Power
–
The fourth national electricity power conference ends in Lagos with participants agreeing that electricity supply has not changed even with the privatisation of the power sector
| By Anayo Ezugwu | Nov. 3, 2014 @ 01:00 GMT |
THE federal government has reassured Nigerians of its commitment to the ongoing electricity power reform in the country. Chinedu Nebo, minister of power, who spoke at the 4th Worldstage National Electricity Power Conference, on Thursday, October 23, in Lagos, said the privatisation of the power sector has been internationally acclaimed as one of the most ambitious reform programmes ever embarked upon by the country.
He admitted that shortage of gas supply posed a greater challenge to the sector. Nebo said even when the gas infrastructure was free of sabotage, obtaining the gas remained a problem due to low price, and that domestic gas market was presently unattractive for gas producers. He also hinted that the federal government would soon open Nigeria power sector investment office to engage investors. “We are now marching towards the declaration of the transitional electricity market where the power sector will fully function as a market with full contractual obligations for all market participants.”
The minister, who was represented by Olajuwon Olaleye, said the ministry was exploring collaboration with the minister of petroleum resources to locate gas power plants closer to gas sources in marginal fields and in the inland basins to reduce risks and costs of gas transportation over long pipelines. “With the recent CBN intervention of N2.13billion to offset legacy gas debts and post-handover gas and power debts, it is expected we will have stability in the electricity supply industry going forward,” he said.
On his part, Adeola Adenikinju, a professor of economics and director, Centre for Petroleum, Energy Economics and Law, University of Ibadan, said the absence of electricity supply security, huge capacity cum skills gap, inadequate transmission and distribution infrastructure, institutional and regulatory capabilities and transparency and independence of organisations involved in the privatization exercise are the major challenges facing the post-privatisation of the power sector in Nigeria.
According to Adenikinju, who was represented by Joseph Omojolaibi, privatisation has not resulted in much higher power generation. He said the situation of electricity as at today has not seen improvement at the consumption end of the spectrum. “The system needs to be optimised in terms of location of new power plants to ensure even distribution across the country as well as minimise the cost of location between access to fuel and consumption centres. Presently, gas is the overwhelming preferred source of fuels for electricity supply. Natural gas at present is located in one region of the country. This throws out some potential risks in terms of stability of supply,” he said.
Adenikinju also observed that the present reform has also not provided enough incentives for private sector participation in renewable energy and other energy sources to diversify the electricity supply base for the country and provide more energy security and access, arguing that this will be particularly important in the rural areas where grid connections may not be feasible economically or physically. He said huge capacity gap that needed to be addressed in the new industry that will evolve, was imperative with a view to keeping pace with the expected increase in generation capacity between now and 2020.
In order to move the power sector forward, Adenikinju emphasised the need to promote a more balanced electricity generation mix to improve energy security, pointing out that the overwhelming reliance on gas-thermal from a relatively volatile part of the country, easily put the whole supply chain in jeopardy and at the mercy of vandals. He also suggested the promotion of other sources of generating electricity, even if they are more expensive such as renewable, coal, and others.
“Access to electricity should not be restricted to the urban centres alone. Electrifying the rural areas is one of the fastest ways to massively reduce poverty. China relied heavily on small hydro power to connect the rural and isolated communities with electricity. The current body of legislation guiding electricity reforms does not provide appropriate incentives for small hydro, wind, solar PV, biogas, and others to rapidly expand electricity to the unreached areas. The lesson from Germany and China could be very relevant to us.”
Segun Adeleye, president, Worldstage Group Limited, said that not much progress has been recorded in the power sector in the last 12 months after the private sector was involved in the industry. “Now, a year after privatisation, what is glaring in the surface is frustration by consumers over lack of improvement in power supply, after their hope had been raised that the coming of private owners would magically bring about a change of fortune. However, behind the scene, the new owners have been struggling with more problems,” he said.
Adeleye, however, acknowledged that there are myriad of obstacles to be surmounted by both government and operators in the sector without which there will be no progress in the foreseeable future. He identified challenges being currently confronted by the sector to include rising activities of vandals who burst gas pipelines and other power transmission equipment; high level of power theft and by–passing metering; gas supply limitation; transmission wheeling capacity; lack of accurate data on power demand of the entire country; non-alignment of the entire value chain of power generation, transmission and distribution; and concerns over security.
|
Tags:
