From Isaac Anumihe, Abuja
Minister of Power, Adebayo Adelabu, on Wednesday, disclosed that his sector inherited over $1.3 billion debts owed the generation companies by successive administrations and a fresh N1.3 trillion currently owed them by the current dispensation.
The $1.3 billion is the accrued subsidies the GenCos ought to receive from the federal government.
Speaking to newsmen in Abuja yesterday regarding the issues in the power sector, Adelabu stated that if these debts are not settled, uninterrupted power supply may not be achieved in the near future.
According to him, in January, the Federal Government currently owes the GenCos over N450 billion in subsidy and it is expected to pay over N3 trillion for the year.
To this effect, he pushed for a national discourse to consider if subsidy should be regarded as a commercial product or a social service
“Should it be considered as a commercial product or social service, there must be an agreement across divides on how we define electricity. If we don’t resolve subsidy, whatever we do is like walking in the dark.
“Depending on the outcome of the above, either implementation of a cost reflective tariff or a cashed backed federal government guaranteed subsidy funding regime to inject liquidity into the sector should be adopted” he said
Also, the minister stated that for the power sector to run seamlessly, there should be increased investments across the value chain for infrastructural improvements, capacity expansion and transmission automation.
“Equally, there should be diversification of power generation to absorb renewables and facilitate the nation’s journey to energy transition target.
“Encourage distributed power strategy in conjunction with sub- national government focussing on embedded power model to reduce pressure on the national grid, and to ensure alternative electricity supply to the distribution companies (DisCos)
Other problems in the industry, he said, include, inadequate power evacuation capacity at generation companies (GenCos) locations, coupled with unstable and fragile transmission lines, devoid of automated frequency controls, lacking in fail-over or back-up capacity with frequent human disturbances through vandalisation and theft.
“Aging weak distribution infrastructure (lines and transformer) coupled with huge meter gap causing unbearably large technical and collection losses” he noted.
These, Adelabu said, are issues that look so simple on the surface and should ordinarily require little efforts to fix over time. However, it’s been quite difficult to get these problems fixed over the years due to the complications wrapping the entire value chain end to end.
ENDS