10yrs post-privatization: Nigeria losing ‘big’ customers to power grid unreliability — Stakeholders

Nigeria losing “big” customers to grid unreliability, Stakeholders in Nigeria’s Electricity Supply Industry (NESI) have lamented.

This was even as they disclosed that the acquisition payments received from investors to acquire the DisCos were channelled towards settling PHCN workers and not to improve the network.

Acquisition payments received from investors to acquire the DisCos were channelled towards settling PHCN workers and not to improve the network.

This is contained in a communique issued on Sunday after the maiden edition of the Nigerian Electricity Supply Industry (NESI) Market Participants and Stakeholders Roundtable (NMPSR), held between October and November 2023 in Abuja.

“Big customers are exiting grid power not just because of cost but primarily due to the unreliability of supply,” the communique reads in part.

In the Communique, the sector experts stressed the need for substantial investment in the sector to upgrade infrastructure, improve operational efficiency, and expand access to electricity.

They noted that Government interventions over the years had demonstrated a failed system adding that continued interventions will solve nothing but result in increased fiscal deficit.

“Changing ownership of DisCos will not solve any problems and only the injection of funds tied to specific deliverables will move this sector forward,” the communique read.

While proffering solutions to the country’s power sector woes, the communique said in terms of generation, there was a need for the country to look into converting all its simple cycles to combined cycles as done in Egypt.

“This is more environmentally friendly and is the quickest way to increase generation capacity,” the communique jointly signed by Chairman and Secretary Central Planning Committee, Prof. Stephen Ogaji and Mr Bode Fadipe respectively states.

Particularly, it recommended that Nigeria begin to award gas blocks with some incentives to attract more upstream gas players in the industry

“A full contractual market with capacity payment should be encouraged. This will enable the replacement of ageing capacities as well as support the retention of existing capacities,” the communique added.

In terms of Gas-to-Power challenges, the stakeholders called for increasing and improving pipeline connectivity as this provides a cheaper gas supply option for the thermal plants.

“Domestic escrow for gas-to-power generators can provide assurances to suppliers that can lead to reduced prices if backed by security and longer-term firm contracts,” it said.

For power distribution, the stakeholders called on the Nigerian Electricity Regulatory Commission (NERC) to implement a fair and cost-reflective tariff structure that encourages investment, ensures revenue sufficiency and incentivizes efficient energy consumption.

They also stressed the need for DisCos to introduce energy efficiency programs and initiatives to encourage customers to adopt energy-saving practices and technologies.

It said:” DisCos should expand the deployment of smart meters to improve billing accuracy, and revenue collection, and reduce electricity theft.

“The importance of accurate metering and customer-centric approaches was highlighted to improve billing accuracy, reduce losses, and enhance customer satisfaction.

“The best metering strategy is that which focuses on 100% METERING, starting city to city, like the strategy adopted by the mobile phone companies. Saturate city by city with meters and in no time, the country will have meters everywhere.”

Also, to ensure power transmission and Grid Stability, the recommended expansion and upgrade of the transmission and distribution networks to reduce losses, improve reliability, and ensure efficient power delivery.

” Immediate rollout of ISO as the market competition stage has been attained. ISO should be corporatized and commercialized to make it perform,” the communique read.

The stakeholders further noted that to bring rapid changes in the transmission space, there was a need for interconnection and capacity increase to reduce susceptibility to perturbations.

Consequently, they noted that the country’s power sector requires longer-term and lower-interest capital in domestic currency.

“Pension funds of about N17trn should not just be for government bonds but should be made available for infrastructure development with risk mitigation measures in place,” it said.

In this vein, they called on the Federal Government to provide incentives to encourage local and foreign investment in power infrastructure to improve generation, transmission, and distribution capabilities.

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