Policy inconsistency, non functional framework threaten 2020 power generation aspiration

Nigeria may never achieve the desire to increase power generation to 40 gigawatts by 2020, owing to policy inconsistency and absence of a functional framework to push the energy sector projection, according to BusinessDay investigations.

Industry experts observe that achieving this as contained in the Infrastructure Master Plan within the next four years may never materialise until the right institutional framework, policy consistency, appropriate incentive structure and security of investment are guarantee by government.

They point out that both domestic and foreign investors have important roles to play in achieving a sustainable electricity future in Nigeria.

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, Claudius Awosope, an energy expert, observes.

Awosope says risks associated with investment to strengthen power supply networks in both the short and medium terms are essential for efficient allocation of resources in the industry for a sustainable electricity future in Nigeria and the sub-region.

Achieving 40 gigawatts of electricity come 2020, 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 Oni, “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.”

Oni points out that generation is always an easy part of the mix, because going from 7,000 megawatts to 20,000 megawatts can be achieved within two years. He is however concerned that if Nigeria generates the power but can’t sell it or can’t transmit it, then it is redundant. “So, there are several issues that need 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, and construction has 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 shape 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 circumstances, unless things improve,” he said.

He however opines that a lot of things could change between now and the year 2020, 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.
On his part, Wumi Iledare, director of Emerald Energy Institute, University of Port Harcourt, Rivers State, says the projected year for achieving the increase in power generation is only four years away, saying, “2020 is only four years from now, the administrative set up and industry governance structure is not in place to make this happen.

“Perhaps, a 20 gigawatts dream within the next four years is a more realistic dream, and even with that I hasten to opine that we have a weak governance structure for the oil and gas industry to make it happen.”