In a bold move to tackle the rising cost of electricity and frequent power fluctuations, Nigerian Breweries Plc and several universities in Nigeria have obtained permits to generate their own electricity. The Nigerian Electricity Regulatory Commission (NERC) granted these permits during the third quarter of 2024, allowing the entities to produce captive power exclusively for their use.
Nigerian Breweries, the nation’s leading beverage company, received approval to generate up to 41 megawatts (MW) of electricity across its facilities in Abia, Oyo, and Enugu states. Captive power generation ensures that the electricity produced is solely for the consumption of the generating entity and cannot be sold to third parties.
Universities and Defence Academy Join Captive Power Initiative
In addition to Nigerian Breweries, six universities and the Nigerian Defence Academy were also granted permits to generate electricity. The institutions aim to improve energy supply reliability and reduce their dependence on the national grid, which has been plagued by repeated grid collapses and power supply challenges.
The breakdown of the permits includes:
- University of Abuja: 3MW
- University of Calabar & Teaching Hospital, Cross River: 7MW
- University of Agriculture Micheal Okpara, Abia: 3MW
- University of Maiduguri & Teaching Hospital, Borno: 12MW
- Federal University of Agriculture, Abeokuta, Ogun: 3MW
- Federal University Gashuwa, Yobe: 1.5MW
- Nigerian Defence Academy, Kaduna: 2.5MW
With these approvals, the institutions can now generate a total of 32MW of electricity, providing much-needed energy stability for their operations.
Rising Electricity Costs Force Institutions to Act
The decision to generate power independently comes in the wake of skyrocketing electricity bills faced by universities and hospitals. After the Federal Government removed subsidies on electricity in Band A feeders—customers expected to receive a minimum of 20 hours of daily power supply—institutions struggled to cope with the financial burden.
For example, the College of Medicine of the University of Lagos and the Lagos University Teaching Hospital jointly reported a sharp increase in their May 2023 electricity bill to N280 million, up from less than N100 million previously. Similarly, the University of Benin saw its monthly bill rise from N80 million to N250 million, while the Federal University of Technology, Akure’s bill jumped from N20 million to N60 million.
Prof. Ademola Tayo, Vice-Chancellor of Babcock University, Ogun State, described the situation as unsustainable. “In May, we paid N300 million as electricity tariff. This high cost is a great threat to quality education in Nigeria,” he lamented.
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Benefits of Captive Power Generation
Captive power generation offers a practical solution to the dual challenges of high electricity costs and erratic supply. By producing their own power, institutions like Nigerian Breweries and the universities can ensure stable energy for their daily operations while avoiding the frequent outages that disrupt activities on the national grid.
NERC explained that captive power generation is becoming increasingly popular following the signing of the Electricity Act 2023, which opened the door for more companies and institutions to leave the national grid.
NERC’s Progress in Metering and Regulation
In addition to granting permits for power generation, NERC made progress in other areas during the review period. The commission certified seven Meter Service Providers, five-meter installer companies, and two-meter manufacturers. It also issued 22 permits for Meter Asset Providers and rolled out 50 orders to regulate licensees’ activities.
With these developments, Nigerian Breweries and academic institutions are taking a significant step toward achieving energy independence and addressing the challenges posed by Nigeria’s electricity sector. The move is expected to improve efficiency and reduce operational costs, particularly for educational institutions battling high tariffs and unstable supply.