Why State Governments Should Invest in Power Generation Instead of Only Distribution

By Sebastine Chukwuebuka Okafor, Ph.D

Nigeria continues to struggle with electricity supply despite having several power plants across the country. The country has an installed electricity generating capacity of about 13,625 megawatts, but the power that is actually generated most days is only about 4,000 to 5,000 megawatts. This gap between installed capacity and real production is one of the main reasons homes, businesses, and industries experience poor electricity supply.

Several large power plants exist within the national grid. These include Egbin Power Plant in Lagos with about 1,320 MW capacity, Kainji Hydropower Plant with about 760 MW, Jebba Hydropower Plant with about 578 MW, Shiroro Hydropower Plant with about 600 MW, Zungeru Hydropower Plant with about 700 MW, and the Azura-Edo Independent Power Plant with about 461 MW capacity. Other plants such as Afam Power Station, Delta Power Plant, and Geregu Power Plant also contribute electricity to the national grid.

Even with these facilities, the electricity produced remains far below the installed capacity. Many of these power plants do not operate at full output because of several problems. Gas-fired plants often suffer from shortages of gas supply. There are also cases of pipeline vandalism, which disrupt fuel delivery to power stations. Some plants operate with aging equipment that requires frequent maintenance, reducing the amount of electricity they can produce. In other situations, the transmission system cannot carry all the electricity generated, forcing some plants to reduce production.

Because of these challenges, Nigeria currently produces less than half of the electricity it has the capacity to generate. For a country with a population of over 200 million people, this level of power supply is very low. It also explains why many Nigerians rely heavily on private generators for daily electricity needs.

In recent years, many state governments have focused more attention on electricity distribution. While improving distribution networks is important, it does not solve the core problem of limited electricity generation. If the country continues to produce only about 4,000 to 5,000 megawatts, better distribution alone will not provide stable power.

The Electricity Act 2023 now allows state governments to participate more directly in electricity generation. This creates an opportunity for states to develop independent power projects, solar farms, small hydro plants, and other local energy sources. It is very clear that states can increase the total electricity available within their regions and reduce pressure on the national grid if they start investing in generation.

This is because when states produce more electricity locally, industries, hospitals, schools, and businesses will benefit from improved power supply. It will also encourage economic activities and reduce the heavy dependence on diesel and petrol generators.

For Nigeria to achieve stable electricity supply, state governments must make better use of the new Electricity Act. Rather than concentrating mainly on distribution, greater attention should be given to building and supporting power generation projects that increase the overall electricity available to the country.

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