Stakeholders seek manufacturers’ integration to national grid

Stakeholders said Nigeria’s power sector policy must be anchored on industrialisation, warning that manufacturers’ continued reliance on alternative energy sources is weakening the national grid and increasing electricity costs for residential consumers.

Executive Director of PowerUp Nigeria, Adetayo Adegbemle, told The Guardian that the Federal Government needs to reverse the trend where industries are disconnecting from the grid, as this has left residential consumers shouldering the burden of sustaining the network, making tariffs more costly.

“We have allowed the big guns to escape the national grid, pushing the load of sustaining it onto residential consumers. The tariff becomes more expensive for them, while producers continue to seek alternatives, albeit more costly. The Federal Government should, as a matter of urgency, reverse this trend.

“I have previously mentioned how the money manufacturers are spending on alternative energy sources should be reeled into the national grid—first, to ensure grid stability, and then to reduce the cost of grid electricity,” he said.

He emphasised that reintegrating industries into the grid would enhance industrial competitiveness, create jobs, lower production costs, ensure grid stability, reduce tariffs for consumers, and increase electricity generation with reliable off-takers and payments. He further argued that a stable and well-utilized grid would also reduce the government’s electricity subsidy burden.

An electricity market analyst, Lanre Elatuyi, told The Guardian that industries and manufacturers are not relying on the grid because maintaining grid reliability at nominal frequency and voltage has been a challenge for grid operators.

He explained that industries operate machines that are frequency-sensitive to power, and when frequency and voltage exceed operational limits, the machines could be damaged. To avoid losses caused by damaged equipment, these industries prefer to rely on captive generation.

“So, if you cannot maintain that balance between demand and supply on the grid, manufacturing becomes the major problem. They need to stay on the grid because grid power is cheaper than captive generation.

“However, the key question is: do we have an available and reliable generation in Nigeria that can supply every customer, including industrial customers, when they need it?” he asked.

Elatuyi emphasised that industries and commercial customers must be properly metered to avoid estimated billing. He highlighted the importance of grid reliability, noting that frequent grid collapses and an unreliable power supply disrupt manufacturing processes, which is one of the key reasons manufacturers are increasingly exiting the national grid.

“The government policy on eligible customers keeps changing. The requirement for eligible customers was about two megawatts (MW) before, but now it has been escalated to about six, 10, or even 20MW. Even at 2MW, they couldn’t meet the target, so these are some of the reasons why they can’t stay on the grid,” he said.