The second quarter of 2024 witnessed both resilience and ongoing challenges for Nigeria’s energy sector. Despite setbacks in crude oil production due to infrastructure issues, policy uncertainty, and security concerns, Nigeria retained its position as Africa’s largest oil producer. Crude output was notably affected by pipeline sabotage and crude oil theft, but strategic efforts to bolster production and enhance infrastructure security continue.
Significant progress was made in the natural gas sector, highlighted by the final investment decision from the Nigerian National Petroleum Corporation Limited (NNPCL) and TotalEnergies on a major gas field. This project aims to boost both domestic supply and export capabilities, aligning with Nigeria’s strategy to leverage its vast gas reserves for enhanced energy security and economic growth.
Renewable energy projects also saw advancement, with increased investments in solar and wind energy. The government’s initiatives to diversify the energy mix are crucial for reducing dependence on fossil fuels and expanding energy access, though regulatory and financial challenges persist.
Notable advancements were made towards establishing state electricity markets. Several states, including Ekiti, Enugu, Oyo, and Ondo, enacted new electricity laws, leveraging the legislative powers granted by the Electricity Act of 2023. These developments are important for decentralising the electricity market, enhancing competition, and improving power supply reliability across the country.
The Nigerian Electricity Regulatory Commission (NERC) allocated N21 billion to distribution companies (DisCos) to supply meters to end users at no cost. This initiative, part of the Presidential Metering Initiative (PMI), aims to address the widespread lack of electricity meters. Previously introduced metering options failed to significantly reduce the metering gap, currently affecting over 7 million customers. The Meter Acquisition Fund (MAF) scheme was established to create a reliable revenue stream, enabling DisCos to secure financing for meters and other essential investments.
The Transmission Company of Nigeria (TCN) finished rebuilding four power transmission towers damaged by vandals in Nigeria’s North-East region. These towers were crucial for delivering bulk electricity to substations in the area. Despite an unexpected setback during the re-stringing process, which caused one of the towers to collapse and delayed the project’s completion, all four towers have been rebuilt and the transmission line is now fully operational.
Ikeja Electric Distribution Company expanded its Band A category by incorporating 24 new feeders. These feeders, previously under a different band, will now benefit from the recently increased tariff of N209.50 per kilowatt-hour (kWh). This change followed Ikeja Electric’s demonstration of its ability to consistently deliver a minimum of 20 hours of daily electricity supply. Customers on Band A feeders are promised at least 20-24 hours of daily electricity, justifying the higher tariff. The addition of these feeders brings the total number of approved Band A feeders under Ikeja Electric to 128.
Overall, the second quarter of 2024 in Nigeria’s energy sector was characterised by efforts to stabilise oil production, significant advancements in natural gas development, and ongoing progress in renewable energy investments. These measures are essential for enhancing the country’s energy security and fostering sustainable sector growth.
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