ABSTRACT
Electricity is fundamental and inevitable to our daily living as it lighting our environment, powers our homes, schools, hospitals, offices, businesses, and aid industrialization, It is a known phenomena that the economic growth of a nation rides on the wheel of electricity. While the telecommunication market in Nigeria has recorded advancement and stability, electricity market in Nigeria is facing mix challenges ranging from slow growth in generation capacity (generation capacity per population index), market deregulation process interference by Government, power lines and equipment vandalism, poor maintenance of the existing power system and corruption.
In the face of the global electricity market trend which focuses on building a cleaner, more diverse and more sustainable electricity mix, secure electricity market investment system that is quality and security proven and affordable, a concerned Nigeria will want to ask “where are we?” This paper focuses on the challenges facing electricity market in Nigeria and suggests possible ways of building a sustainable electricity market in Nigeria.
The Federal Government of Nigeria in the last decade focused its attention on revamping the electrical power sector. This is because it believes that power is the engine thatwill move its economic transformation program forward. It however seems that no matter how much effort put into this sector the problem lingers simply because electricity demand keep rising while power supply remains stagnant and or declining. The main contributions of this article are to provide a review of the electrical power sector in Nigeria, tracing its development through the past decades, determining the challenges confronting the sector and proposing a way forward.
In addressing these challenges, several solutions are presented such as the implementation of the Nigeria Powerenergized by the Electricity Sector Power Reform (ESPR) Act (2005), involvement of the private sector in the Electricity Supply Industry (ESI) and getting the ‘right’ pricing for energy sources such as gas, thermal and hydro. This paper concludes by stressing the importance of the power sector in the development of any nation and proposes ways of improving the generation, distribution, transmission and consumption of electricity in the country.
TABLE OF CONTENT
CHAPTER ONE
Introduction
CHAPTER TWO
2.0Literature review
2.1Nigeria and Energy
2.2Overview
2.3Nigeria Electricity Reforms Historical Trend
2.4THE CURRENT CHALLENGES IN THE ON-GOING ELECTRICITY MARKET REFORM PROCESS
CHAPTER THREE
3.0The Electric Power Sector Reform (EPSR) Act
3.1The Reform Act
3.2National Integrated Power Projects (NIPP)
3.3Independent Power Producers (Ipps)
3.4Opportunities Of The Nigerian Electric Power Sector
3.5Achievements of the EPSR Act
3.6The Future of Electricity Industry in Nigeria.
CHAPTER FOUR
4.0Power Sector National Policy
4.1Major Challenges
4.2Planning and Operations
CHAPTER FIVE
5.0The Future Challenges Of The Electricity Reform Process
5.1Possible Ways Of Building A Sustainable Electricity Market
5.2Conclusion
5.3Reference
INTRODUCTION
Electricity market has been a sensitive arena that continually attracts global attention and forms a top agenda on the to-do menu of virtually all governments globally. The threat it poses to a country’s national economic sustainability, development and appreciable growth are conspicuously visible in the way each country of the world seeks and exploit various alternative energy sources of generating electricity in the most economical and environmental friendly way. In the current United States of America (USA) presidential debate, electricity generation capacity increase has been a major strategy highlighted by both contestants as the roadmap to job creation and national economic improvement.
The trend of economic growth in some Middle (UAE) and Qatar (which is taking world attention) cannot be dissociated from their electric power consumption per capita growth over the years. Likewise, Nigeria had been able to trace the collapse of the industrial sector, small and medium scale businesses and economic standstill (or backwardness) of the nation to the inadequate and erratic state of the country’s electricity market – several commitment by different government of Nigeria, both financial and human capital, has been thrown behind the power sector in Nigeria with its attendance still continuous with target set.
Nigeria is a vast country with a total of 356, 667 sq miles (923,768 sq km), of which 351,649 sq miles (910,771 sq km or 98.6% of the total area) is land. The nation is made up of six Geo-Political Zones subdivided into 36 states and the Federal Capital Territory (FCT). Furthermore, the vegetation cover, physical features and land terrain in the nation vary from the flat open savannah in the North to thick rain forests in the south, with numerous rivers, lakes and mountains scattered all over the country. These national physical and political attributes themselves present challenges for the effective provision of power needs to all nooks and crannies of the country.
To provide adequate power to ensure that Nigeria is among the industrialized nations, three critical activities must be effectively achieved.
•Adequate power must be generated;
•The power must effectively be transmitted to all parts of the country; and
•Finally, be efficiently distributed to the consumers.
Since development and population growth in any country are highly dynamic, these three activities must also be carefully addressed in a dynamic, creative and logical manner.
Adequate power supply is an unavoidable prerequisite to any nation’s development, and electricity generation, transmission and distribution are capital-intensive activities requiring huge resources of both funds and capacity. In the prevailing circumstances in Nigeria, where funds availability is progressively dwindling, creative and innovative solutions are necessary to address the power supply problem.
The administration of President Umaru Musa Yar’adua has already unveiled a mission, setting an agenda of industrializing Nigeria by 2020, which is in the next 10 years. This conference is therefore one of the highest and administrative governing structures that must consider and proffer practicable solutions to the power supply problems in order to achieve this priority goal of the Nigerian Government.
This project work, therefore presents a brief history of the attempts and efforts to supply power to the nation. It also briefly reviews the current status of energy resources, energy demand and supply, power generation, transmission and distribution, power sector national policy, summary of the major challenges and the way forward.
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