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Distribution inefficiencies, lack of funds, others hinder 8000MW target — NDPHC

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Says ADISCOs tariff clamour not justified

By Ediri Ejoh

The Managing Director, Niger Delta Power Holding Company, NDPHC, Mr. Chiedu Ugbo said that the much targeted 8000 megawatts may not be achieved so long as the power sector is plagued by deficiency in distribution infrastructure.

Ugbo stated this at the just concluded 12th national conference of the Nigerian Association for Energy Economics/International Association for Energy Economics, NAEE/IAEE in Abuja.

 

According to him, “At NIPP alone we have up to 4000MW. The country also have an available 8000MW. Also, we have about 13,000MW installed. Mechanically available is 8000 and what is readily available for the market is about 5000mw.

“It is not because the generation capacity is not there. If the GENCOs are called upon, we can provide more. The transmission simulation as the Minister had said, also shows that we can wheel 8500MW.

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“If the transmission company calls me, we will supply the expected. The problem is that Distribution companies are not in position to wheel the load we have to offer. The bulk demand from the distribution companies is very low. This is where the popular phrase comes in ‘Load rejection’. And so, it is because of that impediment at the distribution end, we are unable to optimize the available capacity of 8000MW.”

He noted that the distribution companies “have issues with their infrastructures, collection efficiency, and commercial issues with power theft and all that. But when they took over privatization, these are what they were meant to reduce.

“Also, the DISCOs have a lot of factors militating against their operations. They want tariff increase and do cry about it. But, for now, there is no transparency in their books as we don’t know their collection losses because their customers are not all captured or known. That is why the government is saying the DISCOs should engage in customer enumeration and metering.”

“However, the regulators have mandated the DISCOs to engage in customer’s enumeration and have come up with Meter Asset Provider, MAP, regulation which has opened metering to private investors to invest in and it will improve employment and efficient metering, collection and ensure payment as well as unlocking the power generation.”

Commenting on the challenges, he explained that “About four years down the lane of privatization. You know when new owners come to what is predominately government there are bound to be emergent issues compounded by human nature especially on the Distribution level. The minister, government and regulators have identified the issues and are tackling them headlong.”

He further lamented crisis associated with flow chain of money in the power sector, saying “The biggest issue in the power sector market as at today is money flow. When money is flowing correctly, investment will be made in the sector and will attract investors.” What do I mean by money flow? The GENCOs send out megawatts and what comes back from the distribution is 30 percent. That sector is clearly not money worthy for lenders. The minister is addressing that by introducing the Eligible customer scheme, which enables GENCOs to supply directly to willing buyer that can afford it.”

Also speaking, Chairman of the NAEE, Professor Wumi Iledare, argued that energy production for revenue generation does not grow the economy, not however, that energy production for local consumption does.

He reiterated that paying subsidy on petroleum products was a gorilla to the Nigerian economy, noting that something urgent must be done to eliminate fuel subsidy and prevent a reoccurrence of the Venezuelan situation in the country.

“There is need for a lot of investment to be put in by government in all distribution areas as well as who owns 40 percent of the business. “This is so that they can improve their capacity and serve Nigerians better. How they pay for it, it is a separate mechanism. But government knows that the DISCOs don’t have and can’t access money. And we have to come to make investment.”

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