Abstract
Electricity supply in Nigeria is a huge problem with great economic and political consequences. After unbundling and privatization of generation and distribution companies, not much improvement has been experienced by electricity consumers; this is due to lack of investment in infrastructure. Lack of investment in infrastructure especially from private investors is caused largely by non-cost reflective tariff among other factors highlighted in this study. While many believe tariff has to be controlled such that it does not go beyond the reach of average citizens, many also believe that the average citizens can pay much more than the current tariff. The latter is evident considering the average amount spend on the use of portable gasoline generators by most homes and small enterprises both in rural and urban centers. The whole life cost method is used to show here that it costs a home or business premise that operates a portable gasoline generator for 6 h daily NGN 37,000/ month and costs NGN 157,000 to operate 20 kVA diesel generator. This shows the consumers’ capacity to pay the appropriate tariff that can attract investors to the sector.
Highlights
In order to enjoy electricity when needed, most Nigerian homes and businesses have resulted to the use of captive gasoline and diesel generators due to poor electricity supply from the grid
Social-economic behavior: Apart from the aforementioned factors that result in the challenges in the electricity sector in Nigeria, it is rather inconsistent that low-income households and small businesses whose electricity cost and sources are studied can afford to pay multiples of cost reflective tariffs in generating their own power on site
The greatest challenge to the Nigeria electricity supply industry is lack of infrastructure, investment is required from all stakeholders: government and private investors
Summary
In order to enjoy electricity when needed, most Nigerian homes and businesses have resulted to the use of captive gasoline and diesel generators due to poor electricity supply from the grid. 5-year whole life-cycle cost analysis was carried out for a 3.3 kVA and 20 kVA gasoline and diesel generators respectively operated for 6 h daily; the cost is analyzed monthly and compared with an equivalent cost of electricity from the grid.
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