The power sector is, arguably, one of the many negative narratives in Nigeria’s 57-year journey as a sovereign nation, but federal government’s push, in the last 365 days, with initiatives geared towards tackling the hiccups that have challenged the power sector in the last two to three decades has started showing light at the end of the tunnel.
The premise for this assumption is clear. Babatunde Fashola, Minister of Power, Works and Housing, has assured that plans were on top gear to ensure the implementation of policies that would improve gas supply and liquidity as well as the completion of several power projects by the Federal Government in 2017.
Fashola observed that the Federal Government has put together a policy framework that would help establish stronger and better institutional framework needed to tackle the challenges in the Power Sector.
According to him, such policies would help realise a deepening of metering, sanctions for energy theft and better contract performance from Operators in the Power Sector as well as help achieve the financial strengthening of the Nigerian Bulk Energy Trading Plc (NBET).
Government also assures that when the policies are implemented, they would certainly take the nation to more gas and assure payment to gas suppliers and generation companies to enhance smooth operation in the sector, adding that they constitute the way forward.
Challenges however remain. There have been decreased power supply and outages across the country, which the minister says is as a result of the sabotage of gas pipelines and the debt owed gas companies by the DisCos, which necessitated the companies to withhold supply of gas.
The nation lost about 3,000MW from the past incident, resulting to blackout across the country because the Grid becomes very vulnerable when there is not enough energy up to its carrying capacity, but contrary to the notion in some quarters that the Grid was static, it was actually growing every day.
The power sector is a value chain where all players must contribute their quota to ensure there is power for all but this is not the case. The energy sector is currently plagued with major inadequacies. The transmission and distribution infrastructure are in a deplorable state.
Over three years after privatisation, the 11 distribution companies are still unable to distribute and account properly for power purchased and distributed, while the generating companies are bearing the entire burden which comes with the liquidity squeeze in the market.
The debt being owed the power generating companies between November 2013 and September 2017 stands at N1trillion. In addition, there is need for investment in the national grid. According to recent update from the Transmission Company of Nigeria (TCN), about 16,729 megawatts of electricity was wasted in seven days, from September 18 to 24.The Regulators also need to be active and ensure contract defaulters are penalised.
Despite the challenges the power sector has been grappling with over the years, there were however some laudable initiatives put forth by the federal government to resolve the crisis in the sector.
In the early part of 2017, the country recorded a 5,074MegaWatts of power generation which, till date, is an all-time high achievement.
During the year under review, government through the Federal Executive Council came up with N701 billion for Power Assurance Guarantee Council for the Nigerian Bulk Electricity Trading Plc (NBET)
Government promised to explore investment opportunities for revolving funds for solar and other renewable sources of energy to break the deadlock of electricity market structures through competition and ensure that renewable energy becomes an engine of growth for Nigeria’s economy.
In addition, there were also plans to partner with the private sector, to create the framework for real-world business cases by developing standardised (and certified) technology packages, standardised contracts and a toolkit for energy cooperatives with technical, institutional, financing and legal elements.
The government equally resuscitated the existing contracts for 2000 constituency electricity projects under the Rural Electrification Agency (REA) would soon be completed, and the government would be looking at expanding the generation, transmission and distribution aspects within the electricity value chain by encouraging more technical partners and other investors to come into the power sector and explore other energy resources in more secured environments across the country.
Industry watchers are of the opinion that from all indications the Federal Government has reiterated its commitment to ensure there is improvement in the supply of power for commercial and domestic use.
Joy Ogaji, Executive Secretary, Association of Power Generation Companies (APGC) in a chat with BusinessDay lauded Babatunde Raji Fashola, Minister of Power, Works and Housing for the Declaration of Eligible Customer, pursuant to Section 27 of the Electricity Power Sector Reform Act 2015.
Ogaji observe that this is a step in the right direction at this point in the NESI as it will go a long way to liberalise the market and bring competition. “This new policy declaration will promote national economic development through supplying electricity to the productive sector of the economy”, she said.
Pointing the way forward for the power, Babatunde Raji Fashola assured that the federal government through the ministry of power has mapped out power projects aimed at increasing power supply.
Projects such as Kudenda Transmission Project in Kaduna; Gurara hydro power; Katsina Wind Mill; Kaduna’s 215MW and few others when fully operational would push up power supply in the country.
Ayodele Oni, an energy expert and partner Bloomfield Law Practice in his assessment of the power sector so far commended the Minister of power who he said appears hands-on saying that a lot is being done.
According to him, “The Regulators NERC appear to be putting in renewed efforts and with more clarity expected in connection with the eligible customer policy, more people are set to pay more and have more stable and better quality electricity.
Oni is of the opinion that to achieve sustainable improvement, the electric power sector recovery plan, must be well implemented and the politicians should focus on results. Where the foregoing, is done, we should see sustainable incremental electric power supply which becomes stable and then ultimately, uninterrupted electric power supply across the country.
He said the Development Finance Institutions appear still interested in working with the Nigerian government to achieve success and the private sector (particularly Nigerian, Asians and Europeans) which interest was waning now appears to have renewed its attention”.
KELECHI EWUZIE
Join BusinessDay whatsapp Channel, to stay up to date
Open In Whatsapp
