Estimated figures from the Association of Nigerian Electricity Distributors (ANED), the umbrella body of DisCos in Nigeria, suggests that Nigeria requires about 30,000 megawatts of power to meet current demand and encourage industrialisation. Between the hydro and thermal power plants, Nigeria has the capacity to generate about 17,000 megawatts of power. However, it is currently only able to generate 4,000 megawatts on average.

In an ideal situation, 1,000MW is projected to serve a cluster of one million people; and with Nigeria’s population at over 200 million people, actual demand should be around 200,000MW. Transmission and distribution therefore remain strong pain points in Nigeria’s power story, with just about 37,000km of transmission infrastructure, and 20,000km of distribution infrastructure across eleven power distribution companies.

As a result of the huge gap between expected power consumption levels and actual power delivery, self-generation in Nigeria has become a mainstay; with nearly 14 Gigawatts of installed capacity existing in small to medium-scale diesel and petrol generators. Industries self-generate approximately 50% of the total energy consumed, representing about $14billion (40cents per kwh) annually on inefficient generation according to Rural Electrification Agency.

With a seemingly diverse economy stretching across sectors – information and communications technology, agriculture, manufacturing, service etc., all characterised by high degree of import dependency and low productivity levels due to limited power infrastructure; the development of Nigeria’s industrial sector has been hampered largely by inadequate power supply, impacted by various issues relating to the transmission network and distribution infrastructure. Although, the recent signing of the Electricity Act 2023 represents a crucial milestone for Nigeria’s electricity and has the potential to address the power problem as it empowers states, private companies, and individuals to generate, transmit and distribute electricity.

While we continue to seek improved policies and government efforts towards better electricity generation, the big question is, how can we make self-generation more efficient?

In the context of Nigeria’s industrialisation, captive and embedded power solutions have played significant roles in addressing the country’s electricity shortages and greatly supported the growth of our domestic industry, a clear example exists in the development of power solutions for residential estates and industrial areas in Nigeria.

Self-generation can be achieved using captive power solutions while embedded power solutions can further promote private sector involvement and help to expand and improve access via distribution companies.

  • Captive Power – Refers to the generation of electricity by a consumer or a group of consumers for their own use, typically within a specific industrial or commercial facility.
  • Embedded Power – Refers to small-scale power generation units that are integrated into the distribution network.

Captive and embedded power projects utilising natural gas can significantly reduce the reliance on diesel for electricity generation, which is a major source of air pollution in Nigeria’s cities.

Over the past decade, Axxela has played a pivotal role in bridging the power deficit in Nigeria by expanding its investment in energy distribution via natural gas pipelines. We have also demonstrated sufficient expertise in power development, with the construction and operation of power plants within the Lagos area. In 2010, we developed a 12.14MW capacity Independent Power Plant (IPP) for the Lagos Water Corporation in Akute and a 10.40MW in 2013 for the Lagos State Government Secretariat in Alausa Ikeja. Our most recent development is a 5.8MW captive power solution in 2022 for one of our large FMCG customers in Lagos.

Our captive power solution is cost effective and combines superior technology and modern equipment with international best practices and processes. Axxela leverages its strategic access to best-in-class technology across Europe and Asia via our plethora of OEM partners, and its bouquet of natural gas solutions (pipeline, CNG, LNG), supported by our pool of experienced employees and world class business operations.

The customers for the power solution make little or no investment towards the IPP development and are billed for energy consumed as agreed in the contractual agreement (Power Purchase Agreement). This model helps to reinforce our commitment to providing gas and power to our customers on a reliable and sustainable basis, and to continue to deliver value added innovative energy solutions across Nigeria and the region.

With over $500 million infrastructure development in the past 20 years, and extensive investment across the natural gas value chain, we are committed to developing Africa’s energy landscape and supporting businesses to drive operational efficiency via cost-effective energy plans. We are an enabler for national economic development, providing industries with the required gas and power advantage to accelerate their growth objectives.