– Say move won’t solve Nigeria’s power problem
Gift Ekwueme
Lagos – Stakeholders in the nation’s electricity sector, at a roundtable in the Federal Capital Territory, Abuja, informed the Federal Government that changing the ownership of the electricity distribution companies or Discos will not resolve Nigeria’s power supply problems.
The Minister of Power, Mr Adebayo Adelabu, spoke, last week, on the possibility of handing the Discos to new entities and supported the sale of gas-to-power in naira to eliminate the volatility occasioned by the transactions being done in dollars.
But stakeholders at the maiden edition of the Nigerian Electricity Supply Industry, NESI, Market Participants and Stakeholders roundtable, attended by over 300 professionals, said implementing a cost-reflective tariff regime was necessary.
The Chairman, Central Planning Committee of the roundtable, Professor Stephen Ogaji, and the Secretary, Mr Bode Fadipe, in a communique after the event, identified insufficient power generation capacity, poor utilisation of power generated, and stranded generation capacity as key issues in the sector.
The communique stated that current generation constraints included gas volume and pressure, transmission, collection/financing, and risk mismatch or misalignment.
According to the attendees, pricing gas in naira will diminish incentive to continue domestic gas production. It would further increase gas prices until any parity issues are recovered, they said, adding that producers will not accept or absorb the currency exchange risk.
In the statement, it was stressed that lack of effective contracts and debt arising from power off-takers will be a major issue.
It identified the significant Aggregate Technical, Commercial, and Collection (ATC&C) losses, impacting the overall efficiency and financial viability of the sector as another problem on the distribution side.
The participants argued that assets were sold in foreign exchange which were not returned into the business, but used to settle staff liabilities, while the absence of widespread metering contributed to issues, such as electricity theft, inaccurate billing, and revenue losses for power distribution companies.
They emphasised: “In Nigeria, there are approximately seven million unmetered customers and three million customers with outdated meters.
“Currently, there is no transparency/accountability of intervention monies pumped into privatised distribution companies or even for meter procurement.”
As for power transmission and grid stability, participants said the network code, despite all that it promised, still had issues with implementation that needed to be closed out as soon as possible.
They pointed out lack of effective metering at entry and exit points as well as the absence of SCADA and unregulated entry and exit conditions for all suppliers as key issues.
Participants said non-investment in the super grid to allow bulk power movement and export, non-availability of minimal 10 per cent reserve margins as required by the grid code, lack of effective spinning reserve implementation regime, as well as electric power sector financing, liquidity, and recapitalisation, remained major challenges.
