It Costs N120 to Produce 1 kWh of Electricity – Minister of Power Adebayo Adelabu

The Minister of Power, Chief Adebayo Adelabu, has disclosed that it costs the Federal Government approximately N120 to generate one kilowatt-hour (kWh) of electricity in Nigeria.

He emphasized that this high cost is a significant factor behind the government’s continued subsidies to keep electricity affordable for consumers.

Chief Adelabu made these remarks during an oversight visit by the Members of the House Committee on Power to his office in Abuja. He explained that while consumers in electricity Band A pay N209 per kWh and those in Band B pay N65 per kWh, the actual cost of generating electricity far exceeds these amounts. The N120 cost per kWh does not even account for additional charges related to evacuation, wheeling, and distribution within the Nigerian Electricity Supply Industry (NESI).

The Minister said;

“Those in Band A are paying N209 while Band B is paying N65, the average cost of producing one kilowatt per hour of electricity, its generating cost, is not less than N120 before we have the evacuation and wheeling and distribution charges. So anybody paying N65 or N58 is paying way below the cost and that is what the Federal Government is still subsidising.”

He noted that the government is actively working to improve infrastructure in the power sector to enable more consumers to be migrated to Band A, where the tariff is closer to the actual cost of generation.

The Minister also hinted at the possibility of introducing a new tariff policy within the next six months, which could adjust the rates paid by consumers in other bands. However, he stressed the need for caution, particularly in light of recent protests, indicating that the government is being sensitive to public sentiments.

Chief Adelabu also announced that, for the first time in three years, Nigeria’s power sector has successfully generated, transmitted, and distributed 5,155.99 megawatts of electricity. This milestone was reached on August 8, 2024, under the current administration, which inherited an average generation of 4,000 megawatts.

Reflecting on the country’s progress, Adelabu said;

“Precisely on the 8th of August, 2024. When this administration came in, we met an average of 4,000 megawatts of power being generated and transmitted. So I believe that 5,000 megawatts is not something we should celebrate. But if you look at it from the perspective of 5,000 megawatts, 2,000 megawatts were achieved in 1984, for Nigeria. It took us over 35 years to achieve an additional 2,000 megawatts that took us to 4,000.”