Out of the estimated electricity demand of 25,000 megawatts (mw) in Nigeria, only 3,500 mw can be supplied for now, creating quantum deficit of 21,500mw.
This is even as key players in the power sector at the supply end of the chain, through the Distribution Companies ( DisCos), incurred losses of over a trillion Naira between 2015 and 2018.
Gloomy pictures on operations of the sector across the entire chain of generation, transmission and distribution within the last six years were painted at the just ended capacity building workshop held for members of both the Senate and House of Representatives Committee on Power.
Specifically on Friday at the close of the workshop, one of the key players in the sector, Mr Femi Omisanjo, of the Wayne Energy Associate, said the sector was bedeviled with challenges requiring more investments and liquidity as way out.
He said, “Presently, total installed generation capacity is 12,522 MW, but average operational generation capacity is just 5,000MW of which 7.4% is lost in transmission, and up to 27.7% load cannot be taken at distribution level.
“This leaves Nigeria with just about 3,500MW. Yet, Nigeria’s electricity demand is estimated at 25,000MW.
“Total cash shortfall in the sector between 2015 and 2018 is estimated at more than N1 trillion. Between 2015 and 2018, the market shortfall amount owed by DisCos to the rest of the market) is estimated at N601 billion, of which majority is caused by the tariff shortfall deficitsarising from tariffs lower than cost of service delivery.”
According to him, “In addressing the challenges, government needs to (i) help drive a policy that will encourage more investments in the industry, (ii) Promote the Interconnected mini-grids to improve power reliability in undeserved areas, (iii) Promote franchising to accelerating metering and end estimated billing, (iv) Promote commercial dispatching of power to increase energy delivered to customers, ( v) reduce stranded energy and stop rejection of energy wheeled.”
He also stated that Liquidity challenges still persist in the market because the investors who bought the PHCN successive companies do not have the requisite financial muscle to revolutionize the industry.
“This implies that more investment is needed in the industry but unfortunately government does not have unlimited resources to continueto support the industry, the very reason , further opening up the sector for more investors is very necessary,” he said.
In his own submission , another key player in the sector, Godswill Ugochukwu of the Nextier Power, said changes in macroeconomic parameters after the privatisation of the Sector in 2013 among others , contributed to the challenges being faced .
“The power sector was handed over to orivate-sector operators in November 2013 without liabilities. However, since that date the NEM has been in deficit with Revenue Shortfalls the causes which are ÷ Absence of a cost-reflective tariff;Delivered Energy Deficit; Changes in macroeconomic parameters; Distribution Losses – Aggregate Technical, Commercial, & Collection, Non-payment of energy from Government Ministries , Departments and Agencies ( MDAs,) etc ”
He however assured the lawmakers that his firm and others operating within the sector, would collaborate more with government in giving Nigerians constant electricity supply in no distant time .
“We will continue to engage with government and we are confident we will move the tide quicker,” he said .
In his remarks, the Chairman of the joint Committee, Senator Gabriel Suswam (PDP Benue North East) said the essence of the workshop was to make members of the committee well informed on all issues relating to the sector for the required informed legislative Interventions.
His words: “The power sector is a technical sector and as legislators most of our background is not necessarily in the power sector , the reason for this work shop .
“You know power has become a big problem to Nigerians. So if as legislators who are in these committees do not ourselves understand the basis in the power sector, then we will not be in a position to properly articulate the issues that have to do with power sector.
“From the submissions made so far, the bulk of the problem lies with the transmission component of the sector which can only take 4000mw of 5,000mw generated and the Distribution end utilizing only 3,500mw.
“Generally , there are fundamental problems in the power sector and we are determined to join forces with the president or the executive arm of government to at least provide electricity for Nigerians.
“We intend to achieve 23,000 as the president has said. By the year 2022, we should be able to move beyond 10000. If we have 10,000 megawatts of electricity on our national grid, most of the unemployment problems would be solved because people from different sectors of the economy will be able to have industries.
“These industries will absorb our youths that are on the streets. Of course it will also settle security problems because once you have most of these graduates engaged, they will not be idle, so they will not be engaged in acts that are inimical to the development of this country.”
