- The stakeholders debunked the idea of changing DisCos’ ownership, advocating for a cost-reflective tariff.
- The critical issues identified by the participants include insufficient power generation capacity and poor power use.
Stakeholders in the power sector have said that changing the ownership of electricity Distribution Companies (Discos) will not resolve Nigeria’s power supply problems. However, they advocated for the implementation of a cost-reflective tariff regime. The power sector experts stated this at the maiden edition of the Nigerian Electricity Supply Industry (NESI) Market Participants and Stakeholders Roundtable in Abuja. In a communiqué signed by the Chairman of the Central Planning Committee, Professor Stephen Ogaji, and the conference Secretary, Mr Bode Fadipe, the attendees identified insufficient power generation capacity, poor utilisation of power generated, and deserted generation capacity as critical issues in the sector.
The communiqué stated that current generation constraints included gas volume and pressure, transmission, collection/financing, and risk mismatch or misalignment. Last week, the Minister of Power, Mr Adebayo Adelabu, advocated the sale of gas-to-power in naira to eliminate the volatility occasioned by the transactions in dollars. According to the participants, pricing gas in naira will reduce incentives to continue domestic gas production. They said it would further increase gas prices until there is a recovery of parity issues, adding that producers will not accept or absorb the currency exchange risk. They stated that the lack of effective contracts and debt from power off-takers will be significant issues.
On the distribution side, the participants identified the significant Aggregate Technical, Commercial, and Collection (ATC&C) losses, impacting the sector’s overall efficiency and financial viability as another problem. The communique said, “Changing ownership of Discos will not solve any problems, and only the injection of funds tied to specific deliverables will move this sector forward. There has never been liquidity in the NESI since funding never came into the market, except for interventions by the Central Bank of Nigeria (CBN).
“Acquisition payments received from investors to acquire the Discos were channelled towards settling Power Holding Company of Nigeria (PHCN) workers and not to improve the network. Big customers are exiting grid power not just because of cost but primarily due to the unreliability of supply.” The communique added that the Nigerian power sector needed to transition to cleaner and more sustainable energy sources, reducing reliance on fossil fuels and minimising the environmental impact of power generation.