Following collection and analysis of data, the study reveals that three major factors characterized Nigeria’s electricity sector that had a direct impact on Nigeria’s energy transition and energy systems change. These are:
-
Changing perceptions and goals (during the period leading up to Nigeria’s independence, 1890–1960s)
-
Direct government interventions (1940s – 1970s)
-
Major changes in market rules (from 2005 and beyond)
The following sub-sections now delve into further details around the aforementioned themes.
4.1 Changing perception and goals on Nigeria’s electricity system (1890–1960s)
The study revealed that changing perception and goals of Nigeria’s electricity systems were manifested in three main ways:
-
Changing motives for energy infrastructure provision
-
Intermittent switch in energy fuels
-
Changes in energy technology in use
With respect to changing motives for energy infrastructure provisions, the study revealed that initial provision of electricity infrastructure were motivated by the need to light up settlements and government offices mostly occupied by Europeans. Lighting was the primary motive for the provision of the first power plant in Nigeria, the Lagos Marina station as shown in Table 1. The increased demand for electricity beyond lighting application led to the expansion of existing plants and the provision of new ones as shown in Table 1. The need to power the workshops of the Nigerian Railway Corporation (NRC) for the maintenance of locomotives triggered the next wave of power plant expansion. In the Plateau region of Nigeria, the need to provide electricity to support mining activities for Tin was another motivation for provision of electricity infrastructure in that region. The topography of the region (being a high plateau) supported the provision of the first hydropower plant in Nigeria. Indeed, lighting, powering of NRC workshops, supporting the Tin mines and powering government offices and government settlements were key motives for the provision of electricity infrastructure in pre-independent Nigeria.
Table 1
Summary of electricity infrastructure provision in colonial Nigeria
(Source: Author compilation)
s/n
|
Power station/supply
|
Year
|
Capacity
|
Fuel type
|
Technology type
|
Main application
|
End-user group
|
1
|
Lagos Marina Station
|
1896–1920
|
30KW which grew to 420KW
|
Diesel
|
Steam engines
|
Lighting application
|
Mainly Europeans
|
2
|
Iddo Power Station
|
1923
|
3.6MW which grew to 13.75MW
|
Coal
|
Coal-fired steam engines
|
Lighting and Railway workshops
|
Mainly Europeans
|
3
|
Plateau Electricity Supply (owned by the Nigeria Electricity Supply Company – NESCO – a British company
|
1922–1945
|
2MW which grew to 12MW (with peak load at installed capacity of 18.4MW)
|
Hydro
|
Hydro-electric plant
|
Lighting applications and mining industry
|
European settlements and Tin mines
|
4
|
Enugu Electricity Supply
|
1922–1953
|
3 X 350KW plant which grew to 3000KW by 1953
|
Diesel
|
Steam engine plants
|
Lighting and industry
|
Nigerian Eastern Railway (NER) workshops, European settlements, Church, and Barack
|
5
|
Nigerian Railway Plant Port-Harcourt
|
1928
|
2250KW that grew up to 8530KW
|
Diesel
|
Steam engines
|
Industry application (transport)
|
Nigerian Railway Corporation (NRC) workshops
|
6
|
Kaduna Northern Province Head Quarters
|
1929
|
8.28MW installed capacity
|
Diesel
|
Steam engines
|
Lighting, residential and administrative uses
|
Government offices and residential areas
|
Fuel source for the power plants also constituted a vital part of electricity infrastructure decisions. The study revealed that during colonial Nigeria, most power plants built depended on diesel as its fuel source which at the time was imported from the United Kingdom. However, the discovery of coal in Nigeria in 1909 triggered the use of coal for the Iddo power station that was commissioned in 1923. Indeed, the study further revealed that the discovery of coal did not really change the energy fuel trajectory from diesel to coal. However, it was observed that more diesel power plants were installed up to 1940 as shown in Table 2.
Energy technology also played a dominant role in the provision of electricity infrastructure in Nigeria. The study revealed that the dominant technology for most power plants that were deployed in Nigeria between 1890 and 1940 were steam engine technologies that were either diesel-fired of coal-fired power plants. The only exception was the hydropower plant built in the plateau region due to the advantages presented by the topography of the region. Indeed, the study revealed that there was a case of technological lock-in to the use of steam engine technologies which was interrupted (and completely halted) by the Second World War since it now became impossible to get maintenance spares for the plants owing to the war.
Some other power stations that came on stream are listed in Table 2, together with their capacity, location and institution responsible for its provision.
Table 2
Other electrical infrastructure provision in Nigeria (1933–1940)
(Source: Author compilation)
s/n
|
Location
|
Institution Responsible
|
Year
|
Capacity (KW)
|
1
|
Katsina
|
Native Authority
|
1933
|
100
|
2
|
Maiduguri
|
Public Works Department (PWD)
|
1934
|
210
|
3
|
Abeokuta
|
Native Authority
|
1935
|
600
|
4
|
Yola
|
Public Works Department (PWD)
|
1937
|
75
|
5
|
Zaria
|
Public Works Department (PWD)
|
1938
|
1436
|
6
|
Calabar
|
Public Works Department (PWD)
|
1939
|
570
|
7
|
Warri
|
Public Works Department (PWD)
|
1939
|
530
|
8
|
Ibadan
|
Native Authority
|
1940
|
4515
|
4.2. Direct government interventions (1940s – 1970s)
The study reveals that government intervention in the provision of electricity infrastructure was evident through the establishment of institutions that were given the mandate to address a specific challenge that served as a barrier to the diffusion, spread and expansion of new and existing electricity infrastructure to cater for the growing energy needs. Table 3 provides a summary of various government interventions in electricity infrastructure, institutions responsible and their central focus.
Table 3
Direct government interventions in Nigeria’s electricity infrastructure provision
(Source: Author compilation)
s/n
|
Year
|
Institution
|
Main mandate/focus
|
1
|
1940s
|
Nigerian Government Electricity Undertaking (NGEU)
|
Design a plan to increase electricity generation capacity by at least 200% to support industrialization
|
2
|
1950s
|
Electricity Corporation of Nigeria (ECN)
|
Provide the cheapest form of energy consistent with continuity of supply
|
3
|
1960s
|
Electricity Corporation of Nigeria (ECN)
|
Address issues and concerns about electrical standards due to repeated fires in Lagos caused by electrical faults
|
4
|
1960s
|
Niger Dams Authority (NDA)
|
Develop Nigeria’s hydropower potwntial
|
5
|
1970s
|
National Electric Power Authority (NEPA)
|
Take charge of provision, operation and maintenance of electricity infrastructure nationwide
|
In the 1940s, the Nigerian Government Electricity Undertaking (NGEU) was established by the British colonial government out of the Public Works Department (PWD) to design a plan to increase electricity infrastructure provision by at least 200% to pave the way for industrialization in Nigeria. This intervention led to the establishment of several industries in different parts of the country starting from the early 1950s. Indeed, by 1970, there were more than 2000 industries scattered around different industrial estates in Nigeria. The NGEU, which was set up as a holding company, eventually morphed into a new corporation in the 1950s called the Electricity Corporation of Nigeria.
The Electricity Corporation of Nigeria (ECN) was the second major institutional intervention set up by the Nigerian government with a mandate of seeking ways of providing the cheapest form of energy that is consistent with continuity of supply. The ECN was established on 6th July 1950 but only took over from the NGEU on 1st April 1951. The ECN continued with their established mandate. However, frequent cases of fire outbreaks owing to electrical faults necessitated an intervention by the Nigerian government to further extend the mandate given to the ECN (in the 1960s) to include developing standards for electrical equipment and devices to help curtail the frequent fire incidences.
The study further revealed that in the 1960s, government interventions on electricity infrastructure provision led to the establishment of the Niger Dams Authority (NDA) with a clear mandate of developing Nigeria’s hydropower potential. This intervention led to the planning and provision of several large dams in Nigeria, particularly Kainji, Jebba and Shiroro dams.
The need to have a coordinated system where one central institution of government can take charge and responsibility for everything that has to do with electricity infrastructure in Nigeria led to the establishment of the National Electric Power Authority (NEPA) in the 1970s. NEPA came about as the result of a merger of the Niger Dams Authority and the Electricity Corporation of Nigeria.
Indeed, the study further revealed that there were other interventions that were mainly private interests. The Nigerian Electricity Supply Company (NESCO), a British company, and the African Timber and Plywood Company (AT&P) are examples of such. Table 4 shows the number of power station s in Nigeria as of 1952 and the institutions responsible for its provision.
Table 4
Number of Power station in Nigeria, Institutions responsible and their capacity as of 1952
(Source: Author compilation)
s/n
|
Responsible institutions
|
Number of power plants
|
1
|
ECN
|
17
|
2
|
NESCO
|
1
|
3
|
AT&P
|
1
|
4
|
Planned and under construction
|
17
|
s/n
|
Responsible institutions
|
Power generated (in million KW)
|
1
|
ECN
|
89.1
|
2
|
NESCO
|
66.6
|
3
|
Industrial undertakings
|
9.5
|
|
TOTAL
|
165.2
|
The study also revealed that several government interventions led to widespread diffusion and provision of several electricity infrastructure. As of 1953/54, there were a total of 43,659 electricity consumers in Nigeria. With respect to electricity consumption patterns in the 1953/54 fiscal year, about 50.3% of electricity produced was consumed through various forms of domestic applications, closely followed by power requirements which took about 33.1%. Commercial applications was responsible for 12.7% of total electricity consumption while public lighting and other miscellaneous uses took 1.7% and 2.2% respectively of total electricity consumption as shown in Fig. 3.
5.3. Major changes in market rules (from 2005 and beyond)
The study revealed that major changes in market rules played an important role in the governance of energy transition in Nigeria. Some key events leading to changes in market rules in Nigeria’s electricity sector that had some impact on Nigeria’s energy transition are highlighted in Table 5.
The liberalization of the Nigerian electricity sector was a major reason for changes in market rules. This process started in 2001 with the introduction of the National Electric Power Policy (NEPP) which paved the way for the production of the National Energy Policy (NEP) framework in 2003. The NEP framework provided a basis for the preparation and enactment of the Electrical Power Sector Reforms Act (EPSRA) in 2005. The EPSRA act provided the legal/regulatory backing that aided the liberalization process of the Nigerian electricity sector. This act paved the way for the establishment of the Power Holding Company of Nigeria (PHCN), a holding company that was eventually unbundled to eighteen companies comprising six generation companies, one transmission company and eleven distribution companies.
The study revealed that the liberalization of the Nigerian electricity market also opened up other opportunities for Nigeria by providing a platform for the establishment of some important agencies of government or some regulations to address specific challenges within the Nigerian power sector. An example is the formation of the Nigerian Electricity Regulatory Commission (NERC) saddled with the responsibility of regulating the activities of various players within the Nigerian electricity sector. The Renewable Energy Policy Guideline (REPG) and the Renewable Action Program (REAP) were instrumental in paving the way for large scale deployment of solar home systems and off-grid solutions. National biofuels policy formulated in 2007 paved the way for the production of a national guideline of the use of biofuels. Indeed, these various changes in market rules were instrumental in the liberalization of the Nigerian electricity market which paved the way for the inclusion of cleaner on-grid and off-grid energy sources to Nigeria’s energy mix.
Table 5
Key events leading to changes in market rules in Nigeria’s electricity sector (2000–2015)
(Source: Adapted from [42])
s/n
|
Year
|
Events impacting market rules
|
1
|
2001
|
National Electric Power Policy (NEPP) initiated
|
2
|
2003
|
National Energy Policy (NEP) framework produced
|
3
|
2004
|
National Economic Empowerment and Development Strategies (NEEDS) issues to address development challenges (including energy)
|
4
|
2005
|
Electric Power Sector Reform Act (EPSRA) enacted
|
5
|
2005–07
|
Formation of the Nigerian Electricity Regulatory Commission (NERC);
The formation of the Power Holding Company of Nigeria (PHCN); and the eventual unbundling of the PHCN into 18 companies
|
6
|
2006
|
Renewable Energy Policy Guideline (REPG) released, together with the Renewable Energy Action Program (REAP)
|
7
|
2007
|
National Biofuels Policy and incentives were formulated
|
8
|
2008–09
|
Multi-Year Tariff Order (MYTO) was established while the Power Sector Reforms Committee was formed
|
9
|
2010
|
The Presidential Task Force on Power (PTFP) and the Presidential Action Committee on Power (PACP) were established.
The Power Sector Roadmap was released
|
10
|
2012
|
MYTO 2 was approved and released
|
11
|
2013
|
Privatization of generation and distribution companies was effected. Transmission was retained by the government but managed under a management contract agreement (by Manitoba Hydro International – MHI)
|
12
|
2015
|
Commencement of the Transitional Electricity Market (YEM) regime.
Tenure of the NERC Commissioner ended (Dec)
MYTO 2.1 approved and released but faced opposition from consumer groups (with proposed 80% price increase which was later reduced by 25%
Draft Rural Electrification Strategy & Plan (RESP) released. The National Renewable Energy & Energy Efficiency Policy (NREEEP) was also released
|