•Obsolete infrastructure, others militating against power supply –Adelabu
From Ndubuisi Orji, Abuja
Vice President Kashim Shettima has said an estimated 45 percent of Nigerians do not have access to any form of electricity while less than 20 percent have access to 12 hours of energy per day.
He spoke at a Power Sector Stakeholders Interaction Dialogue/ Workshop organised by the House of Representatives Committee on Power, yesterday.
The vice president, who was represented by Sadiq Wanka, Special Adviser to the President on Power, Office of the Vice President, said households and industry were dependent on self-generation that is both more expensive and more polluting.
He explained that the Electricity Act 2023 passed by the National Assembly and signed into law by President Bola Tinubu is intended to overhaul the structure of the country’s electricity supply industry.
“The wholesale structural shift that the Electricity Act 2023 and the associated constitutional amendment usher in means we need to double down on ensuring an orderly transition to the new national electricity market framework.
“In this regard, I must congratulate the National Assembly for its steadfastness in leading the conversation on this orderly transition and for demonstrating a willingness to review the recently passed Electricity Act as needed…
“Similarly, the Nigerian Electricity Regulatory Commission has continued to step up to the plate in translating the Electricity Act into enabling regulations that facilitate the transition to a new market structure. State governments have also demonstrated a unique sense of urgency and duty in playing their part towards domesticating the new Electricity Act and improving the energy situation for their populace.”
Shettima added that the level of engagement by stakeholders has to be strong as there were many unresolved issues. “In addition to the urgent need to adequately define what the new national electricity framework is, the introduction of new state electricity markets raises pertinent questions.
“Similarly, there is a need for us to maintain a level of flexibility in the transition process. For example, transitioning to state regulatory control requires distribution companies to set up state subsidiaries. But this is not a straightforward process.
“There are complex issues of asset delineation, equity negotiations with other investors in DISCOs and even infrastructure investments required to truly delineate the distribution network of one state from the other, “ he stated.
In his remarks, the Minister of Power, Chef Adebayo Adelabu, identified obsolete infrastructure, electricity theft and vandalism as some of the factors militating against power supply in the country.
The minister, who noted that most of the power infrastructure dated back to the 1960s, expressed concern that there was no back up for the national grid in the event of a collapse.
“In my visit to one of those stations, I noticed that the transformer was installed in the 1960s, carrying the logo of ECN about 50 years ago. We lack adequate technology. Then the big elephants – the distribution companies. We have seen the privatisation. It wasn’t bad because it had laudable objectives but execution is fraught with a lot of inefficiencies. This has led to structural issues which we are also battling with.”
He said there was a proposal for the establishment of three gigawatts of solar energy sources across the 25 states in the north and south west parts of the country.
“We have investment proposals for the establishment of three gigawatts, which is 300 megawatts of solar energy source across the 25 states in the North and the South West. This is novel. And we believe it will go a long way to solve our power problem,” he stated.
The Speaker of the House of Representatives, Tajudeen Abbas, while declaring the event open, stated that the transition to a multi-tier electricity system, which resulted in recent hike in tariff, ought to have been preceded by an extensive consultation.
He noted that having a consultation after the transition seems an afterthought and runs counter to the Electricity Act 2024 which mandates consultation with all relevant stakeholders in determining just and fair tariffs.
He agreed that the power sector is plagued by challenges that have stifled its growth and efficiency.
Abbas listed them to include inadequate generation capacity, dilapidated infrastructure, frequent disruptions in power supply, and financial inefficiencies that had eroded the sector’s viability.
He also said inadequate metering and the consequent revenue loss had perpetuated a cycle of debt and underinvestment that has undermined the sector’s potential.
He said there was a need to foster collaborative efforts that would leverage both public and private sector expertise and resources.
“This dialogue embodies such collaboration and is crucial in charting a forward path. The shift towards a multi-tier electricity market represents a strategic pivot in our approach to power sector reform.”
He said the model envisaged a structured market segmentation that allowed for differential pricing and service levels tailored to diverse consumer needs and capacities.
“It promises enhanced efficiency through competitive practices, encourages investment by delineating clear market segments, and improves reliability and service delivery across the board.
“There is the likelihood of improved reliability and quality of service, especially for high-demand users willing to pay more, thus indirectly benefiting the standard service tiers through reduced load.”
He said in spite of the much-touted benefits, the transition to a multi-tier market was challenging, adding that it included regulatory complexities, the need for substantial capital investment Others included the risk of market segmentation leading to disparities in service quality, and resistance from different stakeholder groups due to changes in tariff structures.
“Our commitment to transforming the Nigerian power sector into a model of efficiency and sustainability is unwavering,” he said.
Victor Nwokolo, chairman, House Committee on Power, said the forum was aimed at providing a dynamic platform for stakeholders to evaluate the progress made thus far in the Nigerian Electricity Supply Industry (NESI)’s development.
“We will delve into the successes, challenges, and opportunities encountered along this journey, seeking to identify key areas for improvement and innovation.”
He said continuous engagement with all stakeholders was critical to ensuring that the reforms met the diverse needs of the population and maintained public trust.
He said that the workshop would serve as a platform for stakeholders to explore innovative solutions to the persistent challenges plaguing the power sector.