Comparative Analysis of Electricity Grid Tariffs Versus Generator Costs in Nigeria

Abstract: The Nigerian electric power industry, pivotal for economic development, faces severe crises affecting its efficiency. This study provides a comparative analysis of electricity grid tariffs and generator costs over the past decade. The analysis reveals frequent tariff changes by the Nigerian Electricity Regulatory Commission (NERC) and rising generator costs due to increasing fuel prices and maintenance expenses. The study highlights the financial burden on Nigerian households and businesses reliant on generators. Data from NERC reports, Nigerian National Petroleum Corporation (NNPC) fuel price records, and industry studies indicate that generator costs have escalated more sharply. At the same time, grid tariffs have increased due to economic and policy changes. This disparity stresses the need for policy adjustments and improved monitoring to stabilise electricity costs and enhance service delivery. Recommendations urge immediate action from policymakers, energy industry professionals, and stakeholders to address the pressing issues.

Privatisation, Regulatory, Renewable, Tariff, Rural Electricity

1. Babatunde, O., Buraimoh, E., Tinuoye, O., Ayegbusi, C., Davidson, I., & Ighravwe, D. E. (2023). Electricity sector assessment in Nigeria: the post-liberation era. Cogent Engineering, 10(1), 2157536. tandfonline.com [Google Scholar] [Crossref]

2. Arowolo, A. L., & Douglas, T. (2022). Electricity generation and renewable energy policy in Nigeria: Resolving the regulatory challenges. American Journal of Environment and Climate, 1(1), 42-53. e-palli.com [Google Scholar] [Crossref]

3. Babatunde, O. M., Ayegbusi, C. O., Babatunde, D. E., Oluseyi, P. O., & Somefun, T. E. (2020). Electricity supply in Nigeria: Cost comparison between grid power tariff and fossil-powered generator. International Journal of Energy Economics and Policy, 10(2), 160-164. zbw. eu [Google Scholar] [Crossref]

4. Heinemann, G., Banzer, F., Dumitrescu, R., Hirschhausen, C. V., Neuhoff, M. E., & Nwadiaru, V. O. (2022). Transforming electricity access by replacing back-up generators with solar systems: Recent trends and evidence from Nigeria. Renewable and Sustainable Energy Reviews, 157, 111751. tu-berlin.de [Google Scholar] [Crossref]

5. Oladigbolu, J. O., Ramli, M. A. M., & Al-Turki, Y. A. (2020). Feasibility study and comparative analysis of hybrid renewable power system for off-grid rural electrification in a typical remote village located in Nigeria. IEEE Access. ieee.org [Google Scholar] [Crossref]

6. Aguda, O. O. (2023). Constitutional and Institutional Governance of Electricity Sector in Nigeria. Journal of Energy Research and Reviews. go4publish.com [Google Scholar] [Crossref]

7. Babalola, A. (2023). The role of the private sector in developing Sub-Sahara Africa: why governance matters. manchester.ac.uk [Google Scholar] [Crossref]

8. Osasu, O. (2022). Application of the Standard Liberalization Prescription to Nigeria's Electricity Sector-Legal, Comparative and Theoretical Perspectives. [HTML] [Google Scholar] [Crossref]

9. Saturday, E. G. (2021). Nigerian power sector: a new structure for effective and adequate power generation, transmission and distribution. Global Journal of Engineering and Technology Advances, 7(1), 006-018. gjeta.com [Google Scholar] [Crossref]

10. Edomah, N., Ndulue, G., & Lemaire, X. (2021). A review of stakeholders and interventions in Nigeria's electricity sector. Heliyon. cell.com [Google Scholar] [Crossref]

11. Edet, E. (2020). The Nigeria Electricity Sector: The Journey Thus Far and the Future. unilaglawreview.org [Google Scholar] [Crossref]

12. Ole, N. C. (2020). The Nigerian electricity regulatory framework: hotspots and challenges for off-grid renewable electricity development. Journal of Energy & Natural Resources Law. researchgate.net [Google Scholar] [Crossref]

13. Babajide, A. & Brito, M. C. (2021). Solar PV systems to eliminate or reduce the use of diesel generators at no additional cost: A case study of Lagos, Nigeria. Renewable Energy. sciencedirect.com [Google Scholar] [Crossref]

14. Jacal, S., Straubinger, F. B., Benjamin, E. O., & Buchenrieder, G. (2022). Economic costs and environmental impacts of fossil fuel dependency in sub-Saharan Africa: A Nigerian dilemma. Energy for Sustainable Development, 70, 45-53. [HTML] [Google Scholar] [Crossref]

15. Aigbe, G. O., Stringer, L. C., & Cotton, M. (2023). Gas Flaring in Nigeria: A Multi-level Governance and Policy Coherence Analysis. Anthropocene Science. springer.com [Google Scholar] [Crossref]

16. Ugwoke, B., Gershon, O., Becchio, C., Corgnati, S. P., & Leone, P. (2020). A review of Nigerian energy access studies: The story told so far. Renewable and Sustainable Energy Reviews, 120, 109646. academia.edu [Google Scholar] [Crossref]

17. Koch, D. A. (2023). Engineering Accident Analysis through Memetic Decision Tree Mapping. proquest.com [Google Scholar] [Crossref]

18. Adebayo, A. V. (2018). Allocation of transmission losses to determine the tariff. Cape Town: University of Cape Town. [Google Scholar] [Crossref]

19. Palmer, M., Ireland, J., Ofterdinger, U., & Zhang, M. (2022). Net Zero Pathways. qub.ac.uk [Google Scholar] [Crossref]

20. Zebra, E. I. C., van der Windt, H. J., Nhumaio, G., & Faaij, A. P. (2021). A review of hybrid renewable energy systems in mini-grids for off-grid electrification in developing countries. Renewable and Sustainable Energy Reviews, 144, 111036. sciencedirect.com https://www.energymrc.ng/nerc-half-year-report-q1-and-q2-2023/ [Google Scholar] [Crossref]

21. Vaka, M., Walvekar, R., Rasheed, A. K., & Khalid, M. (2020). A review of Malaysia's solar energy pathway towards carbon-neutral Malaysia beyond the Covid-19 pandemic. Journal of cleaner production. nih.gov [Google Scholar] [Crossref]

22. Klug, T. W., Beyene, A. D., Meles, T. H., Toman, M. A., Hassen, S., Hou, M., & Jeuland, M. (2022). A review of impacts of electricity tariff reform in Africa. Energy Policy, 170, 113226. google.com [Google Scholar] [Crossref]

23. Kumar, M., Poudineh, R., &Shamsuddin, A. (2021). Electricity Supply Industrial Reform and Design of Competitive Electricity Market in Malaysia. Oxford Institute of Energy Study. [Google Scholar] [Crossref]

24. Coady, D., Jahan, S., Machado, F., Gu, M. (2023). The Distribution and Fiscal Implementation of Public Utility Pricing. https://www.elibrary.imf.org/downloadpdf/view/journals/001/2023/article-A001-en.pdf [Google Scholar] [Crossref]

• Anomaly Based Detection of Chronic Obstructive Pulmonary Disease Using Machine Learning
• Carbon Dioxide (CO2) Emission on Agricultural Land Use and its Impact on food Production
• Structural Characterization of High Resolution Aeromagnetic Data for Potentially Mineralized Zones Identification Within the North-Central Basement Complex of Nigeria
• Advancing U.S. Business Interests Abroad: Leveraging Technology to Optimize Cross-Border Operations
• Semi-Dynamic Mobile-Based Virtual Reality System for University