By Okafor Joseph Afam – January 13, 2025

In response to persistent power outages, nearly 250 manufacturers and institutions, including Dangote Group, NNPCL, and Total, have shifted from relying on Nigeria’s power distribution companies (Discos) to self-generating electricity. Collectively, these organizations now produce 6,500 megawatts (MW) of power, surpassing the nation’s grid generation, which fluctuates between 4,500MW and 5,000MW.

This transition highlights dissatisfaction with high electricity costs, frequent grid collapses, and erratic power supply. Data from the Nigerian Electricity Regulatory Commission (NERC) shows these entities have obtained permits for captive power generation since as early as 2010. The trend accelerated after the enactment of the Electricity Act 2023, enabling firms to produce power for exclusive consumption.

Dangote Leads Captive Power

The Dangote Group is a major player, generating 1,500MW of power. Aliko Dangote, the company’s CEO, disclosed that the Dangote Refinery alone operates a 435MW plant, capable of exceeding the power demand of the Ibadan Electricity Distribution Company. Other significant contributors include Pure Flour Mills Limited (546MW) and Nigeria LNG (360MW).

Universities and Corporates Follow Suit

Several academic institutions, including the University of Lagos, Federal University of Agriculture, and the Nigerian Defence Academy, have also adopted captive power. Companies such as MTN Nigeria, Lafarge Cement, and Shell have embraced the model, with many utilizing gas or renewable energy sources like solar.

Government Concerns

Minister of Power, Adebayo Adelabu, has expressed concern over the exodus from the national grid, citing its economic implications and the high cost of captive power. He emphasized efforts to stabilize the grid and regain bulk electricity users, aligning with the government’s Vision 30-30-30 goal to achieve 30GW by 2030.

Expert Opinions

Power sector experts warn that the departure of bulk electricity users undermines grid stability. Adetayo Adegbenle of PowerUp Nigeria noted, “Bringing these companies back is essential for a stable, cheaper grid.” However, Kola Olubiyo, President of the Nigeria Consumer Protection Network, argued that off-grid solutions enhance energy security and competitiveness for manufacturers.

Regulatory Challenges

NERC attributed the migration to frequent voltage fluctuations and grid instability. It continues to engage stakeholders to ensure adherence to grid standards and improve reliability.

Calls for Renewable Energy Growth

Advocates like Adeola Samuel-Ilori of the All Electricity Consumers Protection Forum have urged the government to incentivize renewable energy adoption, emphasizing reduced import duties on materials to make alternative power more accessible.

Despite the challenges, experts agree that the rise of captive power generation underscores the need for reforms to ensure a reliable and cost-effective power supply for all.