Power Distribution in Nigeria: A Gift that Keeps Giving?

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Thursday, July 08, 2021 / 12:09 PM / by CSL Research / Header Image Credit: Daily Post Nigeria

 

Yesterday, according to a Punch news report, Dr. Joy Ogaji, the executive secretary of the Association of Power Generating Companies of Nigeria disclosed that the power sector lost 3000MW of electricity out of an earlier available 9,000MW capacity in Nigeria in the last one year. Noteworthy is that only 25 out of the 160 licensed generating plants with a combined capacity of 13,000MW are operative. Furthermore, the secretary confirmed that despite the plunge in capacity, excess capacity still exists as Distribution Companies (DisCos) currently do not take up all generated power. The Transmission Company of Nigeria (TCN), had on several occasions complained about the rejection of electricity by the distributors, who, in their turn, have argued that

 

TCN was dropping electricity load in locations where it was tough for Discos to recoup their tariffs, as residents in such areas found it difficult to pay their electricity bills.


Poor power supply remains a major drawback to economic development in Nigeria. The privatisation exercise concluded in 2013 brought generation and distribution companies into private ownership but has done little - if anything - to increase Nigeria's available output. Although Nigeria has 13,000MW of installed generation capacity, only c.6,000 MW is currently available and some of these, get rejected by the discos. The challenges in the sector run across the entire power value chain of generation, transmission and distribution. Constraints such as inadequate gas supply to power plants, aged transmission infrastructure and low tariffs are some of the factors impeding power sector reforms.

 

The Federal Government of Nigeria recently commenced a process that would lead to the complete privatization of the sector, given that it intends to give up ownership and control of the Transmission Company of Nigeria. The Transmission Company of Nigeria (TCN) oversees transmission – wheeling power around the grid and installing transmission lines and remains in government hands. One of the main reasons the FGN privatised the sector was because NEPA/PHCN had not kept up with investing in the electricity transmission infrastructure - the critical link between generating and supplying electricity to the end-user. It appears however that the NEPA/PHCN pattern of non-performance continues till date.

 

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