Nigeria Requires 100,000MW To Fix Power Deficit, Says Ex-Minister

A former Minister of Power, Professor Barth Nnaji, has stated that Nigeria requires approximately 100,000MW to address its significant power deficit.

Nnaji, who is the Chairman of Geometric Power, known as Aba Power, lamented that despite having an installed generation capacity of roughly 13,000MW, not more than 5,000MW is typically available in the country.

He disclosed these in a paper he presented during a workshop organised by the Nigerian Electricity Regulatory Commission (NERC) for judges in Abuja.

“There is a tremendous power deficit in the country. Nigeria’s installed generation capacity is approximately 13,000MW, although less than 5,000MW is currently available.

“The country needs up to 100,000MW to get cracking as a medium economy. South Africa has since 2007 realized that its 58,000MW capacity is grossly inadequate for its population/economy, leading to frequent load shedding. Its population is about 64million, a
fraction of Nigeria’s over 210m”, Nnaji said.

The former Minister, however, warned that Nigeria cannot achieve meaningful growth in its electricity sector without the restoration of Power Purchase Agreements (PPAs).

He claimed that investor confidence has been badly damaged by their suspension.

Nnaji said, “Without restoring PPAs, it is difficult to see significant growth in the sector. It costs between $1.5m and $2m to install one megawatt from a gas-fired power plant, which is the cheapest source of power in Nigeria because natural gas is abundant in the country.”

According to him, the suspension of PPAs during the previous administration stalled several bankable generation projects and sent negative signals to both local and foreign investors.

“How many companies or even state governments can raise funds for 100 megawatts without firm PPAs?”, the former minister asked.

He continued: “Until this issue is resolved, investors’ funds will continue to shy away from Nigeria. Something has to be done quickly.”

Nnaji also raised concerns over the growing uncertainty following the establishment of state electricity regulatory commissions under the Electricity Act 2023, citing the recent tariff reduction by the Enugu State regulator as an example.

He said: “A state regulator cannot realistically fix the price of a commodity that is neither produced nor transported exclusively within its territory. Electricity is generated outside the state, wheeled through a transmission network outside the state’s jurisdiction, and sold within the state. Such tariff jurisdiction should lie elsewhere, with NERC.”

To this end, Nnaji called on the judiciary to clarify the jurisdictional conflicts.

“The judiciary is in the best position to resolve this knotty issue, and the earlier it is settled, the better for everyone. An atmosphere of uncertainty hurts investment, the economy, and ultimately the welfare of Nigerians”, he said.

He also decried the rising cases of vandalism of electricity infrastructure, particularly distribution transformers, describing it as a major threat to the viability of electricity distribution companies.

“Vandals attack distribution transformers to steal transformer oil and copper cables. A 500kVA transformer that sold for about N2m a few years ago now sells for N12.5m. Some streets require three or more transformers. In Aba Power alone, we have thousands of such transformers.

He urged the judiciary to ensure the speedy prosecution of offenders.

Nnaji noted that power producers face chronic shortages, forcing them to buy gas at prices far above regulated rates.

“Seventy-three per cent of Nigeria’s power plants are gas-fired, yet domestic users are paying up to $9 per standard cubic foot instead of the approved rate of less than $3,” he said.

Nnaji continued: “Nigeria has over 210 trillion cubic feet of gas, yet there is not enough for domestic consumption.”