A Review of the Nigerian Energy Industry

Why power shortage persists — NERC

nerc108 May 2014, Abuja – The Nigerian Electricity Regulatory Commission, NERC, has clarified why industries and homes in the country are still having acute power shortage  more than six months after government handed over to new investors in the power sector.

Dr. Sam Amadi, Chairman of the Commission, while addressing the business community under the aegis of the Nigerian-Danish Chamber of Commerce, Industry and Agriculture, said that things were not going as envisaged but that radical steps were being taken to address the situation.

In “November 1st last year to April 30th is just about six months and it is a very little time for an industry that is so finance – sapping and structurally- chained to have achieved much,” he said.
He blamed the slow turn-around on vandalisation of power infrastructure across the country, specifically those targeted at disrupting gas flow to various power stations.

Represented by Dr. Uche Okoro, Special Assistant Research and Strategy, NERC, he said that poor choice of location of some National Integrated Power Projects, NIPPs, and the fact that the new investors were not able to do the required six months’ shadow trading prior to taking over from the government contributed to the problems.

He added that the investors were not well acquainted with baseline losses, baseline demand and baseline gas supplies in their various jurisdictions due to labour stand-offs with government. “One thing that is sure is that Nigeria needs electricity to power its industrialisation and when we get it right, economies of scale tell us that all the smaller countries around us are going to source electricity from us because they cannot produce,” he said.

Nigerian and Danish investors at the event were of the notion that the recent reform in the power sector has not made any significant progress in rectifying the acute shortage of power to industries and service providers in Nigeria prior to the sector’s recent reform.

Ben Koya Adako, President Nigerian-Danish Chamber of Commerce, noted that the theme of the meeting, ‘Power sector reform: Overcoming institutional and regulatory challenges in an era of liberalisation, was apt, more so now that electricity was undergoing a major reform in the country.

“There is still much to be done to really stabilise the business and economic environment as a condition for the private sector to thrive and indeed realise installed capacity and boost production.

“While we duly support the on-going power reform, we are not oblivious of the fact that electricity generation is still far from the huge expectations that heralded the reform. From the challenges of the Discos, finance, gas, infrastructure, power distribution to metering, the dynamics of the reform are pretty complex. Yet we believe that the reform is the way to go as we crave for expeditious turn-around. At the end of the day, the overall interest is the availability of power to run the various industries and factories,” he noted.


– Vanguard

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