Amid persistent blackouts and serial outages, over 250 manufacturers, academic institutions, and bulk electricity users have abandoned their respective power distribution companies (DisCos) to generate their own electricity. These entities, many of whom are heavy electricity consumers, have opted for self generation to ensure a steady and reliable power supply.
This shift comes in response to the national grid’s instability, rising electricity costs, increased fuel prices, and frequent grid collapses. For instance, former President Olusegun Obasanjo unveiled a N2bn solar power project in Abeokuta in 2021 to reduce reliance on the national grid.
How Captive Power Generation Addresses The Challenges
Data from the Nigerian Electricity Regulatory Commission (NERC) reveals that firms with captive power generation permits now produce over 6,500 megawatts (MW) of electricity. This is significantly higher than the grid’s current output of 4,5005MW. The demand for captive power permits surged after the 2023 Electricity Act, which enabled entities to establish power plants for exclusive use.
Captive power generation allows companies to avoid the inefficiencies of the national grid. Permits, issued as far back as 2010, cover renewable energy sources like solar and gasbased systems.
Dangote and Leading Firms Power Ahead Amid Serial Outages
The Dangote Group stands out as one of the largest independent power producers, generating 1,500MW for selfconsumption. Aliko Dangote noted, “We produce 1,500MW of power, significantly easing pressure on the national grid.”
Other firms with significant captive power contributions include Nigeria LNG (360MW), Pure Flour Mills Limited (546MW), Total E&P Nigeria Limited (174MW), and Lafarge Cement (105MW). Academic institutions like the University of Lagos, Obafemi Awolowo University, and Bayero University have also joined this trend.
Serial Outages Create Costly Challenges for Firms
Grid instability causes severe financial and operational losses for industries. Voltage fluctuations, spikes, and line trippings often damage industrial equipment, forcing companies to explore alternative power solutions. Captive power generation, though costlier at N350N400/kWh for gasbased systems and N950N1,000/kWh for dieselbased systems, offers a reliable energy source compared to the erratic grid.
Government Efforts to Reverse the Effects of Serial Outages
Minister of Power Adebayo Adelabu acknowledged the exodus of industries from the national grid, attributing it to a lack of trust and reliability. He emphasized the Federal Government’s commitment to stabilizing the grid and achieving 30GW of power generation by 2030, as outlined in Vision 303030.
Adelabu noted, “We aim to restore trust and confidence in the national grid by ensuring stability and affordability. Once achieved, industries will reconnect to access cheaper power.”
Experts Weigh In on the Impact of Serial Outages
Experts warn that the departure of bulk electricity users could destabilize the power grid further. Adetayo Adegbenle, Executive Director of PowerUp Nigeria, emphasized that bringing these companies back to the grid is essential for stability. “The grid’s demand and generation must remain balanced to maintain frequency at 50Hz. Losing highdemand users makes the grid more dependent on residential consumers, which is unsustainable,” he said.
Similarly, Kola Olubiyo, President of the Nigeria Consumer Protection Network, described the grid as “increasingly unreliable.” He advocated for renewable energy incentives and investment in offgrid solutions to enhance energy security and competitiveness for manufacturers.
The Future of Captive Power Amid Serial Outages
As serial outages persist, stakeholders believe a mix of renewable energy, government incentives, and improved grid infrastructure will shape Nigeria’s power landscape. Adeola SamuelIlori, Coordinator of All Electricity Consumers Protection Forum, called for reducing import duties on renewable energy materials to make alternative power accessible to more Nigerians.
He noted, “Encouraging individuals to adopt renewable energy will reduce pressure on the national grid and minimize collapses. This approach ensures sustainable power supply while addressing the sector’s inefficiencies.”
Industries and Institutions Leading the Captive Power Revolution
Industries such as MTN Nigeria, NNPCL, and Total E&P Nigeria Limited have embraced captive power generation, while institutions like the Nigerian Defence Academy now operate independent power systems. These entities demonstrate a growing trend toward energy independence as they move away from reliance on DisCos.
