A Review of the Nigerian Energy Industry

Stakeholders demand increased gas supply to power plants

ERERA Power lines10 April 2014, Lagos – Experts have demanded for increased supply of gas to the country’s power sector, saying this is one of the critical issues that require urgent attention in order to stimulate efficient power delivery in the country.

This was the focus of one of the plenary sessions on Tuesday at the ongoing seventh Lagos Economic Summit in Lagos.

The stakeholders also urged government at all levels to increase efforts at eliminating vandalism of pipelines and power transmission equipment as they noted that the menace of those behind the act was a major stumbling block to the availability of power in the country.

A former Minister of Power, Prof. Barth Nnaji, who was the lead speaker at the session, said there was a need to conduct an audit into the power demand of the entire country, just as Lagos State had done.

This, according to him, is one of the ways to achieve efficient electricity supply.

He said, ‘‘We cannot know the amount of power we need unless we do an audit. So, Lagos was right when it said it required 10,000 mega watts.  If Lagos with a population of 20 million needs 10,000MW, you can imagine what Nigeria with about 170 million people needs. So, that means something has to be done.’’

The former minister noted that the country would not be able to accelerate its socio-economic growth unless the power challenge was overcome, stressing that the top 20 countries of the world such as China,  which is currently the world’s largest producer of power, South Africa and Mexico generated power in excess of their demand.

Nnaji canvassed the proper alignment of the entire value chain of power generation, transmission and distribution, the development of emergency power system, increased partnership with Independent Power Plant producers, the creation of necessary institutional frameworks and facilitation of an enabling environment.

This, he said, would go a long way to accelerate power delivery to the state.

The Chairman, Falcon Petroleum Limited, Mr. Chima Ibeneche, who chaired the session, said the security of investment, the right pricing and efficient usage of available electricity were also critical considerations to accelerate the delivery of power to the state.

He said, “There should be efficiency in power generation and distribution in order to sustain the delivery of power to Lagos. The pricing must also be right, otherwise power can be priced out of the reach of many consumers because if the price is not efficient, it can make the downstream use of power uneconomic.

‘‘Again, we will also need to ensure that regulatory and law enforcement agencies work together so that those who are making efforts and investment to bring power to Lagos can ensure revenue is delivered.’’

The Commissioner, Rates and Market Competition, Nigerian Electricity Regulatory Commission, Mr. Eyo Ekpo, said to accelerate power delivery, there was a need to remove all the impediments identified by various speakers while the state government should consider tax incentives and other institutional reforms that could encourage the private sector to invest in the power opportunities in the state.

He said, ‘‘Government can provide or acquire the land, facilitate right of way for gas pipeline and transmission equipment, reduce taxes or give some kind of tax incentives. All these can help to accelerate the delivery of power to the state.”

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