Nigeria curtails power exports to neighbours as domestic shortfall persists

Iben Ejikeme Business 06/05/2024

Estimated reading time: 4 minutes

Nigeria has taken a step to prioritize its own struggling power grid by restricting electricity exports to neighboring Benin, Niger, and Togo. The Nigerian Electricity Regulatory Commission (NERC) implemented a six-month interim order, effective May 1st, 2024, capping the amount of power supplied to these countries at 6% of total grid capacity.

The directive, outlined in a document titled “Interim Order on Transmission System Dispatch Operations, Cross-border Supply, and Related Matters,” will be in effect for six months initially, subject to review.

Nigeria currently supplies electricity to neighbouring countries, including Benin Republic, Niger Republic, and Togo.

NERC’s order, published on Friday, May 3rd was dated April 29, 2024, and effective from May 1, 2024, was jointly signed by the commission’s Chairman, Sanusi Garba, and Vice Chairman, Musiliu Oseni.

The document stipulates that power delivery to Nigeria’s neighbours must not exceed six per cent of the total grid electricity at any given time.

The electricity sector regulator expressed concern about sub-optimal grid dispatch practices, which have impacted the ability of Distribution Companies to meet their Service Tariff commitments to end-user customers.

“The reliance on limiting Discos’ load off-take while prioritizing international off-takers and Eligible Customers has proven neither efficient nor equitable.”

This decision comes amidst a persistent metering gap within Nigeria’s own power sector. Meters are crucial for accurately measuring electricity consumption, allowing for fair billing and improved revenue collection for distribution companies. Without proper metering, many consumers are not billed accurately, leading to financial losses for the system and discouraging investment in generation and transmission infrastructure.

Part of the document read, “The commission hereby orders as follows: The system operator shall develop and present to the commission for approval within seven days from the issuance of this order a pro-rata load-shedding scheme that ensures equitable adjustment to load allocation to all off-takers — Discos, international customers, and eligible customers — in the event of a drop in generation and other under-frequency related grid imbalances necessitating critical grid management.

“The system operator shall implement a framework to log and publish hourly readings and enforce necessary sanctions for violation of grid instructions and contracted nominations by off-takers in line with the grid code and market.

“The aggregate capacity that can be nominated by a generating plant to service international off-takers shall not be more than 10 per cent of its available generation capacity unless in exceptional circumstances a derogation is granted by the commission.“The system operator shall henceforth cease to recognise any capacity addition in bilateral transactions between a generator and an off-taker without the express approval of the commission,” it added.

The NERC’s order prioritizes supplying Nigerian consumers, a move likely welcomed by citizens facing ongoing power outages. However, it could strain relations with neighboring countries who rely on Nigerian electricity imports. Benin, Niger, and Togo may face increased power cuts or be forced to seek alternative, potentially more expensive, sources of electricity.

The situation highlights the complex challenges facing Nigeria’s power sector. While the country boasts significant generation capacity, inadequate transmission infrastructure and metering issues hinder its ability to deliver reliable electricity domestically and fulfill export commitments.

It remains to be seen whether the six-month restriction will be extended. The effectiveness of the measure will depend on Nigeria’s progress in addressing its metering gap. Increased investment in metering infrastructure and stricter enforcement of billing practices could pave the way for a more sustainable solution, allowing Nigeria to meet its domestic needs while potentially resuming exports in the future.