Demand-supply imbalance in power industry threatens economic growth
Energy experts have observed that the current imbalance in demand and supply of electricity will always present a big challenge in Nigeria achieving her target for industrial growth and productivity.
They said the power sector in Nigeria with its huge investment prospects across the value chain have failed to command investors’ confidence as operators continues to grapple with avalanche of challenges that have plagued the sector in decades.
Industry watchers maintain that these hiccups no doubt accounts for why installed capacities which are grossly inadequate exceed actual generated capacity.
Ayodele Oni, an energy expert was recently quoted in an article to have said that ineffective regulations, inappropriate industry, market structure, unclear delineation of roles, duties and tasks, low level of technological upgrade together with abysmally poor maintenance and investments levels also contributed to the pathetic state of the sector.
Oni however hinted challenges like low tariff, poor revenue collection, gross inadequate metering, poor billing and electricity theft; must be urgently tackled by operators if not its effect will continue the trend of huge revenue losses.
Analysts are of the views that a strategic step towards addressing the Demand-supply imbalance in power industry is to design a Power Policy adding that this involves the development and approval of a power policy by the central government.
They opine that the power policy provides comprehensive strategies for power sector reform and the political-will needed to sustain the reform process. “The policy is typically the starting point and provides the broad guidelines for the reform programme”.
According to them, “Following the development of a power policy, there is need for the enactment of relevant legislation necessary for implementing the said policy”.
“This is necessary because policies require a legal instrument for their implementation. ` With the enactment of the “Electricity Reform Act 2005 by the National Assembly, it is safe to conclude that the relevant legislation for the implementation of the policy has been put in place”. They added.
Seyi Fabode, CEO/ Co-Founder of Power2Switch disclosed that the challenges in the power sector were as a result of neglect to invest in power industry infrastructure development and maintenance.
According to him, “There were no power stations built in Nigeria throughout the 1990’s. We failed at long term systems and needs planning because we were too busy just trying to survive”.
Fabode was quick to point out that consumers of electricity in Nigeria only requires from operators in the power sector space that electricity be delivered safely, reliably and affordably, noting that Electricity is the engine of growth in every developed country in the world.
“Provision of electricity ranks very closely in importance to good governance because it is a big input into productivity growth, especially in the long run, which, in itself, is a strong driver of economic growth”
“If we increase the productivity of the average Nigerian we increase the growth of the economy. Increased productivity result in greater money earned which in turn leads to greater money spent and improved credit flow within the economy”, he said.
He further observes that current policies are structured to rebuild or improve old infrastructure and maintain less relevant business models. The good-governance experiment is currently ongoing in Nigeria; it’s time to begin the provision-of-electricity experiment with a clear view of the industry’s future.
He insists that this new business model solves the real problems facing the Nigeria power sector; generation and a focus on solving the problems of the past. And by the way, taking the future virtual utility approach also solves the problem that continues to plague the Nigerian economic mindset.
KELECHI EWUZIE