Nigeria Power Market Trends 2024

Thermal Power Is Expected to Dominate the Market

Thermal energy generating sources are one of the major electricity generation sources in the country. The country's significant gas potential is expected to aid in the growth of thermal energy sources during the medium term.

Nigeria has significant reserves of natural gas, which serves as a primary fuel for thermal power generation. The country's natural gas reserves are among the largest in the world. This abundance of fuel resources makes thermal power generation a reliable and readily available option for meeting the country's growing electricity demand.

Moreover, Nigeria already has an established infrastructure for thermal power generation, including power plants, pipelines, and gas supply networks. This infrastructure provides a foundation for the continued dominance of thermal power generation. It enables efficient fuel supply, transmission, and distribution, making operating and expanding thermal power plants cost-effective.

Power line and graph arrow. Energy crisis. Concept of global energy crisis. Increase in electricity consumption. The arrow on the chart moves up. Increasing the cost of electricity.

According to the Nigerian Electricity Regulatory Commission, the thermal power generation capacity increased by almost 8% between the first and second quarter of 2022, signifying the heavy reliance of the country's power sector on thermal power sources.

Moreover, utilizing domestic fuel resources, such as natural gas, for thermal power generation enhances energy security for Nigeria. By relying on indigenous fuel sources, the country can reduce its dependence on imported energy and mitigate the risks associated with fluctuating international fuel prices or supply disruptions.

For instance, in March 2023, a 50 MW gas-fired power plant was commissioned in the Maiduguri region to provide access to electricity to the people living in the region. Therefore, due to the abovementioned points, the thermal segment is expected to dominate during the forecasted period.

Thermal Analysis culled from Mordor Intelligence for ADVAD Limited.

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