The Current Status And Future Challenges Of Electricity Market In Nigeria In The Face Of Deregulation

Electricity market has been a sensitive arena that continually attracts global attention and forms a top agenda on the to-do menu of virtually all governments globally. The threat it poses to a country’s national economic sustainability, development and appreciable growth are conspicuously visible in the way each country of the world seeks and exploit various alternative energy sources of generating electricity in the most economical and environmental friendly way. In the current United States of America (USA) presidential debate, electricity generation capacity increase has been a major strategy highlighted by both contestants as the roadmap to job creation and national economic improvement. 

The trend of economic growth in some Middle (UAE) and Qatar (which is taking world attention) cannot be dissociated from their electric power consumption per capita growth over the years. Likewise, Nigeria had been able to trace the collapse of the industrial sector, small and medium scale businesses and economic standstill (or backwardness) of the nation to the inadequate and erratic state of the country’s electricity market – several commitment by different government of Nigeria, both financial and human capital, has been thrown behind the power sector in Nigeria with its attendance still continuous with target set.

Nigeria is a vast country with a total of 356, 667 sq miles (923,768 sq km), of which 351,649 sq miles (910,771 sq km or 98.6% of the total area) is land. The nation is made up of six Geo-Political Zones subdivided into 36 states and the Federal Capital Territory (FCT). Furthermore, the vegetation cover, physical features and land terrain in the nation vary from the flat open savannah in the North to thick rain forests in the south, with numerous rivers, lakes and mountains scattered all over the country. These national physical and political attributes themselves present challenges for the effective provision of power needs to all nooks and crannies of the country.

To provide adequate power to ensure that Nigeria is among the industrialized nations, three critical activities must be effectively achieved.

Since development and population growth in any country are highly dynamic, these three activities must also be carefully addressed in a dynamic, creative and logical manner.

Adequate power supply is an unavoidable prerequisite to any nation’s development, and electricity generation, transmission and distribution are capital-intensive activities requiring huge resources of both funds and capacity. In the prevailing circumstances in Nigeria, where funds availability is progressively dwindling, creative and innovative solutions are necessary to address the power supply problem.

The administration of President Umaru Musa Yar’adua has already unveiled a mission, setting an agenda of industrializing Nigeria by 2020, which is in the next 10 years. This conference is therefore one of the highest and administrative governing structures that must consider and proffer practicable solutions to the power supply problems in order to achieve this priority goal of the Nigerian Government.

This project work, therefore presents a brief history of the attempts and efforts to supply power to the nation. It also briefly reviews the current status of energy resources, energy demand and supply, power generation, transmission and distribution, power sector national policy, summary of the major challenges and the way forward.