Why sustainable domestic gas supply is imperative for the power sector– experts
As the issue around shortage of gas continues to hamper the growth of the power sector, industry watchers are of the opinion that to achieve sustainable supply growth in gas to the domestic market there is the need for the enforcement of bankable Gas Supply Agreements in the long-term.
They observe that as Government desires to ensure adequate provision of the basic infrastructure to drive economic growth, saying that the wheels of the economy would not turn, if the Generating companies GENCOs are unable to generate electricity required to power the productive engines.
Joy Ogaji an energy expert said that the situation with the power generating companies is gradually gravitating menacingly towards an acute crisis point. If urgent steps are not taken by all stakeholders, total cessation of operations by GENCOs is imminent.
Industry analysts observe that the power sector operates on the tripod of electricity generation, transmission and distribution. The trio makes up the value chain that brings electricity to consumers.
The generation companies (GENCOs) are the producers of the vital commodity transmitted to the distribution companies (DISCOs) for distribution to the final consumers.
They argue that considering the importance of power as the fundamental ingredient for the growth of any economy, getting all the parts to work in sync is crucial. But, getting the generation to function effectively is more important. It is the aces required to complete the puzzle.
In the power value chain, Generation involves producing electric power from sources of primary energy at a power station by electromechanical generators, primarily driven by heat engines fueled by chemical combustion or nuclear fission
Industry watchers observed that despite private investment into the power sector, issues with collection, transmission, gas supply among others have limited the impact that private sector would have had in the sector especially as it affect the generation companies (GENCOS).
They in the wake of these realities expressed concern over the state of the power sector in Nigeria and the implications for investors in the sector; the various disruptions to the operations of other enterprises in the economy, especially the SMEs and the hardship suffered by the citizens.
Sunday Oduntan, executive director, research and advocacy, Association of Electricity distribution companies observe that as long as the same fundamental issues and challenges exist in the power sector, there are no miracles to seeking the turnaround that we all desire. “No investor will invest in a sector that returns, approximately, 50 kobo of every Naira of energy that is delivered”.
Oduntan pointed out that government have failed to honour any of its commitments to investors as the issues of improvement in gas supply have not materialise because Pipeline vandalisation have constantly resulted in an average of 50% reduction in generation, for the period of May, June and July.
Isreal Aye, Director, Aspen Energy Nigeria Group observe that the over centralisation of power generation or regulation of power is part of the problem we have in Nigeria adding that Nigeria does not need to generate the bulk of her energy needed to power this her economy from gas sources alone.
Aye opines that the challenge of power in Nigeria currently is that the technology required for the sector to function optimally is not available, saying that the fuel sources whether it is coal, solar or gas are abundantly available in Nigeria, just that the ability to convert these resources efficiently into power is lacking.
KELECHI EWUZIE