Nigeria Power Market - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)
The Nigerian power market is expected to register a CAGR of approximately 13% during the forecast period (2022-2027). The COVID-19 pandemic has positively impacted the distribution of electricity in Nigeria. For instance, in Lagos, Nigeria's largest city, 43% of total electricity demand comes from the residential sector. Under the lockdown scenario, there was a sharp increase in residential electricity demand by up to 49%, resulting in power distribution companies facing a shift in electricity demand and changes in energy load allocation. This factor called for more EPC or modification projects in the power infrastructure. The Nigerian power market is largely driven by favorable government policies and a growing inclination toward privatization of the power sector, which can draw more investment in the sector. However, the absence of proper infrastructure in the power sector, with a lack of skilled local labor, is expected to hinder the power market in the country.
Key Highlights· Nigeria's renewable power generation capacity was around 2,153 MW in 2020. The government is currently planning to introduce more programs to promote cleaner power generation sources to power the urban and rural areas of the country.
· The Renewable Energy Master Plan (REMP) promotes the deployment of renewable-based power generation systems in the country. As a part of this, in 2020, the Nigerian government launched the Naija Solar Power Project, which targeted around 5 million solar-based connections for off-grid communities.
· In April 2021, the same project was launched in the Jangefe Roni Local Government Area of Jigawa State. According to the government, these projects will likely be implemented in other areas like Edo, Lagos, Adamawa, Anambra, Kebbi, and Plateau in the first phase. The entire country will be covered in the next phase.
· The country aims to increase the supply of renewable electricity to meet the electricity demands of rural areas. The Renewable Energy Association of Nigeria (REAN) is encouraging investments in this sector.
· At the end of 2020, hydropower accounted for about 12.5% of its on-grid energy in Nigeria. Following the current trend, this sector will witness huge investments, which may boost the growth of the country’s renewable power generation.
· Due to such developments, renewable-based electricity generation is expected to become a major driver of the power sector in the country in the future.
Competitive LandscapeThe Nigerian power market is moderately consolidated. Some of the major power-generating companies include Afam Power PLC, Egbin Power PLC, and Toshiba Corporation. Some of the major transmission and distribution companies include Transmission Company of Nigeria and Abuja Electricity Distribution Company PLC.
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