Absence of a functional framework may scuttle Nigeria’s power generation aspiration

Any plans by Nigeria to achieve the desire increase in power generation to in the foreseeable future may never see the light of day owing to the absence of a functional framework to push the energy sector projection industry experts has warned Power sector analysts observe until the right institutional framework, policy consistency, appropriate incentive structure and security of investment are guarantee by government, Nigeria as the second largest economy by GDP should forget achieving an increase in power generation.

They pointed out that both domestic and foreign investors and producers have important roles to play in achieving a sustainable electricity future in Nigeria. Achieving any increased in gigawatts of electricity in the view of Dolapo Oni, Head, Energy Research, Ecobank Development Company (EDC) Nigeria Limited is simply not possible owing to the fact that there are critical issues that need to be addressed.

According to him, “There are several issues that need to be addressed on the distribution side of power. For the whole power/ energy sector to work, people must pay their bills. People don’t want to pay estimated bills and people don’t want to pay bills for power they don’t get. So people need some sort of orientation” He further pointed out that generation is always an easy part of the mix because going from 7, 000 mega watts to 20,000 can be achieved within two years.

He is however concerned that if Nigeria generate the power but can’t sell it or can’t transmit it, then it is redundant “so there are several issues that needs to be fix before we can think of achieving going from 7,000 megawatts to 20,000 megawatts”.

“We should not expect that much of a change. There might be improvement in terms of generation because there are still several generation plants ongoing and there are plans to build coal power plant construction have started already. There are plans to build more gas power plants; there are plans to increase output from some of the existing ones”.

“The key thing is watching how transmission and distribution shapes up in the next years, then that goal starts to look like a reality and even for that goal, you can’t just go from 7,000 to 20, 000. The amount of capital investment required, I am not sure we can monster it under this current circumstance unless things improve”, he said.

He however opines that a lot of things could change between now and couple of years but the most important thing is for government to provide an environment of stability and certainty of exchange rate risk and remove the reliance on crude oil.

Oni further observe that the problem with investment is a case of where is the money going to come from because where the money comes from determines how long you can keep the money, the kind of investments to make with the money and how much of the money energy sector can get. Mobilisation of the financial resources to support a dramatic scaling up of generating capacity, more than twenty-fold in another four years will be a major challenge observes Claudius Awosope, an energy expert.

He opine that risks associated with investment to strengthen power supply networks in both the short and medium term is essential for efficient allocation of resources in the industry for a sustainable electricity future in Nigeria and the sub-region.