Nigeria imports most of the fuel which it consumes, despite having large reserves of gas and oil. Electricity is generated in hydro and thermal power plants. Due to power shortages, the commercial and industrial sectors often use privately operated diesel generators to supply electricity.
In ‘The Global Competitiveness Report 2011-2012’, the World Economic Forum, Nigeria was ranked at 139 out of 142 countries in terms of the quality of electricity supply, with a value of 1.5, 3.3 below average. Angola, Lebanon and Nepal were the three countries that scored lower in this respect.
According to the World Bank, electric power consumption in Nigeria was 121 kWh per capita in 2009, compared to 127 in 2008 and 138 in 2007. This is considerably lower than in neighbouring Cameroon (271 in 2009) but considerably higher than in neighbouring Benin (91 in 2009).
According to the World Bank, access to electricity in Nigeria in 2009 was 50.6%. This compares to 60.5% in Ghana, 48.7% in Cameroon and 24.8% in Benin. Most Nigerians with access to electricity are those living in urban areas.
According to a report released in 2011 by the Presidential Task Force on Power (PTFP), Nigeria has the biggest gap between supply and demand for electricity in the world. It noted that about 70% of power supply in Nigeria came from state-owned power plants. It declared its expectation that, with reform, 70% of power supply will come from the private sector by 2014 or 2015.
Traditionally, the Power Holding Company of Nigeria (PHCN), a state enterprise, had the monopoly of public distribution of electricity in the country. However, in 2012 the National Council on Privatisation (NCP) announced its commitment to the privatisation of the PHCN. In March 2005, the National Assembly passed the Electric Power Sector Reform Act which allowed private companies to invest in and operate power companies in Nigeria.
One of the main sources of renewable energy in Nigeria is hydroelectricity. Hydroelectricity contributed about 38.5% of the total grid electricity production between 1999 and 2004. The National Agency for Science & Engineering Infrastructure (NASENI) has launched a number of renewable energy projects; in 2011 NASENI announced its intention to establish a 7.5MW solar panel manufacturing plant at Karshi, Abuja through a joint venture project with a foreign partner. The Council for Renewable Energy in Nigeria (CREN) is a not-for-profit multi-stakeholder association which promotes the appropriate use of renewable energy technology in Nigeria. In 2010 the World Bank said it is committing over 200 million US dollars towards the implementation of renewable energy projects in Nigeria, in order to enhance rural electrification.
The Nigerian Electricity Regulatory Commission (NERC) is an independent regulatory agency which monitors and regulates of the electricity industry, issues licences to market participants, and ensures compliance with market rules and operating guidelines. The first Commission was inaugurated in October 2005, and the present Commission was inaugurated in December 2010.
