Solve Transmission hiccups to boost Power sector experts tell FG
Any effort by government to address the grappling power situation in Nigeria will only end up being an effort in futility if the transmission hiccups are not tackled industry expert have said.
They observed that absence of adequate infrastructure for transmission and distribution of power across the gas to power value chain if not effectively tackle may prevent Nigeria from achieving her targets to increase power generation
Analysts opine that tackling transmission and distribution hiccups in the next couple of years by the Buhari led administration is the right step to achieving effective power sector growth. They however noted that to monster the required investment under this current circumstance may be difficult unless things improve by way of clearer government incentives for investment.
Claudius A. Awosope, an industry expert pointed out that the mobilization 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 stressing that this must be situated within the context of the risks that would impact the industry.
“Risks associated with investment to strengthen power supply networks in both the short and medium term as investor/producers and the state are essential for efficient allocation of resources in the industry for a sustainable electricity future in Nigeria and the sub-region”. He said.
Industry watcher are of the view that Electricity supply or the lack of it will remain a very sensitive issue with several political and economic sophistications, as the questions that continue to beg for answer among industry watchers is will Nigeria ever attain effective power supply to grow the economy?.
Dolapo Oni, Head, Energy Research, Ecobank Development Company (EDC) Nigeria Limited on his part maintains that achieving required efficiency in the power sector as things stands now 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 four 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”.
Oni is optimistic that a lot of things could change between now and then 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
The immediate past government of Nigeria had planned to spend $18 billion to increase power generation, transmission and distribution by 2018. In the summation of analysts, this amount is enormous given industry experience.
They however opine that though this financial requirement is daunting, it is achievable. Only to the extent that the right institutional framework, policy consistency, appropriate incentive structure and security of investment and input would guarantee the required flow of investment.
Both domestic and foreign investors and producers have important roles to play in achieving a sustainable electricity future in Nigeria.
Industry watcher however 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 what kind of investments you can make with the money and how much of the money you can get.
They pointed out that sourcing the money outside the economy would mean target foreign direct investment (FDI) in form of private investors to come and drop the money, he however noted that foreign investors would not want to come into the economy as long as there is risk of exchange rate losses.