By Clara Nwachukwu
One of the ways of inreasing generation caapacity, thereby, improving on electricity supply and delivery in the country, is through embedded power production, the Nigerian Electricity Regulatory Commission, NERC, has said.

Through embedded power, the commission argued that capacity can then be aggregted and availability improved, noting that at the rate the power situation is going, there may not be enough electricity until 2015.

The NERC Chairman, Dr. Sam Amadi, who spoke with Vanguard on the sidelines of  recent international energy summit, said that through embedded power states and local governments can invest in smaller generation capacities like 5 or 10 megawatts from different sources.

He further explained, “The model is not based on big capacity, but  focuses on strategic long term solutions. It is embedded because it is not open to all, but captive in a way. But unlike captive power, which goes through the transmissions, this power is bought directly by the distribution companies, DISCOs.

“The embedded producer sells to the DISCOs like any other generator, and the DISCOs pay for supply. But the end user tariff will remain the same, so the DISCos will have power at cheaper cost because they have eliminted transmission costs.”

Amadi also noted that it is easier to fund embedded power, as funding can be sourced through the  Central Bank of Nigeria, CBN N300billion Intervention Fund, of which about N200billion is still very much availble.

He argued that notwithstanding the faact that there is a $200billion World Bank partial guarntee facility, power projects under this fund, will take a while before they can be relaised.

“It an take up to three to four years before the World Bank fcility aan be feasible, because so far, the facility remains frozen ecause feasibility depends on the bankability of the project and this takes a long process for due diligence, so there is an inevitable time lag,” he added.

Weak governance

He insisted tht part of the short term challenges being witnessed in the power sector is traceable to the fact that some of the power projects under the National Integrated Power Project, NIPP, have not been delivered.

He attributed this to “a multuiplication of weak governnce and inefficient regulatory control,” adding that the NERC was now bringing these projects under its regulatory control.

Amadi further noted that gas supply issues are also contributing to the poor power situation, saying, “Gas supply is totally inefficient and to have gas to power regulted by the Ministry of Petroleum Resources ha serious regulatory control issues,” adding that “pricing gas without the knowledge of the electricity market is not responsive and vice versa, and so there is no integration.”

He noted that globally, gas to power regulation is domiciled with the Ministry of Power or Energy. “In the United Kingdom, the regulation of electricity is same as gas. Even in Ghana, which is our West frican neighbour, it is the same thing – the idea of gas for the domestic market if for electricity.”