By Feyishola Jaiyesimi
LAGOS, NIGERIA — A growing number of corporate organisations in Nigeria are abandoning the national electricity grid, as persistent power supply challenges and rising energy costs continue to threaten business operations across the country.
In a recent development, no fewer than 11 companies, including the Nigeria Revenue Service (NRS), have secured approval to generate their own electricity, marking a significant shift toward self-sufficiency in power generation. The move underscores declining confidence in the reliability of Nigeria’s public electricity supply.
The organisations involved include Yongxing Steel Company Limited, Abuja Steel Mill Nigeria Limited, Accugas Limited, T&D West Africa Limited, Vinylon Footwear Industry Limited, Standard Plastic Industry Nigeria Limited, Watson’s Bakery Nigeria Limited, Nigerian Spanish Engineering Limited, Superior Eva Footwear Nigeria Limited, and Wihi International Limited.
Shift to Captive Power
Findings show that these firms have obtained permits to generate a combined total of about 130.19 megawatts (MW) of electricity through captive power systems. This allows them to operate independently of the national grid, ensuring a more stable and predictable power supply.
Heavy manufacturing firms dominate the list, with Abuja Steel Mill Nigeria Limited and Yongxing Steel Company Limited accounting for a substantial share of the new capacity, generating 50MW and 45MW respectively.
Industry analysts say the decision to invest in captive power is largely driven by the need to maintain uninterrupted production, protect sensitive equipment, and reduce long-term operational risks associated with erratic electricity supply.
Mounting Challenges in the Power Sector
Nigeria’s power sector has long been plagued by systemic challenges, including inadequate generation capacity, weak transmission infrastructure, and frequent grid collapses. Businesses have repeatedly raised concerns over the impact of unreliable electricity on productivity and profitability.
Many companies report that reliance on the national grid often results in unplanned downtime, increased maintenance costs, and reduced efficiency. As a result, self-generation despite its high initial cost is increasingly seen as a more viable alternative.
Economic Implications
Experts warn that the continued exit of large power consumers from the national grid could have far-reaching consequences for the country’s electricity market. A decline in demand from industrial users may weaken the financial sustainability of power distribution companies, further exacerbating existing challenges in the sector.
Additionally, the shift could widen the gap between businesses that can afford alternative power solutions and smaller enterprises that remain dependent on the grid.
A power sector analyst noted that the trend reflects a broader lack of confidence in public utilities, adding that “when even government-related institutions opt out of the grid, it sends a strong signal about the state of the system.”
Widening Energy Gap
Nigeria currently generates less than 5,000MW of electricity for a population exceeding 200 million people, far below the estimated demand of over 30,000MW. This significant shortfall continues to hinder economic growth and industrial development.
Stakeholders have repeatedly called for urgent reforms, increased investment, and improved policy implementation to address the country’s energy deficit.
Conclusion
The decision by NRS and other firms to exit the national grid highlights a critical turning point in Nigeria’s power sector. While captive power offers a lifeline for businesses, it also raises concerns about the long-term viability of the national grid and the need for comprehensive reforms to restore confidence in the system.
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