Power Punch The Senate’s Bill to Improve Power Supply by aisi July 28, 2022 written by aisi The Nigerian Senate recently passed a bill to improve the power supply to electricity consumers in the country. The Electricity Bill 2022 is a follow-up to the report of the Senate Committee on Power. It aims to enable a legal and institutional framework that maximally harnesses the sector’s privatisation. The partial privatisation of the electricity sector in 2013 led to the creation of six generation companies (GenCos), 11 distribution companies (DisCos) and the government-run Transmission Company of Nigeria (TCN). Although the introduction of the private sector intended to improve investment and efficiency in the electricity industry, the sector is plagued with many challenges today. The GenCos, DisCos, and the TCN face their respective bottlenecks that impede electricity supply to customers and the sector’s growth. These challenges include unavailable gas supply, poor network infrastructure and Aggregate Technical, Commercial and Collection (ATC&C) losses. However, one of the most pressing concerns is the inability of the transmission and distribution sub-sectors to wheel and distribute generated electricity to customers. The GenCos revealed in a 2021 fact sheet that despite the average power generation capacity being 6,336.52MW every month, the capacity put on the grid averaged at 4,118.98MW. This totalled 26,976MW of stranded power in 2021. However, the Senate’s Electricity Bill to improve power supply aims to reduce the stranded power in the sector. According to Gabriel Suswam, Chairman Senate Committee on Power, the bill would improve the use of generated power through investments when passed into law. He added that the bill would encourage policies and regulations that enable the transmission network’s expansion and address the industry’s technological limitations. However, the bill to improve power supply would not be the first intervention in the electricity sector. In fact, the industry has received over ₦2 trillion in investments post-privatisation. One of these investments is the most recent Central Bank of Nigeria (CBN) intervention of $250 million (₦103 billion) to improve the rehabilitation of transmission and distribution infrastructure. In addition, there is also the CBN-funded Nigerian Electricity Market Stabilisation Facility (NEMSF) of ₦213 billion, among other interventions. The apparent failures of past intervention programmes in Nigeria’s electricity sector have led to stakeholders’ opinions. As a result, some stakeholders have suggested that the privatisation process be reversed as the challenges continue to affect electricity customers in terms of poor electricity supply, tariff hikes and the increased cost of running alternate power generation sources. According to Comrade Hassan Sunmonu, the Pioneer President of the Nigeria Labour Congress (NLC), “Even with the privatisation, the government is still spending public funds on the sector. If not, the whole country would have been in total darkness by now. I’m 100 per cent in support of the government reviewing the privatised power sector.” So, if these past interventions have failed to increase the sector’s efficiency, what assurances are there that the Electricity Bill to improve power supply would be beneficial? What frameworks would ensure the monitoring of investments to develop the electricity network infrastructure? And how can electricity customers in the country be convinced that this isn’t another inconsequential move to improve the Nigeria Electricity Supply Industry (NESI)? July 28, 2022 0 comment 0 FacebookTwitterPinterestEmail
Power Punch The Connection Between Generated Power and Electricity Consumers by aisi July 5, 2022 written by aisi The worsening state of the power sector in Nigeria has led to electricity customers in the country enduring five grid collapses this year. The country’s peak generation capacity has been hovering around 3,000 MW, drastically inadequate to meet the demand. However, if the generation capacity improves, what assurances are there that the Transmission Company of Nigeria (TCN) can be the connection between generated power and electricity consumers. Recently, the Generation Companies (GenCos) pushed against the activation of a Power Purchase Agreement (PPA) by the Nigeria Electricity Regulatory Commission (NERC). The PPA required the minimum generation capacity to be 5,000 MW. The GenCos gave reasons why this would not be possible, including gas supply challenges and existing debt owed to them. The GenCos stated that for a minimum of 5,000 MW generation capacity to be achievable, gas supply must first be guaranteed. Also, the generation companies mentioned payment shortfalls to them as another factor inhibiting the success of the PPA. For example, in 2019, data from NERC showed that the market shortfall was ₦496.65 billion. While GenCos invoiced ₦675 billion to the Nigeria Bulk Electricity Trading Plc (NBET), only ₦174.3 billion was paid. However, if the GenCos do begin to produce 5,000 MW, what challenges would hinder the connection between generated power and electricity consumers? The TCN’s responsibilities include developing a transmission grid to evacuate all generated power among its many activities. However, even with the current generation capacity, the TCN responsible for channelling electricity to Distribution Companies (DisCos) faces many challenges. These challenges include inadequate infrastructure, the vandalisation of available infrastructure, and the lack of operation management and data sharing systems. The lack of adequate infrastructure and the vandalisation of existing infrastructure is the most pressing of the TCN’s problems. A major factor in unelectrified areas in the country is the lack of infrastructure such as transmission lines. And often, when transmission infrastructure is vandalised, the TCN cannot apprehend the criminals due to a lack of surveillance technology. This vandalism disrupts the electricity supply to consumers. The lack of investment in transmission infrastructure interrupts the connection between generated power and electricity consumers. In April, the Federal Executive Council (FEC) approved ₦1.4 billion to support the development and purchase of TCN infrastructure and equipment to improve power supply to customers. According to the Minister of Power, the funding will help the TCN build KV lines in substations and provide handling equipment and operational vehicles. It is important that while efforts are being made to increase the country’s generation capacity, investments should be put towards improving the transmission link. Proper investment in the TCN, among other benefits, would prevent electricity wastage and strengthen the connection chain between power generated and electricity consumers. July 5, 2022 1 comment 0 FacebookTwitterPinterestEmail
