Making a case to an enhance power sector operation
The current issues bedeviling the Nigeria power sector have again necessitated the call by concerned industry experts to clamour for the review of the existing electricity laws in the country advance service delivery sector.
Stakeholders in the sector are of the opinion that the present regulating laws and policies in the Nigerian power sector were part of colonial legacies that needed to be abolished for more realistic and workable model.
They opine that the future of Nigeria’s power sector would continue to be called to question because the environment is not attractive for investment that would help address various challenges facing the industry.
Analysts are worried that a policy that puts power on exclusive legislative list will only stifles the prospect of development in the power sector adding that foreign investors are not willing to invest in the Sector because government has not addressed major issues that would guarantee return on investment.
Industry close watchers continue to express concerns about the lack of cost reflective tariff, gas supply constraints, poor transmission network, non-credit worthiness of DISCOs, over leveraged power assets, value chain dis-alignment and lack of will to enforce agreements.
According to experts, “Many projects have been stalled due to finance constraints and tariff issues. Tariff must reflect currency movement, “so there must be attachment of tariff to currency movements and adjustments must be done, and tariff review will help DISCOs to recover costs and pay for gas”.
Barth Nnaji, former minister of power at an event in Lagos recently said lack of industry deregulation and absence of proper legislation has discouraged investment because it is only deregulation that will allow investors to consider investment in gas production and transportation.
Nnaji said government does not have the funds to put the transmission network in proper shape. He advised government to consider concessioning the transmission network which he said should be broken into segments but properly interconnected.
Report indicates that DISCOs are facing serious challenges because the technical aspect of the system is still bad leading to 50 per cent of inefficiency in the sector.
“We can reduce losses by investing in technical areas and also there is lack of commercial knowledge among government functionaries on how to do agreement, and again the country lacks the will to enforce agreements”, Nnaji added.
Experts are further saddened that the Nigeria has not been able to jumpstart the electricity market owing to liquidity issue in the sector which greatly derailed a number of plans by power sector operators.
They commended government policy on captive power options which has the capacity of delivering electricity to end users not captured by the weak grid system, because through that option we bypass all those inefficiencies.
In their various comments, some industry close observers faulted the fusing of the power ministry into other ministries, and advocated that the power ministry should be independent to effectively addressing the daunting challenges in the sector.
While calling on the federal government to declare a state of emergency in the power sector, they again reiterated the need for the federal government to urgently appoint a qualified engineer with requisite experience in the energy sector as minister of power.
KELECHI EWUZIE