The Minister of Power, Chief Adebayo Adelabu, has advocated for the full commercialization of Nigeria’s electricity supply industry, asserting that it is crucial for the sector’s growth. Speaking at the ongoing Nigerian Oil and Gas (NOG) Energy Week in Abuja, Adelabu highlighted that Nigerians spend up to N20 trillion annually on fuel and generator servicing, compared to about N1 trillion on grid electricity.

Adelabu emphasized the need for significant investment in the power sector, pointing out that achieving 70% gas-powered electricity generation would require over five times the current revenue from the domestic gas market. He argued that despite the perceived high cost of grid power, it remains cheaper than self-generation through petrol or diesel generators, as confirmed by a recent study.

The minister announced that presidential approval has been granted to settle legacy debts owed to generation and gas supply companies, a move expected to incentivize these companies to continue their services. He explained that the federal government is focused on restoring confidence in the grid rather than self-generation, noting that grid power is the most cost-effective and efficient option.

Adelabu outlined the current cost of electricity, stating that Band ‘A’ customers pay about N206 per kilowatt hour, compared to N290 per kilowatt hour for gas, N450 for petrol generators, and up to N950 for diesel generators. He urged for collective efforts to develop a national grid that is attractive to electricity users and highlighted Nigeria’s potential for renewable energy sources like solar, wind, and hydro.

He noted that the renewable energy market has seen significant growth, with over $1 billion leveraged by multinational developments such as the World Bank. Adelabu mentioned ongoing discussions with investors to bring in utility-scale solar energy sources, aiming for 3,000MW as demonstrated by the recently completed $550 million Nigeria electrification project.

In line with the Nigeria Energy Transition Plan Vision 30:30, which seeks to achieve 30GW by 2030, the country’s energy mix is projected to be 70% thermal (mostly gas) and 30% renewable. Adelabu called on investors to consider the significant benefits of investing in Nigeria’s renewable energy projects to meet carbon emission targets and combat climate change.