grid investments.

d) Decentralized Renewable Energy Integration

• Mini-Grids and Solar Hybrid Systems: Leverage Nigeria’s solar potential (4–6.5 kWh/m²/day) to deploy off-grid solutions in rural areas. The World Bank’s $750 million DARES project aims to electrify 5 million households via mini-grids by 2030.
• Embedded Generation: Encourage DisCos to integrate rooftop solar and biomass plants into their networks, reducing reliance on centralized grids. The 2023 Electricity Act, which empowers states to regulate their own markets, is a step forward.

e) Strengthening Institutional Capacity

• Training and Technology Transfer: Invest in workforce development for DisCos and TCN staff, focusing on grid management, renewable energy integration, and cybersecurity.

A Brighter Future Through Collaboration

Nigeria’s energy distribution challenges are formidable but not insurmountable. Success hinges on coordinated action by government, private sector players, and communities. By modernizing infrastructure, embracing renewables, and fostering a culture of payment and accountability, Nigeria can unlock a future where reliable electricity drives industrialization, job creation, and improved quality of life. The recently enacted Electricity Act 2023, which decentralizes market control, offers a unique opportunity to innovate. With sustained political will and strategic investments, Nigeria’s lights can stay on—powering progress for generations to come. grapples with systemic challenges in evacuating and distributing energy.

Dr. Abubakar Shuaibu Jimeta is the Chief Commercial Officer, Kano Electricity Distribution Company (KEDCO)

The views are personal.