Business - Business & Economy - Energy - News - October 28, 2021

Minister unveils reform agenda for power sector growth

The Federal Government is to intensify performance monitoring of the licensees and the licensing regime under the revised Performance Improvement Plans (PIP), Minister of Power, Abubakar Aliyu, has said.

Aliyu who was addressing the media on the update of his ministry’s activities in the last 50 days in the office said the monitoring exercise enabled the government to have a better understanding of why some critical stakeholders in the sector were performing below expectation.

“We shall be taking a careful and detailed look at issues of policy, capacity and the technical requirement, amongst other things.

One very critical concern that we must address in this performance monitoring process is to find out if the terms for granting of licenses were onerous,” he said.

The monitoring exercise, he said, would help reveal whether there was need for additional laws and/or regulations to enable the sector to perform optimally

The Ministry, he said, was working tirelessly to explore opportunities that would, in the short term, deliver the much-desired quick wins in the sector, while focusing on the long-term objectives of increasing the available power, improving the quality of services, attracting the much-needed investment, promoting efficiency, competition and growth and ensuring transparency and accountability in the power sector value chain.

The Minister identified the primary policy aim of the present administration, which he was to provide stable, good quality, reliable and affordable electricity for the people of Nigeria for domestic and industrial usage.

We are working on the full implementation of the Electric Power Sector Reform Act of March 2005 to match up with the huge sums invested by the government to realize the objectives in the sector.

To align responsibilities within the governance system of the power sector towards optimal performance, the Minister said specific areas of conflict and tensions within the power industry value chain were being harmonized for greater synergy.

He said there were ongoing conversations within the power value chain among stakeholders to bridge the observed disconnect within the sector.

Within the value chain, he said some responsibilities were being performed by some private sector partners and other agencies of government by virtue of the provisions of the electric power sector reform Act (EPSRA).

He said these partners were being more closely monitored and sometimes given the needed push in the right direction to achieve the objectives in the sector.

Expressing optimism of an imminent turnaround in the power sector, the Minister said the government was determined to deal with some policy issues, the legal and regulatory bottlenecks, and the human factors involved in the implementation and coordination of the power sector’s road map.

He said although the development of the sector was capital-intensive and currently in need of massive injection of fresh capital, its viability was never in doubt as steady progress was being made to realize set targets.

The Nigerian Power sector, the Minister said, was confronted by many challenges, including service quality and Sector illiquidity, which are affecting the desired growth of the sector.

He said too many people were still not satisfied with the quality of service in terms of hours of supply, voltage, disputed/estimated bills, or access to electricity.

Besides, he said collections by the electricity distribution companies from consumers do not cover the full investment and costs of the power generation companies who produce and sell the power, and the Transmission Company of Nigeria which wheels the power to the DiSCos.

“The Federal Government financial support is required to cover the shortfall. The resulting huge burden on Government is unsustainable,” the Minister said.

On the immediate focus of the Ministry, he said attention would shift to how to achieve set targets through effective policy and regulation as well as cooperative engagement with private and public sector operators.
The areas of focus include creation of liquidity in the electricity market; improved services in terms of hours of supply, billing transparency and accuracy, and wider access to electricity.

Others include bringing consumers, operators and investors confidence back to the sector, to attract foreign and local investment into the sector; create jobs, and promote competition by bringing in more participants in the Nigerian Electricity Market (NEM).

The key policies and initiatives of the Ministry to achieve these objectives include acceleration of progress and completion of key projects of the Ministry and its partners.

Some of the projects requiring special attention include Kashimbilla 40MW power station; Gurara phase 2 being developed in partnership with Ministry of Water Resources to deliver 30MW to the grid; Zungeru Hydroelectric Power Project to be completed next year to deliver another 700MW of renewable power.

Others include Katsina Wind farm, to generate 10MW on the grid; Dadin Kowa 40MW power station started under a concession with the private investor; Mambilla Hydroelectric Power Project contracted in 2017, and TCN’s Transmission Rehabilitation and Expansion Programme funded by various multilateral financial institutions to ensure adequacy and stability of the National Grid.

The other initiatives include systematic implementation of the Presidential Power Initiative (PPI) through the Siemens Nigeria and the Federal Government Power Infrastructure revamp agreement of 2020; the Nigerian Electrification Roadmap (NER) partnership to expand Nigeria’s electricity capacity from the current average output 4,500MWh/h to 25,000MW.

The first phase of the PPI, the Minister said, was the upgrading and expansion of the vital infrastructure of the TCN and DIScos to achieve 7,000MW.

On policies and regulations, he said the Eligible Customer and related regulations would be reinvigorated to move the electricity industry from the present interim commercial structure to full commercial structure for better services directly with willing GenCos and service providers ready to make the new investments to deliver better services.

Also, the Meter Asset Provider programme to attract investors into metering; Mini-grid policy and regulation that allows underserved consumers to partner with investors and contractors to get better services; optimizing the available generation capacity and putting them to good use to ensure the unutilized capacity is used in line with the Ministry’s incremental power focus and the Eligible Customer policy.

Again, strengthening the regulator to ensure all sector players and stakeholders work according to the rules and guidelines especially in dealing with customers.

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