Obviously however, some of the major challenges in the generation and distribution of power supply in Nigeria are enumerated as follows:
1. Illegal connections and overload of network have caused a lot of damage on supply equipment. PHCN has put in place, field officers to investigate and to disconnect electricity supply to all illegal consumers and bring them to book. A massive awareness campaign is also going on to educate the populace on the ills of illegal connection.
2. Settlement of electricity bills: It is interesting to note that from the sale of electricity is used to sustain the electricity industry. Some customers have lukewarm attitude towards settling their electricity bills. To curb this, the Authority has adapted the use of prepayment meters, and the grid meeting system in some areas. Nigeria is known to be the largest purchaser of stand-by generators in world. This indicates that the ability to pay for regular electricity will pose a problem once there is constant supply of electricity. Seeing that there is already a very substantial pen-up demand employing much more expensive alternatives.
3. Rural electrification: PHCN’s goal of electrification for all is a challenge the Authority is determined to achieve, hence the current emphasis on rural electrification. Rural electrification is aimed to the remote areas in the country.
4. Mounting operational cost of production and distributing electricity has its own way, weighed down the operation of the Authority. Cost referred to here includes: cost of imported equipment and spare-parts, cost of overhauling outdated equipment, rising inflation and high foreign exchange rates. The Government has recently financed the rehabilitation, replacement and expansions of the Authority’s equipment and services.
5. Aging equipment: About 13.9% of PHCN’s installed capacity are over 20 years; or 57.1% over 15 years or 79.6% are over 10 years old. These are impediments to PHCN outputs. The Government has taken giant steps by funding the rehabilitation and servicing of generating stations across the country. The recent participation of the Independent Power Producers (IPP) in the electricity industry would also boost electricity in Nigeria.
6. Water level: Nigeria has the hydro power generating stations in Kanji Dam, commissioned in 1968, Jebba built dam, the stream of Kanji and Shiroro dam was commissioned in 1986. Water level of these stations determined the extent of generation of electricity. The drought which occurred on Kanji less than 10 years after construction which was expected though under probability after about 50 years has become a source of worry to the Authority’s inability to provide enough power through the hydro stations.