The Minister of Power, Chief Adebayo Adelabu, yesterday lamented that the issues in the country’s power sector are multi-faceted and complicated, but surmountable. Adelabu, who spoke at a meeting with stakeholders in the industry in Abuja, revealed that upon thorough investigations of the sector, it was discovered that most of the problems are not all technical or engineering-related, but also has to do with liquidity, funding, structural or operational issues which with commitment can be resolved….CONTINUE READING HERE
“Though they are simple issues, they are in multiples, complicated and permeate all the sectors in the value chain,” Adelabu said.
To this end, the minister revealed that in the administration’s determination to find a lasting solution to challenges associated with gas supply to power Generating Companies (GENCOs) and general improvement across the power sector value chain, in conjunction with the Ministry of Petroleum Resources (Gas) has set up a ministerial committee towards resolving the crisis.
The committee will consist of representatives from the two ministries, gas suppliers, the Nigeria Electricity Regulatory Commission (NERC) and stakeholders in the electricity value chain sector.
“We discovered that most of the problems in the sector are not all technical or engineering-related, it actually has to do with liquidity, funding, structural or operational issues which anybody, that has the commitment, could resolve. Though they are simple issues, they are in multiples, complicated and permeates all the sectors in the value chain,” Adelabu said.
He emphasised that the main problem of the sector is liquidity and funding, adding that the sector is supposed to generate -funding if allowed to operate a commercial model whereby all the costs attributed to generation of power, transmission and distribution of power are recovered through the tariff while the operators are given a good mark up.
All which leads to a cost reflective tariff which is how the sector is supposed to operate. With this, there would be sustainability of the sector.
There would be continuity in production, transmission would be seamless while distribution would be impeccable”, he said.
However, he noted that the sector is not allowed to charge cost reflective tariff. “Government promised subsidy which is not a problem, but that is when government does its own part with timely release of money.
“Once the sector suffers from liquidity challenge, there would be no investment in the sector and that is why the structures are dilapidated. It’s important we resolve the liquidity issue”, he emphasised.
Adelabu also spoke on the pivotal role of the States in the power sector, adding that the DISCOs, as presently constituted, should be unbundled along State lines. “We need to encourage the States to have their own power generating company, encourage them to establish structures for transmission and distribution.
Each State government must also start showing interest in those in charge of distribution in their States, while the federal government can track generation and transmission, the States should be able to track the distribution companies”.
The Minister also spoke on strategy that the ministry would adopt to ensure incremental improvement in power supply in the country.
These strategies include; ensuring that the Rural Electrification Agency (REA) live up to expectation by serving the underserved and the unserved rural communities that may not be commercially attractive to the distribution companies, focusing on distributed power by intensifying effort to raise volume of renewable energy to national capacity, with focus on developing small hydro power plants along the 26 small dams in the county. “We can hybridized this with solar when the water level goes down….CONTINUE READING HERE
