Barth Nnaji, electricity czar and founder of Geometric Power Ltd, Nigeria’s 12th and fast thriving power distribution company, has asked the President Bola Tinubu administration to immediately get into restoration of the power purchase agreements (PPAs) between electricity firms and the Federal Government, which the late president Muhammadu Buhari administration suspended.
The suspension led to non-payment of the N6.8 trillion owed the power generation firms and over N200 billion owed distribution companies (DisCos).
Nnaji, who leads Geometric Power that drives the Aba integrated power project (Aba IPP), Nigeria’s 12th electricity distribution company, which provides power to the Aba ring-fenced area (RFA) covering nine of the 17 local government areas of Abia State, also said, the Tinubu government should allow DisCos to charge cost-reflective tariffs.
Speaking against the background of Nigeria’s deteriorating electric power crisis, Nnaji, an energy expert, said the measures were immediate if the country must arrest its deteriorating electricity situation.
Nnaji, a professor of robotics and former minister of power, said, Nigeria must build a national super grid of 765 KV, and decentralise its operations, so that a fault in one networked plant would not cause a national blackout.
He also advised for development of Nigeria’s 210 trillion cubic feet of natural gas infrastructure, saying 75 percent of the nation’s electricity production is thermal.
Nigeria survives only on the 132 KV national electricity grid which was primarily designed and initiated in 1962 by Clement Onyemelukwe, who served as the chief electrical engineer. While smaller power stations existed earlier, the construction of the major 132 KV lines notably linking Lagos to Ibadan in 1961-1962, formed the foundation of Nigeria’s integrated grid system. Today, the grid suffers from wear-and-tear due to age, and familiar poor maintenance.
Nigeria’s total energy consumption reached 69 Mtoe (million tonnes of oil equivalent) in 2024, showing a 5 percent decline after peaking at 73 Mtoe in 2021. The energy mix is dominated by biomass (around 40 percent) and oil (33 percent), while consumption per capita is very low at 0.3 toe, roughly one-third of the Sub-Saharan African (SSA) average.
With a population in excess of 210 million, and ranking among SSA’s lowest energy consumer, Nigeria’s electricity usage at 144 kWh per capita annually, which is about 3.5 percent of South Africa’s usage is among the lowest in the world.
According to Energy for Growth Hub, Nigeria, despite having high potential, is considered significantly underpowered, with actual energy consumption falling 80 percent below expectations for its population and economic size.
Nnaji, who was delivering the 30th, 31st and 32nd graduation lecture of the Abia State University (ABSU) at Uturu, also advocated that the DisCos should be encouraged to have embedded generation firms, greater official attention to DisCos, which he said, have been neglected more than other segments of the electricity value chain, and a review of the coverage areas by each distribution firm to make them more agile.
Drawing examples from India, China, Brazil, Egypt, and the United States, Nnaji noted that practically “each industrializing nation adds to the stock of its quantum of electricity every year”, in contrast with Nigeria that “has not built a new power plant in the last 12 years except the 451 MW Azura-Edo Power plant in Edo State, and the 188 MW Geometric Power Plant in Aba, Abia State”.
The former minister, with a storied career in the United States as a world-class scientist and research engineer, argued that people would not invest in new power plants without a financial instrument like the World Bank-backed ‘partial risk guarantee’ (PRG) to provide investors comfort.
“This is because it is exceedingly expensive to invest in power generation”, he told the university community that interrupted his speech intermittently with applause. “It costs about $1.3 million to construct one megawatt gas-fired plant, which is the cheapest in the country, as solar, wind, and hydroelectric technologies cost more”.
He added that investors would like to know how they could recoup their heavy and long-term investments, and the PGR is about the only realistic instrument to provide comfort to them.
He challenged the notion that investors would like to sign such PRGs with state governments following the implementation of the 2023 Electricity Act that permits subnational entities to regulate power generation, transmission, and distribution in their domains. He argued that the state governments have limited financial capabilities.
State Police by design