Energy - News - February 23, 2022

Why ongoing power sector reforms are critical – NBET MD

By Bassey Udo

The ongoing power sector reforms were embarked upon for the government to achieve the financial health of the electricity market and the technical capacity to bridge the deficit between supply and demand in the country, the Managing Director, Nigerian Bulk Electricity Trading Company (NBET) Plc, Nneaemeka Ewelukwa, has said.

Ewelukwa spoke in Lagos at the capacity building workshop for members of Power Correspondents Association (PCAN) and Civil Society Organization on the theme ‘Building knowledge and plugging skills gap in power sector reporting.’

The NBET boss said there existed a mismatch between the national peak demand forecast of about 19,788 MW and peak generation, which
the Federal Government was seeking bridge through the reforms to build a technically robust Nigerian Electricity Supply Industry (NESI).

He said the government’s plan was to continue expanding the generation, transmission and distribution capacities to bridge the country’s demand gap.

The electricity market, he noted, involved the capacity to generate electricity and the willingness to pay for the supplied power, adding that it would be critical to ensure the electricity that would flow in the system was procured.

He insisted that the loan the Federal was investing in the power sector must be repaid through tariffs for consumed energy.

With the reforms, Ewelukwa said the electricity distribution companies were already improving on their performances and facilities to supply about 15,262MW of electricity to the national grid.

On how to bridge the gap between peak demand and peak generation, NBET CEO said two things would need to happen.

“The system must have the capacity to physically move additional power, while the power generation companies must have the capacity to bring that additional power, which mist be paid for,” he said.

To realise the transmission expansion plan, Ewelukwa said the government has begun the implementation of the agenda under the FGN/Simens Presidential Power Initiative, with Phase 1 expected to transmit about 7,000MW; Phase 2 11,000MW, and Phase 3 (25,000MW) supply.
On the timeline for bridging the demand-supply gap, Ewelukwa said it would be sooner than later, as the present administration was keen on implementing these reforms to achieve set targets.

At inceptionnof the reform agenda, he said NBET took over the Power Purchase Agreements that the defunct Power Holding Company (PHCN) signed with some gas suppliers, including the gas component.

On NBET’s function in a Transition Electricity Based Market, Ewelukwa explained that it was characterized by a market-based agreement for electricity trading.

“NBET is designed to be a temporary bridge in the electricity market between the electricity generation companies and ther distribution counterparts.

“NBET has a long-term role to play in the market, to drive market competition by ensuring that it is moved from a government centres market to a private sector-driven electricity market.

Going forward, NBET will no longer need to buy power as a central procurer of electricity, rather the power purchased will stand the process of handing it over to the DisCos and the GenCos so that the DisCos can now buy power directly from GenCos.

“NBET is enthusiastically looking at the point when it will actually start the innovation process of handing over the PPAs signed to power distribution licensees and eligible customers as the case may be,” Ewelukwa said.

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