Slow implementation of policy hampers Power sector growth –analysts
Industry watchers in the oil and gas sector are worried that Nigeria’s power sector has not attained her optimum level of development when compared to the huge potential inherent in term material resources.
Analysts observe that despite assurances by the present administration to bring succour to the sector bedeviled by gross decadence in infrastructure, transmission, distribution capacity, lack of transparency, Gas shortages, pipeline vandalism, inadequate funding and unprofitable prices, its however sad to note that actions and inactions by government as it pertains to implementation appears to leave investors short on confidence.
Aside the challenges of high tariff, estimated bills, infrastructure burden facing operators in the power sector, there is the unresolved issue of currency mix match between investment currency (Dollars) and income currency that is peculiar to the gas to power sector which have in no small ways limited investment opportunities with regards to effort to grow the power sector.
The power sector value chain is interconnected, if there is disruption in on part it cascades across the whole sector. Problems with electricity generation impact on distribution and in turn distribution collection losses, which undermines the financial well-being of all market participants.
It sad to see that the government of Muhammadu Buhari have done little by way of implementing major strategic discernible action plan to deliver constant, reliable power supply.
Electricity which in most developed countries acts as catalyst for economic development sadly eludes Nigeria as the attendant poor power supply continues to inhibit the growth of the virtually all sectors of the economy.
Efforts in the past by successive governments to stabilise the epileptic power system have failed due to lack of well co-ordinated plan of action and inherent corruption from the leaders despite billions of dollars the government claimed to have spent.
There are still daunting challenges as distribution companies (Discos) still suffers continued losses due to collection, technical and other commercial issues. In the early part of Buhari’s tenure, there was some increase in the operational generation capacity by almost 30 percent. There was also the execution of a handful of World Bank partial risk guarantees to support the financing of new IPPs.
Discos continues to hinge their inability to meet its service delivery obligations on lack of access to foreign exchange as revenue shortfall has adversely impacted the ability of the Discos to make capital investments in metering, network expansion, equipment rehabilitation and replacement that are critical to service delivery improvement.
Dolapo Oni, Head, Energy Research, Ecobank Development Company (EDC) Nigeria Limited opines Nigeria may be celebrating her independence, the bottom line still remain that government despite all their efforts have not fulfilled the aspirations of the over 180 million population which is to have constant, reliable power supply.
Oni observes that with 75 percent of gas accounting for power generation in the country, Nigeria may never achieve sustainable power generation as long as Niger Delta avengers and other militant groups engage in oil and gas pipeline vandalism.
“Nigeria doesn’t have a very strong network of gas pipelines such that if one is vandalising, we can route the gas through another pipeline”.
He further observed that Nigeria’s power sector was set up on a wrong footing from the beginning.
According to him, “Nigeria should have phased her privatisation. Maybe we should have done the discos first and ensure that we sort out all the problems at the disco level and then we move to transmission sort out all the issues at the transmission level before we move to generation”
Government need to ensure that the right tariff are set up and need to create regulation to support proper collection of tariff , criminalise power theft (illegal connection) so that people will pay for power. Give Nigerians the option of being able to switch to any source of power that they want to use”.
Industry watchers insists that as the country enter into a new phase of her existence, one strategic way to address the growing challenge in the sector is for the Government to enforce the roll out of meters. Discos should deliver meters to everybody. You can charge it over a period of time, but everybody should have proper meters. These are things government need to put in place.
They observe Transmission capacity still in the hand of government needs to be expanded. “Transmission should always lead generation. You can’t be generating 7,000 mega watts and be transmitting only 4,000” they queried.
KELECHI EWUZIE