Reps urge Ministry of Power to provide electricity substation in Osun

By Ediri Ejoh

Average Nigeria’s unutilized power generation has increased year-on-year, YoY, to 3,008.18 Megawatts, MW in 2021, from 1,030.80 MW in 2013, indicating an increase of 291 per cent in the past eight years, due mainly to lack of infrastructure.

This showed that adequate investment has not been made over the years to transmit and distribute electricity to consumers, including households and companies after eight years of privatization.

The latest data obtained from Electricity Generation Companies, GenCos, showed that unutilized power, which stood at 2,734.94 MW in 2014, had dropped to 2,010.24MW in 2015, before rising consistently to 22,827.98MW and 3,311.92MW in 2016 and 2017 respectively.

It also rose to 3,698.51MW in 2018, dropping slightly to 3,599MW in 2019, before hovering at 3,742.43MW and 2,117.86MW in 2020 and 2021 respectively.

Impact

This has denied the nation of substantial power which could have been utilized to boost economic and other activities sector-wide.

It has also constrained GenCos from generating revenue from their unutilized power over the years, especially as data noted that although available generation capacity exceeded 5,000mw, it has not resulted in 100 per cent invoice settlement.

According to the report, “power remains a national problem, as over 40 per cent of the GENCOs available capacity is not being enjoyed by consumers due to constraints. However, due to system constraints, the generated power is rejected or forced to be reduced to match the infrastructure that transmits and distributes this power to the customer.

“Records show that monthly ‘unutilized capacity’ was averaging about 50 per cent up until 2020 before it fell to about 30 per cent in 2020 when GENCOs available capacities was forced to drop because of systemic challenges.”

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It noted that the “stranded capacity has consistently grown since 2013 till date, thereby making GENCOs increased capacity not translating to a corresponding increase in power supply to consumers.

“It is international industry best practice in critically underserved countries, that available generation capability should be equal to average generation (energy utilized).

“In Nigeria, available generation has met increased stranded capacity as the generation PPA with NBET provides for capacity payment which is not being made.

“Citing World Bank 2021, as a result of these power challenges, about 85 million people, representing 43 per cent of Nigeria’s population are reportedly without access to grid electricity, making Nigeria the country with the largest energy access deficit in the world.

“This has become a big challenge and an inhibitor to the Nigeria Electricity Supply Industry, NESI, weakening the efforts of the generation companies in recovering unavailable capacities and exploring expansion of capacity, considering the massive fixed charges incurred to keep such units available.”

Experts

Commenting on the development, Group Managing Director, Sahara Power Group, and Chairman, Ikeja Electric Plc, Mr Kola Adesina, said: “The challenges currently hampering the power sector is the absence of a commercially viable plan.

“Those of us that have invested haven’t made money. So why would anyone want to invest? If you want to invest, you want to first talk to the existing investors and find out whether or not they are making money.

“We are not making money. But if we arrest the issues affecting investment, there would be an improvement because money loves to go to where money is.

“So if the sector is investment-friendly, the price of the commodity is right, policies are clear and consistent, regulations are fair and known to all, then so much money will be available.

“Previously, until we created the Service-Based Tariff, it was taken by the system and adopted as a way of life. Where is the Service-Based Tariff when people are enjoying 20-22 hours of power? In Nigeria, that would be alien. But today, it is happening. We now have to sequence the number of hours people enjoy electricity and make them pay accordingly. So, things are getting better than they were in 2013.

“But are they as good as they should be? No. So we are not where we wanted to be, but we are better than we were before.

“We were doing 2,200MW and 2,500MW at the time we took over. Now, we have gone to over 5,000MW. But is that the way we should have grown? No, that is slow.”

Furthermore, in an interview with Vanguard, President, Nigeria Consumer Protection Network, Kunle Kola Olubiyo called for massive investment in the transmission and distribution in order to transmit and distribute more electricity to consumers.

He said that several activities are currently scuttled in the private and public sectors because of low and unstable power supply, adding that many locally produced products and services are not competitive in the global market, due mainly to the high cost of production.

Vanguard News Nigeria

Disclaimer

Comments expressed here do not reflect the opinions of vanguard newspapers or any employee thereof.