In a move aimed at tackling high electricity costs and boosting industrial energy efficiency, the Energy Commission of Nigeria (ECN) has introduced a new policy and regulatory framework designed to help industrial players cut operational expenses while promoting cleaner production technologies.
The initiative, unveiled during a validation workshop in Abuja, is expected to enhance Nigeria’s industrial energy performance, aligning with the country’s push for sustainable economic growth and environmental protection. However, while the policy has been welcomed as a positive step, industrialists and analysts insist that the root cause of high energy costs in Nigeria is insufficient power generation, which remains a major bottleneck to industrial competitiveness.
The policy, titled “Improving Nigeria’s Industrial Energy Performance and Resource Efficient Cleaner Production through Pragmatic Approaches and the Promotion of Innovation in Clean Technology Solutions,” was formally launched by the Director-General of ECN, Dr. Mustapha Abdullahi.
Register for Tekedia Mini-MBA edition 17 (June 9 – Sept 6, 2025) today for early bird discounts. Do annual for access to Blucera.com.
Tekedia AI in Business Masterclass opens registrations.
Join Tekedia Capital Syndicate and co-invest in great global startups.
Register to become a better CEO or Director with Tekedia CEO & Director Program.
Dr. Abdullahi emphasized that the new regulations would provide industries with the tools and knowledge to conserve energy, leading to lower electricity bills and improved efficiency.
“We are unveiling the new regulations and also a policy for industrial players to be able to use electricity and conserve it safely. With that, we are sure that electricity costs will be reduced. There are two key things here to note—energy generation and energy efficiency. If you generate energy, no matter the volume, if you are not using it efficiently, then it will be wasted,” Dr. Abdullahi said.
Nigeria’s industrial sector has long grappled with crippling electricity costs, which have hindered competitiveness and growth. By advocating for energy conservation and encouraging industries to adopt clean technologies, the ECN aims to create a more cost-effective and sustainable energy ecosystem.
Industry Players Say Insufficient Power Generation is the Real Problem
While the initiative is seen as a step in the right direction, industrialists and energy analysts argue that energy efficiency alone cannot solve Nigeria’s high electricity costs. The real problem, they say, is that Nigeria simply does not generate enough electricity to meet demand.
Currently, Nigeria generates a little over 5,000 megawatts (MW), a figure that fluctuates due to grid instability and maintenance challenges. This falls significantly short of the estimated 30,000MW required for a stable power supply in the country.
Due to the severe energy deficit, industries are often forced to rely on diesel-powered generators, which drive up operational costs and reduce productivity. The high cost of self-generated power has made many Nigerian industries uncompetitive, particularly when compared to their counterparts in countries with stable and affordable electricity.
Economists believe that if Nigeria had sufficient power generation within a fully liberalized electricity market, competition among power suppliers would naturally drive down energy costs for industries.
“Largest economy in Africa distributed just 4,118.98MW in 2021. There is no way you grow GDP without power supply. This is a problem. There has been good progress on independent solar projects, accelerate that,” Kalu Aja, a financial analyst, said.
Currently, Nigeria’s power sector remains partially controlled by the government, with price regulation limiting the ability of private players to invest aggressively in electricity generation and distribution.
ECN Launches Industrial Energy Efficiency Compendium
As part of the initiative, the ECN also launched a compendium of industrial energy efficiency policies, regulations, and standards, which serves as a consolidated resource for policymakers, industry stakeholders, and regulators.
Dr. Abdullahi described the compendium as a “living document,” meaning it will be regularly updated to incorporate new policies and technological advancements.
“The compendium is not exhaustive and will continue to exist as a living document, as it will need to be updated as new policies emerge in the future,” he explained.
This reference guide is expected to support industries in implementing energy-efficient measures, thereby enhancing productivity and reducing environmental impact.
Manufacturers Call for More Action on Power Generation
The Manufacturers Association of Nigeria (MAN) has welcomed the new energy efficiency policy but insists that addressing Nigeria’s energy crisis requires a more holistic approach.
Speaking on behalf of MAN’s Director-General, Segun Ajayi-Kadiri, the association’s Liaison Officer, Michael Olufemitan, stressed that reducing energy costs requires more than just conservation efforts.
“Our nation’s industrial sector holds significant potential to not only enhance productivity, but also reduce environmental impact through the adoption of clean technologies and sustainable practices. By focusing on resource efficiency and innovation, we can unlock new opportunities for job creation, economic diversification, and environmental sustainability,” he said.
The new policy aligns with Nigeria’s broader energy transition strategy, particularly efforts to increase the adoption of renewable energy, reduce reliance on fossil fuels, and improve energy security for industries.
While the new framework is a significant milestone, experts warn that policy announcements alone are not enough—the key challenge lies in effective implementation.
Industry players have called for increased investment in power generation to meet the country’s energy demands. There is also a growing demand for a truly liberalized electricity market that encourages competition and reduces prices.