On Thursday, Chief Adebayo Adelabu, the Minister of Power, highlighted the benefits of reconnecting to the national grid for industries currently relying on their own power sources. Speaking at the Nigeria Electricity Liability Management Company (NELMCO) board retreat in Lagos, Adelabu noted that despite a record generation of 5,155 megawatts, industries are still hesitant to utilize the grid, which could offer them cost savings.
Adelabu pointed out that many industries have distanced themselves from the national grid due to past reliability concerns. “Most bulk electricity users, including industries, have opted for captive power plants because of a lack of trust in the grid’s reliability. However, these independent power sources are more costly,” he said. He further explained that generating power independently costs significantly more—around N350 to N400 for gas-connected setups, and even higher for diesel and petrol at N950 and N550, respectively, according to his spokesperson, Bolaji Tunji.
The minister expressed his commitment to restoring trust and stability in the grid, aiming to encourage bulk users to return to the national grid. “As we build confidence and demonstrate stability, industries will be more inclined to reconnect to the grid, which offers a cheaper power source,” he stated. Adelabu also shared the government’s short-term goal of achieving 6GW by December 2024 and reiterated its long-term vision, known as Vision 30-30-30, aiming for 30 gigawatts of power generation by 2030, with 30% derived from renewable energy.
To reach these ambitious goals, Adelabu emphasized a multi-faceted approach for the Nigeria Electricity Supply Industry (NESI). He also suggested implementing differential tariffs during off-peak periods to stimulate demand. “We’ve noticed a drop in demand during off-peak hours. To counter this, we’re considering a different tariff rate during these times, especially as we roll out smart meters,” he said.
Adelabu urged NELMCO board members to focus on corporate governance, stressing the importance of transparency, accountability, and integrity in managing the sector. “As we manage NESI’s liabilities, upholding the highest standards of governance is essential. Our actions must align with public interest, maintaining and strengthening trust across the board,” he added.
Furthermore, he encouraged the power sector to integrate Environmental, Social, and Governance (ESG) standards into their operations, stating, “ESG considerations are now crucial in corporate operations. NELMCO’s role extends beyond managing financial liabilities; we are also responsible for social and environmental stewardship. Incorporating sustainable practices will help us achieve Nigeria’s climate goals and promote social equity. This commitment to ESG will enhance our reputation and ensure long-term value creation for all Nigerians.”
In conclusion, Adelabu called on the board to develop sustainable strategies for addressing tariff shortfalls and improving the sector’s financial stability. “Innovative financing solutions are needed to tackle the tariff shortfall in NESI. We must balance our current obligations while developing long-term strategies that will lead to a financially solvent sector through cost-reflective tariffs. Our focus should be on stabilizing the electricity market, attracting investments, and ensuring reliable and affordable power for all Nigerians, which is key to driving economic development,” he said.
He also stressed the importance of effective leadership and agility in the power sector. “As leaders, our main role is to set a strategic course, inspire our teams, and address challenges with foresight. We must be proactive and adaptable, ready to respond to technological, regulatory, or economic disruptions. Fostering a culture of continuous learning, open communication, and innovation will ensure that we not only survive but thrive in a constantly changing environment,” Adelabu concluded.
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