August 8, 2022

Electricity generation rises 7.6% to 4,089mw, as inadequate facilities hinder distribution

Full List: NERC unveils areas electricity tariff hike will affect in Lagos


By Udeme Akpan, Energy Editor

ELECTRICITY generation, weekend, rose by 7.6 per cent to 4,089 megawatts, MW, from 3,800MW, according to data obtained from Nigeria Electricity System Operator, an autonomous unit under the Transmission Company of Nigeria, TCN.

Checks by Vanguard showed that the improvement was due to a combination of factors, including additional inputs from hydro stations because of heavy rainfall.

But this did not translate to increased power supply to consumers, including households and companies nationwide, as the Electricity Distribution Companies, DisCos, have limited infrastructure, such as transformers, prepaid meters and distribution lines, to deliver adequate electricity to consumers.

Consequently, the checks showed that many consumers still live in darkness or generate their independent power at higher cost, due to the higher prices of petrol and diesel, currently priced at N170 and N800 per litre respectively.

However, Nigeria’s relatively low generation, transmission and distribution of electricity was attributed to low investment in the sector.

Commenting on the development, the President, Nigeria Consumer Protection Network, Kunle Kola Olubiyo, attributed the nation’s relatively low generation, transmission and distribution of electricity to low investment in the sector

He said: “Investors in this very important sector need to inject huge funds and other resources into massive generation, transmission and distribution of electricity. The present level 4, 089MW is grossly inadequate. The United Nations has already noted that 1,000MW should be dedicated to one million persons.”

Similarly, the National President, Oil and Gas Service Providers Association of Nigeria, OGSPAN, Maxi Colman Obasi, said: “The power sector is a capital-intensive in nature.

Operators should first inject huge funds into building their capacity to providing sustainable services, before thinking about profit.”

However, the Association of Nigerian Electricity Distributors, ANED, claimed that the Federal Government owed the 11 DisCos N100 billion in unpaid subsidies on electricity, thus hindering their capacity to increase investments in the sector.

Executive Director, Research and Advocacy, ANED, Barrister Sunday Oduntan, had said: “We believe that it is reasonable to conclude that the resultant outcome has been an expropriation or backdoor renationalization of the DisCos by the Federal Government of Nigeria, FGN.

“Such renationalization or expropriation must be viewed through a historical context as necessary for a proper understanding of the performance challenges that the DisCos have been faced with since privatization.

“Fundamentally, the basis of privatization was flawed from the beginning, due to conditions that were not met by the FGN, while expecting the DisCos to meet their performance obligations. Not only were the investors short-changed because of insu?cient and unreliable data that was provided by Bureau of Public Enterprises, BPE to them during the privatization process, but the government also committed to and failed to deliver on the debt-free financial books; Payment of Ministries, Department and others.

 Agencies electricity debts; N100 billion subsidy; Implementation of a cost reflective electricity tari? (this singular unfulfilled condition has led to accrued significant debt and liabilities on the DisCos’ financial books, as they continued to sell electricity below the cost price); and private management of the Transmission Company of Nigeria, currently, a government-owned and operated entity (a major requirement for attracting the private investment that is critical to addressing the transmission bottleneck that is currently belittling the Nigerian Electricity Supply Industry value chain.

“While the DisCos are not exonerated from responsibility for performance failures, it would be unrealistic to reach related conclusions without taking into consideration the factors that have been listed previously, as well as the FGN’s contributions to these challenges.

“Furthermore, there is an established process by which a change of a corporate entity’s Board of Directors and management occurs. As such, it is with much surprise that the DisCo investors awoke to the July 5th, 2022, renationalisation or expropriation of the five DisCos. More so, given that due process was not followed and that the FGN, as a 40 percent minority shareholder, is represented by the Director General of BPE on the Board of each of the DisCos and is party to all decisions concerning the operations of the DisCos.”