Nigeria stands as the giant of Africa, not only because it has the largest economy in the continent but it stands as the host to one of the world’s largest gas reserves. Sadly, despite this status, the country suffers a persistent shortage in gas supply.
The triple threats facing the power sector have been classified as; gas constraints, transmission infrastructure inadequacy, and distribution network constraints. The impacts of these setbacks are felt across the entire value chain. The 54th power dialogue sought to analyse the progression in the electricity sector to understand and suggest the best approaches the sector can adopt for a stable and reliable sector.
According to one of the panelists, Rolake Akinkugbe-Filani, there seems to exist a huge funding gap, debts, and requirements in the power value chain. She classified the threats in the sector as triple F’s – Funding, Fiscals (in terms of tariff structure), and Fixed stock (infrastructure). For Nigeria to achieve its target of 40,000MW generation capacity, it requires around ₦7.6 billion worth of investments. She explained that as a result of the global pandemic, there is now greater competition for scarce funds and cheap credits and Nigeria spends a significant amount of its national physical resources in plugging the shortfalls she faces which is not sustainable (learn more). Rolake added that to reduce gas constraints, the gas should not be solely utilised by the electricity sector.
The representative from Ikeja Electric, Olubunmi Olukoju, expressed that the threats currently experienced in the electricity sector stem from the lack of proper funding. According to her, the constraints experienced in the transmission and distribution units have hindered the generation companies from deploying the full available capacity. She added that the government is partly responsible for the setbacks in the DisCos by altering tariffs. On the angle of hindering the transmission end from evacuating energy across to the DisCos, she explained that in most cases, the energy is sent to areas where it is not needed whereas areas in need of this power are in short supply.
The speaker from the Transmission Company of Nigeria, Engr. Edmund Eje, said that the privatisation of the sector was conceived to foster an adequate power supply to Nigerians. On the contrary, he explained that funding is not the primary factor behind the mishaps of the power sector instead, the problem lies within the inefficient marketing of facilities. He further stated that DisCos on the verge of closing market gaps reduced the amount of energy collected from TCN which has led to the shortage of electricity evacuated to customers. The resulting problem from this act is the excess energy load left on the transmission line which leads to power outages and grid collapse.
Overall, there are a lot of issues to be addressed in the power sector and it is paramount for all government initiatives and plans to converge and have a common synergy so the threats experienced in various sub-sectors would become things of the past.