Decentralized Electrification in Nigeria - Essay Example

Many countries around the world with much less natural resources have many times better power situation. Astoundingly so, Nigeria is the world’s sixth largest oil producer and yet the Nigerian government is unable to provide a stable electricity supply. The electricity in Nigeria is controlled by state-controlled agencies. The supply is the main part of this distribution network which is controlled by state-controlled Power Holding Company of Nigeria (PHCN) this company was formerly called the National Electorate-ownedAuthority.

The decentralization of the electric power supply is taking place worldwide. For many decades power generation had been a totally the nationalized industry. The supply, however, could not match this extra demand being generated by the growing economic Nigerian sector. The IPP sector has seen many ups and downs over the years. The energy giant Enron went bankrupt and brought expectations from the power sector back to reality. This was a major setback to the private energy sector globally. The solution to problems being faced by Nigeria lies in policies which the could combine decentralized generation and privatization of the power sector.

The decentralized generation has different forms and names. In some studies, it is called dispersed generation, decentralized generation or distributed energy. There can be many, different decentralized generation projects such as wind, solar, nuclear or even small hydroelectric plants. The centralized generation plants can produce electricity in large quantities therefore just like any large mass-producing body they enjoy the economies of scale. However extremely large quantities of capital are required for these plants and opportunities are limited for, large-scale centralized generation such as hydroelectric plants.