Nigeria Power Market Size and Trends by Installed Capacity, Generation, Transmission, Distribution, and Technology, Regulations, Key Players and Forecast, 2021-2030
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This report discusses the power market structure of Nigeria and provides historical and forecast numbers for capacity, generation, and consumption up to 2030. Detailed analysis of the country’s power market regulatory structure, competitive landscape, and a list of major power plants are provided. The report also gives a snapshot of the power sector in the country on broad parameters of macroeconomics, supply security, generation infrastructure, transmission and distribution infrastructure, electricity import and export scenario, degree of competition, regulatory scenario, and future potential. An analysis of the deals in the country’s power sector is also included in the report.
Nigeria power market overview
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Thermal power will continue to dominate annual generation in Nigeria till 2030
Thermal power generation share in Nigeria was more than 80% in total generation in 2020 and is expected to increase further by 2030. The country has the 9th largest natural gas reserves in the world and the largest in Africa which has resulted in the growing dominance of thermal power generation in the country. According to the Department of Petroleum Resources, Nigeria’s proven gas deposits has risen to 206.53 trillion cubic feet (tcf) in 2020 from 203.16 tcf in 2019. The proven gas reserves in the country have been on a continuous rise since last few years and a similar trend in the coming years will result in thermal power continue to dominate the annual generation in the country. The country has minimal oil and coal-fired capacity, and it is not expected to increase much during the 2021 to 2030 period. This will result in gas-fired plants to continue to dominate the annual generation within thermal sources.
How is the Nigerian power market structured?
The Federal Ministry of Power is responsible for policy formulation and coordination in the power sector, including renewable energy and energy efficiency. The Electric Power Sector Reform Act (EPSRA), 2005 is the key legislation that allowed for the power sector reforms in Nigeria. The Act also made provision for the creation of key entities in the power sector like the Nigerian Electricity Regulatory Commission (NERC). The commission oversees regulating the sector (including licensing) and ensuring compliance of stakeholders with regulations of the market.
Who are the key players in the Nigerian power market?
The power generation segment in Nigeria is dominated by Egbin Power Plc. It is followed by Sapele Power Plc, Transcorp Ughelli Power Plc, Afam Power Plc, and Mainstream Energy Solutions Limited. Transmission Company of Nigeria (TCN) is the sole electricity transmission network operator in Nigeria. The company ensures continuity in electricity supply and is also engaged in developing, expanding, and maintaining the transmission network in Nigeria. The TCN was licensed by the NERC and NESREA in 2006 and has operated as the sole transmission company in Nigeria since then. The electricity distribution sector in Nigeria has been completely privatized with the creation of 11 zones that were sold to the private sector in an open competitive bidding process. Electricity distribution in these 11 zones is managed by 11 distribution companies. These companies are also responsible for the supply of electricity to the end users. The major distribution companies in Nigeria are Abuja Electricity Distribution Company, Benin Electricity Distribution Co Plc, and Eko Electricity Distribution Company.
Nigerian power market, by key players
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Where are the opportunities in the Nigerian power market?
A huge range of opportunities have opened in the Nigerian power sector because of its power sector reforms. Five generation companies and 11 distribution companies were privatized in 2013, and investors have hinted at increasing their investment in the country’s power sector, which have not been upgraded for many years. There is also a significant need for imported equipment to replace or refit old machinery. A similar situation exists for power transmission and distribution, which needs refurbishment. Although transmission has not been privatized, management has been entrusted to a private player. It is expected that with the start of a market-based electricity exchange system in the country, more investment will flow into the system.
What are the challenges faced by the Nigerian power market?
High dependence on thermal sources for power generation, particularly gas-fired plants, is a cause of concern. In 2020, the country generated around 81% of its power from gas-based plants. High dependence on a single source for power generation can endanger the supply security of the country. The country should diversify its generation mix by increasing the share of renewables. The country may also increase the share of hydropower as this technology has a good scope for expansion in Nigeria.
How has COVID-19 affected the Nigerian power market?
Nigeria was significantly affected due to the COVID-19 pandemic in 2020. To curb the spread of COVID-19, the Nigerian Government imposed strict national lockdowns in the country. This resulted in temporary closure of industrial and commercial establishments in the country which caused reduction in demand. The real GDP of the country declined by more than 1% in 2020 as compared to 2019.
With respect to power sector, the electricity consumption in the country was not affected due to the pandemic. Gas processing projects in the country witnessed delays due to movement restrictions and slump in gas demand during the pandemic. For instance, in April 2020, Nigeria LNG announced that construction of the $10 billion Train 7 at the Nigeria LNG Terminal would be delayed until Q3 2020 due to the COVID-19 pandemic. As a part of the COVID-19 recovery strategy, the Nigerian Government approved in June 2020 the $5.9 billion Nigerian Economic Sustainability Plan. Under this plan, the government made a $619 million commitment to the Solar Homes Systems Project, which will help install solar home systems for up to 5 million households, serving about 25m individual Nigerians who are not currently connected to the national grid.
Market report scope
Cumulative power capacity (Year – 2020) | 15.4 GW |
Base year for estimation | 2020 |
Market overview by | Capacity & generation, and transmission & distribution |
Forecast period | 2021–2030 |
Key companies | Egbin Power Plc, Sapele Power Plc, Transcorp Ughelli Power Plc, Afam Power Plc, Mainstream Energy Solutions Limited. |
This report provides a comprehensive analysis of the power market in Nigeria and contains the following sections;
- The executive summary captures the key trends in the country’s power market.
- The “Nigeria Power Market, Snapshot” section provides a snapshot of the key parameters that affect the country’s power sector, as well as key points about the country’s power market including opportunities, challenges, and the impact of COVID-19.
- The “Nigeria Power Market, Market Analysis” section provides the market structure, generation market share, deals, and demand structure.
- The “Nigeria Power Market, Regulatory Scenario” section details the regulations and policies in the country’s power sector.
- The “Nigeria Power Market, Capacity and Generation” section provides information on cumulative installed capacity and annual generation trends, by individual generation source.
- The “Nigeria Power Market, Transmission and Distribution Overview” section discusses the power T&D infrastructure, grid interconnections, and electricity trading.
- The “Nigeria Power Market, Major Generating Companies” section discusses the major electricity generating companies in the country.
Reasons to Buy
- Identify opportunities and plan strategies by having a strong understanding of the investment opportunities in the country’s power sector
- Identify key factors driving investment opportunities in the country’s power sector
- Facilitate decision-making based on strong historic and forecast data
- Develop strategies based on the latest regulatory events
- Position yourself to gain the maximum advantage of the industry’s growth potential
- Identify key partners and business development avenues
- Identify key strengths and weaknesses of important market participants
- Respond to your competitors’ business structure, strategy, and prospects
Sapele Power Plc
Transcorp Ughelli Power Plc
Afam Power Plc
Mainstream Energy Solutions Limited
Table of Contents
Table
Figures
Frequently asked questions
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What is Nigeria’s total cumulative power capacity?
Nigeria’s total cumulative power capacity in 2020 was 15.4 GW.
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Who are the major power generation companies in Nigeria’s power market?
The power generation segment in Nigeria is dominated by Egbin Power Plc, Sapele Power Plc, Transcorp Ughelli Power Plc, Afam Power Plc, and Mainstream Energy Solutions Limited.
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What is the leading source of power capacity in Nigeria?
Thermal power generation was the dominant source of power in 2020, accounting for more than 85% of total installed capacity.
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Who regulated Nigeria’s energy policy?
Nigeria’s energy policy is regulated by The Federal Ministry of Power. The Federal Ministry of Power is responsible for policy formulation and coordination in the power sector, including renewable energy and energy efficiency.
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What is the annual power consumption in Nigeria?
Power consumption increased from 8.6 TWh in 2000 to 28.3 TWh in 2020, growing at a CAGR of more than 6%.
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What sector is the leading driver of Nigeria’s power consumption?
In 2020, the residential sector had the dominant share in power consumption accounting for more than 55%.
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Who owns and operates Nigeria’s transmission network?
Transmission Company of Nigeria (TCN) is the sole electricity transmission network operator in Nigeria. The company ensures continuity in electricity supply and is also engaged in developing, expanding, and maintaining the transmission network in Nigeria.
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