The Rise of Captive Power Generation in Nigeria
The Nigerian Revenue Service (NRS) has joined a growing trend of major organizations moving away from the country’s unreliable national electricity grid. This decision comes as persistent power outaways continue to disrupt businesses and government operations across Nigeria. The NRS has secured approval for its own power generation, with a 6.08-megawatt plant at its headquarters in Abuja’s Central Business District.
This move follows the Aso Rock Villa’s significant investment in solar energy installations. It is part of a broader shift towards self-reliance in power supply, driven by the loss of confidence in the national grid. As both private companies and public institutions struggle with frequent outages, many are turning to alternative solutions to ensure uninterrupted operations.
In the fourth quarter of 2026, the Nigerian Electricity Regulatory Commission (NERC) approved 11 captive power permits, with a total capacity exceeding 130 MW. Notable recipients include:
- Abuja Steel Mill Nigeria Limited with 50 MW
- Yongxing Steel Company Limited with 45 MW in Edo State
- T&D West Africa Limited Lake in Abuja (1.25 MW)
- Vinylon Footwear Industry Limited in Jigawa (6 MW)
- Nigerian Spanish Engineering Limited (6 MW)
- Standard Plastic Industry Nigeria Limited in Kano (7 MW)
- Watson’s Bakery Nigeria Limited in Kano (2.26 MW)
- Superior Eva Footwear Nigeria Limited in Kano (5 MW)
- Wihi International Ltd along the Lagos-Ibadan Expressway (3.40 MW)
These developments highlight the deepening crisis in Nigeria’s power sector. Despite repeated promises of improvement, the national grid remains unstable, forcing industries to rely on costly diesel generators. This not only increases production costs but also reduces competitiveness.
The irony of the situation lies in the fact that the NRS, which is responsible for mobilizing revenue for the government, is now opting out of the national grid. This signals that even critical federal operations cannot depend on the central electricity infrastructure.
Decentralized Solutions and Mini-Grids
Beyond captive power, NERC also issued 31 mini-grid permits during the same period, adding a gross capacity of 8.37 MW. These projects are concentrated in states such as Benue, Nasarawa, Cross River, Taraba, and Delta. They reflect a growing interest in decentralized solutions, particularly in underserved rural and semi-urban areas.
The commission further certified additional meter service providers and issued permits to companies like Haventill Synergy Limited for metering infrastructure across several states. These efforts aim to address estimated billing and improve collection efficiency.
Structural Shifts in the Electricity Sector
Analysts note that the trend of captive power generation points to a structural shift in Nigeria’s electricity landscape following the Electricity Act 2023. This legislation liberalized the sector, making it easier for large consumers to develop independent power facilities.
While this provides relief to those who can afford it, it raises concerns about the future of the national grid. High-value customers continuing to exit the grid could weaken the revenue base of distribution companies.
With industrial and institutional players increasingly building parallel power systems, experts warn that ordinary Nigerians may bear the brunt of the crisis for longer. The central grid loses both demand and investment momentum, exacerbating the existing challenges.
Self-Generated Power: A Strategic Choice
Self-generated power is no longer an emergency measure but a strategic choice for survival in Nigeria’s power-deficient economy. Across the country, more than 250 manufacturers, tertiary institutions, and large commercial entities have either partially or fully exited the national grid to generate their own electricity. Together, they are estimated to produce about 6,500 MW — more than the grid currently supplies on average.
The Dangote Group alone generates about 1,500 MW for its operations. Industrial estates in Lagos and Ogun, shopping malls in Abuja and Port Harcourt, and high-income residential estates across major cities now rely heavily on captive power plants or hybrid solar-diesel systems.
For these entities, the cost of self-generation—though high—is considered preferable to the unpredictability of the national grid. An energy expert, Adetayo Adegbemle, argued that unless bulk consumers like manufacturers return to the grid, the sector will continue to battle a liquidity crisis.
