The federal government is discussing with the World Bank on how to solve the challenges facing the electricity sector in Nigeria. Babatunde Fashola, minister of power, works and housing, said discussions with the ministry of finance and the World Bank focus on improving the electricity market’s governance practices, deployment of meters to consumers, and reduction of operational losses.
At a recent power dialogue organised by Nextier Advisory in Abuja, Fashola said that a policy that would help establish a stronger and better institutional framework needed to tackle the challenges of the sector was also being discussed with the bank and ministry of finance.
He, however, did not disclose the entire content of the new policy, noting it would improve metering of consumers by the electricity distribution companies, Discos, sanctions for energy theft, and adherence to contractual obligations by operators in the sector. He explained that this would also help the sector overcome its current financial challenges and strengthen the financial base of the Nigerian Bulk Electricity Trading Plc, NBET.
The new policy has been presented to the federal executive Council, FEC, for consideration and approval. When implemented, market issues such as payments for services such as gas supplies will be tackled to improve the operations of electricity generation companies, Gencos.
“Clearly, these policies constitute the way forward, and ensure that everybody in the system gets paid. If we have that, at least, we can be sure that those who are supplying gas will not be shutting down because their creditors are pulling them. Then we go to the other side that are angry to see what we can do because gas problem is exacerbated on both sides. So, governance issues, we are addressing them because it is part of our discussion with the World Bank, and we can get this done, we can fix this sector. These are problems that can be solved because they are human issues and man-made mistakes.”
The power sector in the country is currently going through a tough time with chronic financial illiquidity, drop in power generation and supply, and other operational challenges threatening to overwhelm it. The electricity supply across the country has continued to drop with the Transmission Company of Nigeria, TCN, saying that the nation’s power generation capacity dropped from 3,959 megawatts on January 4, to 2,662 megawatts on January 22.
The Nigerian Electricity System Operator, SO, website, a sub-agency of TCN, disclosed the figure in its daily forecast on power generation data on Sunday, January 22, attributed the drop to low water levels at the hydropower stations and the dearth of gas to the power generating companies.
TCN said the total output of 2,662.20 megawatts from all the generation companies on Sunday had been transferred to the 11 distribution companies across the country. According to the Nigerian Electricity Supply Industry, NESI, operational report for January 4, the power sector hit a peak generation of 4,959 megawatts but dropped to 2,662.20 megawatts on January 22.
The NESI said the sector recorded highest system frequency of 51.32Hz and lowest system frequency of 48.52 Hz, while the highest and the lowest voltage recorded on Sunday were 372KV and 300KV, respectively.
Fashola, had on Friday, January 20, said that the sabotage of power assets by militants prevented Nigeria from generating 7,000 MW of electricity. “Today, at its most frugal, the nation’s power grid would support 6,500MW; pushed to its limit, it would carry 7,200MW. So it is not true when you hear that the grid capacity is not more than 5,000MW. It is growing every day and more projects are coming up. We have completed some and more are still coming up. So that is where we are.”
He said while power was out due to attacks in one axis, the expansion of either the grid or gas supply was kept alive on another axis and hydropower was also being expanded.