Power supply worsens despite N5tn investments – Report

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DESPITE the substantial investments in the Nigerian power sector by past and present administrations, electricity situation has continued to worsen over the years in the country. NOIPolls Limited said in its ‘Power Poll Q2 2019 Report’ that the quarterly average cumulative hours of power supply dropped to 9.2 in second quarter from 9.6 in first quarter.

The report released on Wednesday, July 10 said: “What is more worrying in the power conundrum is that the more money is expended in the sector, the darker the country becomes as regards to the power supply. For instance, Nigeria has expended an estimated sum of N5 trillion ($31.45 billion) in the last 20 years to generate power. However, only a maximum of about 5,074 megawatts of electricity could be generated within this period, which is still grossly inadequate and derisory.”

The report said the decline in power supply in the second quarter might be attributed to the continuous breakdown of the national grid and other daunting challenges experienced at both levels of generation and transmission of electricity in the country. It said the decline had hampered economic activities, especially of businesses whose operation depended majorly on the power supply.

“This detrimental and undesirable event highlights a major challenge in the power sector which needs urgent attention due to its devastating effects on the country’s economy. It must also be stated that for a country of approximately 200 million Nigerians, a minimum of 30,000 megawatts of electricity need to be generated. It is against this backdrop that NOIPolls conducted its quarterly power poll to assess electricity distribution to Nigerian households in the second quarter of 2019,” NOIPolls said.

It said quarterly analysis of results revealed that a larger proportion of Nigerians (37 percent) reported that they experienced better power supply to their respective households in first quarter than in second quarter (31 percent). The report, however, said monthly analysis of power supply to Nigerian households revealed a steady increase in the proportion of Nigerians who experienced an improvement from April (28 percent) to June (36 percent).

“Subsequently, the monthly analysis revealed that June (9.4 hours) recorded the highest average daily cumulative hours of power supply to Nigerian households. However, analysis for the first half of the year showed that January had the highest average daily cumulative hours of power supply to Nigerian households which stood at an average of 10.2 hours daily.”

Meanwhile, power distribution companies, Discos, owe service providers, including the Transmission Company of Nigeria, TCN, a total of N263 billion. The service providers in the power sector are the Nigerian Electricity Regulatory Commission, the Nigerian Bulk Electricity Trading Plc, the Transmission Service Provider, the System Operator and the Market Operator.

The TSP, SO and MO are different arms of the TCN, which manages the national grid. Edmund Eje, market operator, in a video interview posted on the Twitter handle of the TCN, noted that the Transitional Electricity Market started in 2015.

“One of the major conditions for TEM is that the distribution companies will post letters of credit or guarantee to the market operator and the market operator will rest on these letters of credit. Assuming a Disco short pays its invoice, the market operator will fall back on this letter of credit. From 2015, the transactions concerning energy and capacity were handed over to the NBET, and then what was left for the market operator, apart from all market administration processes, is services payment,” he said.

According to Eje, the service payment involves the service charge, which the market operator collects from the Discos. “When TEM commenced, the Discos didn’t comply with this in the first and second months; an attempt was made to fall back or to have recourse to the letter of credit. The Discos went to court, obtained an injunction and stopped both NBET and the market operator from having their way.

“The outstanding bill on service charge today is N263bn – services only; we are not talking about energy and capacity that are handled by NBET. Averagely, what the Discos pay to the market operator is in the neighbourhood of 30 percent to 35 percent. Now, you would ask, ‘How have we been coping? We have small projects we should execute; we have salaries to pay and we have some other overheads.”

Eje said the market operator would ensure that the market rules are complied with by whoever has signed contracts with it. “So far, we have been receiving some recommendation that at least for once, the needful is being done in the market, and that is instilling discipline in the market because what has actually brought the market to where it is today is indiscipline in the market.

“If the service providers get their revenue in time and in full, they will be very efficient. The staff salaries will be paid on time. Today, we don’t pay salaries on time because we will expect the Discos to come in with their revenues before we think about salary payments. TCN is geared up to make sure that the needful is done and that transmission services are carried out efficiently.”

– July 12, 2019 @ 15:45 GMT |

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