No fewer than 24 bulk electricity consumers were licensed to disconnect from the national grid by generating their own electricity in 2024, as 22 others obtained licences for off-grid generation. In total, the 46 entities would generate up to 289 megawatts of electricity.

According to a latest report by the Nigerian Electricity Regulatory Commission, various companies and institutions got NERC’s approval to generate captive power last year. The commission issues captive power generation permits to entities that aim to own and maintain power plants for generating power for their use and not for sale to a third party.

In January, Sunday PUNCH exclusively reported that as the country battled incessant blackouts, about 250 manufacturers and academic institutions had abandoned their respective power distribution companies to generate their own electricity.

The organisations, many of whom were bulk electricity users, shunned the national grid to generate reliable electricity for themselves, the report stated at the time.

The latest data from NERC showed that a total of 138 megawatts of electricity would be generated by the 22 bulk electricity consumers.

They include SweetCo Foods Limited with 1.50MW; African Steel Mills with 20MW; Armilo Plastics, 1.13MW; Royal Engineered Stones, 4MW; West African Ceramics Limited, 10MW; Ro-Marong Nigeria Ltd, 4.40MW, and Psaltry International Company Limited, 1.10MW.

MTN Nigeria Communication Limited got approvals for 15.94MW in total; University of Abuja got 3MW; University of Calabar & Teaching Hospital was secured 7MW; University of Agriculture Michael Okpara, Umudike, 3MW; University of Maiduguri & Teaching Hospital Main Campus, 12MW; Federal University of Agriculture, Abeokuta Main Campus, 3MW; Federal University Gashuwa, Sabon Gari, 1.50MW; and Nile University of Nigeria Jabi, 10MW.

Nigerian Breweries branches in Aba, Ibadan, Enugu, and others secured approval for a total of 31.36MW; the Nigerian Defence Academy for 2.50MW; and Quantum Paper Limited got 7MW.

Similarly, a total of 22 off-grid licences were issued to various companies, with a cumulative capacity of 151.214 megawatts. Golden Penny Power Limited was given licences to generate a total of 113.20MW with gas in different locations.

The NERC report showed that Daybreak Power Solutions was given nine solar grid licences for a total of 24.51MW. TIS Renewable Energy Limited obtained two licences for gas-powered plants, totalling 12MW, while Auro Nigeria Private Limited secured one licence for a 1.5MW gas plant.

While gas plants accounted for 126.7MW of the off-grid plants, solar was 24.51MW. The licences were issued for off-grid generation projects across various states in Nigeria, including Lagos, Oyo, Ogun, Cross River, Kaduna, Niger, and Abia.

The NERC has blamed the shift from the national grid on power fluctuations and low supply. In one of its statements, NERC said grid frequency is a crucial power quality parameter that industrial customers are particularly concerned about due to the sensitivity of their heavy-duty machinery.

It stated that “in industrial production assembly lines, the machines are designed to operate only within pre-set frequency tolerance limits and therefore often have a low tolerance for frequency fluctuations.

“As specified in section 10.1.2 of the Grid Code, the standard frequency for operation on the Grid is 50Hz. The code provides that under normal circumstances, the grid can operate within a deviation of ±0.5%, i.e., between a lower limit of 49.75Hz and an upper limit of 50.25Hz. Section 10.1.2 of the Grid Code further provides that in extreme circumstances, the grid may operate within a deviation of ±2.5%, i.e., system frequency may reach a lower bound stress limit of 48.75Hz and an upper bound stress limit of 51.25Hz.”

It explained that a system’s stability over a given period is measured by its ability to operate as close as possible to the 50Hz benchmark set in the Grid Code; this means that the lower the range between the average upper daily system frequency and the average lower daily system frequency, the more stable the system has been.

In 2024, the average upper daily system frequency was 50.83Hz, while the average lower daily system frequency was 49.28Hz, which translates to a range of 1.55Hz.

“To guarantee the quality of electricity delivered to end users, the Grid Code specifies a nominal system voltage of 330kV with a tolerance range of ±5 per cent (313.50kV to 346.50kV in the lower and upper bounds, respectively).

“Fluctuations in grid voltage, including spikes, dips, flickers, and brownouts, can cause significant harm to consumers and result in substantial commercial losses. Extreme cases of voltage fluctuations, particularly at the distribution network level, can cause severe damage to industrial machines.

“The average upper and lower operating voltage bounds for the transmission network in 2024 were 352.55kV and 299.42kV, respectively (range of 53.13kV); both values are outside their respective allowable limits, which shows that the grid performance did not comply with the standard specified in the Grid Code,” NERC said.

Recall that the grid collapsed 12 times in 2024, plunging the country into darkness.

In 2021, former President Olusegun Obasanjo dumped the national grid to unveil a two-megawatt solar power project at the Olusegun Obasanjo Presidential Library, Abeokuta, Ogun State. The project, which cost about N2bn at that time, was described by the former President as a remarkably cost-effective investment.

Findings from different data sources, particularly from the Nigerian Electricity Regulatory Commission, showed that the 250 firms that dumped the national power grid, as earlier captured in The PUNCH’s report in January, generated up to 6,500 megawatts of electricity.

This is higher than the country’s power generation, which is currently hovering around 4,500MW and 5,000MW. Further findings indicated that these outlets got permits from the NERC to generate captive power. Some permits were issued as far back as 2010, 2016, 2020, and 2022.

It was learned that the request for captive power generation increased since 2023, especially after President Bola Tinubu signed the Electricity Act 2023. One of the biggest captive power generators is the Dangote Group.

Dangote Industries Limited has generated about 1,500MW of electricity, according to Aliko Dangote. The Dangote refinery alone has a 435MW power plant that can meet the total power requirement of the Ibadan Electricity Distribution Company.

According to data sourced from NERC, 249 firms and institutions were granted permits to generate captive power. The quantum of power generated by these organisations is approximately 5,180MW. When this was added to the 1,500MW generated by the Dangote Group, it amounted to over 6,500MW being generated by the companies and learning institutions.

Worried, the Minister of Power, Adebayo Adelabu, decried the rate at which bulk electricity consumers abandon the national grid to generate their own electricity. Adelabu emphasised that grid connection as a power source is more reliable than captive power plants currently being used by bulk electricity consumers.

He regretted that, despite generating more electricity, the power distribution companies were not taking the power allocated to them to avoid incurring debt due to low recovery.

He said, “The majority of bulk electricity users, such as industries, are off the grid due to a lack of trust and confidence in the past. They now have their own captive power plants in their industries, which is more expensive.”

He stated that efforts would be made to encourage the bulk users to return to the national grid. “Once consumers and industries see the trust, the confidence, and the stability we are giving, they would be encouraged and reconnect to the grid for a cheaper source of power,” Adelabu said.

In his view, the Executive Director of PowerUp Nigeria, Adetayo Adegbemle, expressed concerns over the rate at which bulk consumers dump the grid. According to him, these are the companies that should have been serving as “anchor tenants” to ensure the country has a stable grid.

“Many of the grid collapses we have had can also easily be traced to such consumers leaving the grid, making the demand end of the grid less stable. I have also said before that one of the major objectives, if I were to be in charge of the grid, would be to bring these companies back if we truly want to have a stable and cheaper grid supply,“ Adegbemle said. (PUNCH)