The Nigerian Electricity Regulatory Commission (NERC) has published its third-quarter 2024 report, revealing improvements and challenges in the Nigerian Electricity Supply Industry (NESI).
The report, which complies with the Electricity Act 2023, provides an evaluation of operational, commercial, and regulatory performance.
Growth in Power Generation Capacity and Performance
The average available generation capacity of Nigeria’s 28 grid-connected power plants reached 5,100.90MW in Q3 2024, showing a 16.04% increase (+705.13MW) compared to Q2 2024.
This growth was largely driven by increased capacities in 19 of the 28 plants.
Improvements were observed at Afam, which recorded a 182% increase, Omotosho with 92%, and Olorunsogo at 84%. These developments contributed to an average hourly generation of 4,280.24MWh/h, a 6.51% improvement from Q2, translating to a total quarterly generation of 9,450.76GWh, up by 7.68%.
The generation mix also saw hydropower contributing 32.60% of the total energy generated, an increase from 26.98% in Q2.
Seasonal river flows helped in boosting the performance of hydropower plants such as Shiroro (+50.02%), Kainji (+21.86%), and Jebba (+38.56%). Despite this, thermal plants faced challenges, with a 1.69% drop in their cumulative average hourly generation due to constraints like gas supply issues and mechanical faults. Plants like Egbin and Geregu recorded declines of -26.32% and -35.42%, respectively.
Advances in Metering and Revenue Collection
An achievement was recorded in metering, with 184,507 meters installed during Q3, representing a 256.01% increase from Q2’s 51,826 installations.
This surge elevated the net end-user metering rate from 45.43% to 46.15%. The installations were primarily carried out under the Meter Asset Provider (MAP) framework, accounting for 96.86% of the total.
NERC has mandated Distribution Companies (DisCos) to leverage all available frameworks to close metering gaps, ensuring consumer protection against overbilling through energy caps for unmetered customers.
Revenue collection also saw improvements. DisCos collected ₦466.69 billion out of the ₦626.02 billion billed, an 8.24% increase compared to Q2.
However, the collection efficiency dropped slightly to 74.55%, down from 79.31% in Q2. Aggregate Technical, Commercial, and Collection (ATC&C) losses rose to 39.10%, representing a 4.40-percentage-point increase from Q2.
This included technical and commercial losses at 18.32% and collection losses at 25.45%. No DisCo met its ATC&C target as stipulated in the Multi-Year Tariff Order (MYTO), with Kaduna DisCo recording the worst underperformance (actual ATC&C at 70.84% against a target of 25.00%).
Grid Stability and System Losses
Grid performance remained a mixed bag in Q3. The Transmission Loss Factor (TLF) increased to 9.04%, exceeding the MYTO target of 7.00%.
This showed that for every 100MWh of energy sent out, 9.04MWh were lost in transmission, marking a decline from the 7.79% recorded in Q2. One incident of partial grid collapse was reported during the quarter, occurring on 6th July 2024. This highlights the need for improved system coordination and infrastructure to prevent disruptions.
Frequency stability showed improvement, with the average quarterly frequency range narrowing to 1.19Hz from 1.51Hz in Q2. The grid operated closer to the standard 50Hz benchmark, thanks to enhanced monitoring systems. However, the absence of a Supervisory Control and Data Acquisition (SCADA) system continues to hinder real-time grid management.
Consumer Affairs and Safety
Consumer engagement remained a priority, with NERC hosting two town hall meetings in Gombe and Calabar to address issues like service-based tariffs, metering, and customer redress mechanisms.
A total of 328,696 complaints were received across DisCo Customer Complaint Units (CCUs), a 14.35% increase from Q2. Common issues included metering, billing, and service interruptions. Forum Offices resolved 58.90% of active appeals, an improvement from the 54.90% resolution rate in Q2.
Safety remains an issue, with 56 accidents reported in Q3, resulting in 29 fatalities and 28 injuries. While fatalities decreased compared to Q2, injuries saw an increase. Investigations into these incidents are ongoing, and NERC is collaborating with stakeholders to enhance health and safety protocols.
Regulatory Achievements in Power Generation
In Q3, NERC issued 50 new orders and 50 licences, permits, and certifications. These include six off-grid generation licences with a combined capacity of 30.06MW, one on-grid licence renewal, and seven certifications for Meter Service Providers.
The Commission also conducted five hearings to address stakeholder disputes and issued compliance directives to defaulting operators.
The Q3 2024 report stresses the duality of progress and challenges in Nigeria’s electricity sector. While advancements in generation capacity, metering, and revenue collection signify progress, issues like high ATC&C losses, grid instability, and safety reveal areas needing urgent attention.
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