The Nigerian Revenue Service has joined a growing number of institutions turning away from Nigeria’s troubled electricity grid, after securing approval to generate its own power.
According to the fourth quarter 2025 report by the Nigerian Electricity Regulatory Commission (NERC), the agency obtained a captive power generation permit for a 6.08-megawatt plant at its headquarters in Abuja’s Central Business District.
The development underscores a widening shift among both public and private organisations seeking alternatives to the unreliable national grid, which has been plagued by persistent outages and system collapses.
The move comes shortly after the Aso Rock Villa reportedly invested billions of naira in solar power installations, further highlighting the growing reliance on self-generated electricity at the highest levels of government.
Wave of Captive Power Projects
The NRS decision forms part of a broader trend, as NERC approved 11 captive power permits within the same period, with a combined capacity exceeding 130 megawatts.
Major beneficiaries include Abuja Steel Mill Nigeria Limited (50 MW) and Yongxing Steel Company Limited in Edo State (45 MW), alongside several other manufacturing and industrial firms across the country.
This surge reflects a deepening lack of confidence in the national grid, with industries increasingly opting for independent power solutions to maintain operations.
Implications for the Power Sector
Energy analysts warn that the growing shift to captive generation could have far-reaching consequences for Nigeria’s already fragile electricity market.
Large consumers exiting the grid weaken the revenue base of distribution companies, exacerbating liquidity challenges and reducing the incentive for investment in grid infrastructure.
At the same time, smaller businesses and households—unable to afford self-generation—may face worsening supply conditions as the system loses high-value users.
The trend has been partly enabled by reforms such as the Electricity Act 2023, which liberalised the sector and made it easier for organisations to develop independent power projects.
Shift Toward Decentralised Energy
Beyond captive plants, NERC also issued 31 mini-grid permits with a combined capacity of 8.37 MW, particularly targeting underserved communities in states including Benue, Nasarawa, Cross River, Taraba, and Delta.
Experts say this points to a gradual shift toward decentralised electricity solutions in Nigeria, as both urban and rural consumers seek more reliable alternatives.
A System Under Pressure
Current estimates indicate that over 250 manufacturers, institutions, and large commercial entities have either partially or fully exited the national grid, collectively generating about 6,500 MW—surpassing the grid’s average output.
Major industrial players like the Dangote Group are reported to generate significant power independently, while estates, malls, and factories increasingly rely on hybrid energy systems.
While self-generation offers operational stability, analysts caution that unless major consumers return to the grid, Nigeria’s power sector could face prolonged structural challenges.
For now, what was once considered a temporary workaround has become a long-term survival strategy in Africa’s largest economy.