Constant blackouts and grid collapses have forced six companies and a private university to take matters into their own hands.
The Nigerian Electricity Regulatory Commission (NERC) has officially approved their exit from the unreliable national grid, granting them licences to independently generate and distribute electricity.
Among the newly approved entities is Nile University in Abuja. Collectively, they are set to generate up to 30 megawatts of electricity under different self-generation arrangements. This bold step is aimed at achieving reliable and uninterrupted power supply, far from the instability of the national grid.
According to NERC’s latest report, Daybreak Power Solutions received an off-grid generation licence with a capacity of 2.63 megawatts. Four other firms secured captive power generation permits totaling 22.50 megawatts. These permits allow companies to produce electricity strictly for internal use.
In the last quarter of 2024, NERC also issued 24 permits for mini-grid projects with a total capacity of 5.5 megawatts. Additionally, five registration certificates were granted for smaller systems below 100 kilowatts. Prado Limited received all 24 permits to set up mini-grids in Benue, Nasarawa, Niger, Ondo, and Kano States. Cross Boundary Energy also secured five permits to distribute power in Kogi State.
To support this independent power infrastructure, NERC certified 18 meter service providers, six installer companies, six manufacturers, three vendors, and three importers. The commission also approved 15 Meter Asset Provider permits during the same period.
This move highlights a growing trend across Nigeria. By September 2024, over 250 manufacturers and academic institutions had abandoned their traditional power distribution companies. These entities, including Dangote Refinery, now generate a combined total of around 6,500 megawatts surpassing the national grid’s struggling output of 5,500 megawatts.
Experts are concerned that this mass departure from the grid could destabilise Nigeria’s already fragile power sector. Minister of Power, Adebayo Adelabu, acknowledged that most bulk electricity users now rely on captive power because of a deep lack of trust in the national grid. He warned, however, that this comes at a steep price. Captive power generation costs between ₦350 and ₦400 per kilowatt-hour for gas systems, and up to ₦1,000 for diesel-powered alternatives.
NERC has attributed this migration to voltage instability within the grid. Spikes, dips, flickers, and brownouts pose significant risks to industrial machinery and often lead to heavy commercial losses. The commission stated that although Nigeria’s grid code mandates a voltage range of 313.50 kV to 346.50 kV, staying within this limit has proven difficult.
The commission continues to work with the Transmission Company of Nigeria and other stakeholders to improve system reliability. However, for many companies, the shift away from the national grid has already begun not out of preference, but necessity.
