“Nigeria adopts expensive and inefficient electricity supply model”
Former National Electricity Regulatory Company (NERC) commissioner Mr. Eyo Ekpo said the real problem with the electricity sector is that Nigeria is stuck with a model of delivering electricity that is “extremely expensive and inefficient ”.
Ekpo, who made the statement at the European Chamber of Commerce (EuroCham Nigeria) stakeholder conference on ‘Gaining weight in power sector reforms’, added that Nigerian households and businesses are supply 10 times more electricity through gasoline and diesel generators than the country’s electricity companies supply it through the national grid.
The conference was organized to galvanize policy reforms that will unlock investments in Nigeria’s power sector and provide a stable supply of electricity to Nigeria.
Nigerian homes and businesses generate 40,000 megawatts of electricity daily from diesel and gasoline generators while they only receive around 4,000 megawatts through the national grid.
Ekpo likened it to “burning money” because of the 40 N per kilowatt per hour difference between the cost of self-generated electricity (around 130 N per kilowatt hour) and that of the grid (90 N per kilowatt hour). kilowatt-hour).
He calculated that Nigerians “waste” 12 trillion naira each year, considerably more than the national budget, by self-sustaining electricity from back-up generators rather than being fed from the national grid.
Ekpo criticized the government’s condescending decision to maintain electricity tariffs, saying, “Nigerians want a reliable supply of electricity through the national grid, Nigerians do not want low tariffs for grid supplied electricity.
Ekpo said Nigeria’s power sector problems are rooted in governance challenges rather than technical or financial difficulties.
He said, however, that the privatization of the power sector in 2013 fell short of its targets as Nigerians still rely heavily on back-up generators.
Ekpo also urged the federal government to deepen reforms in the electricity sector by privatizing the country’s transmission network.
Another speaker at the event, Siemens Nigeria Managing Director, Seun Suleiman, noted that one of the “fruits at hand” in the industry is increasing the capacity of the transmission system to deliver more power. Around 7,000 of “fallow capacity” ‘from production companies to distribution companies.
The Minister of Electricity, Mr. Abubakar Aliyu, represented by the Director of Transmission at the Ministry of Electricity, Mr. Emmanuel Nosike, declared that “his priority is to increase the capacity of the transmission system”.
He revealed that Nigeria needs 42,000 megawatts of electricity; but that the country has 13,000 installed capacities of which the national grid has the capacity to transport and supply only about 4,000 megawatts to households and businesses.
Experts present at the event noted that “without the development of a flexible tariff system that allows investors to cover their costs, there will be no new investments to increase production, transmission and distribution capacities. of the national network ”.