More manufacturers are opting for captive power as the national grid continues to struggle despite billions being spent on it yearly.
Approximately 250 manufacturers and academic institutions have opted out of the national grid for captive power.
Captive Power Generation is the generation of electricity exceeding 1 MW for the purpose of consumption by the generator itself and not sold to a third party.
These manufacturers and academic institutions are currently generating a combined 6,500 megawatts (MW) of captive power to meet their electricity needs.
Dangote Group is one of the largest electricity producers as it produces about 1,500MW with 435MW coming from its refinery alone. This is enough to meet the total power demand of the Ibadan Electricity Distribution Company (IBEDC).
“We don’t put pressure on the grid. We produce about 1,500 megawatts of power for self-consumption,” said Aliko Dangote during the Afreximbank Annual Meetings and AfriCaribbean Trade & Investment Forum in Nassau, The Bahamas.
Data from the Nigerian Electricity Regulatory Commission (NERC) reveals that the total captive power generated by these entities now surpasses the national grid’s output, which fluctuates between 4,500MW and 5,000MW.
The total permits issued for captive power generation by NERC is about 249 for both firms and institutions with some permits dating back as far as 2010.
Some of the firms with issued these licenses were Pure Flour Mills Limited which currently produces 546MW and Nigeria LNG, generating 360MW.
Others include United Cement Company of Nigeria Limited (105MW), Total E & P Nigeria Limited (174MW) and Flour Mills of Nigeria Plc (70MW).
Captive power adoption gained momentum in 2023 after the signing of the Electricity Act 2023 by President Bola Tinubu.
Academic institutions have also embraced this model with universities like the University of Lagos, Obafemi Awolowo University and the University of Benin leading the way.
The Nigerian Defence Academy recently secured a permit to generate 2.5MW, further indicating widespread adoption of captive power generation across various sectors.
