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Tag: Nigerian Electricity Supply Industry

  • Power sector gets roadmap

    Power sector gets roadmap

    • Adopts National Integrated Electricity Policy

    The Federal Government has formally ratified and  adopted a road map for the Nigerian Electricity Supply Industry (NESI) by  approving  the National Integrated Electricity Policy( NIEP).

    The policy which had been ready since December 2024 and submitted to President Bola Ahmed Tinubu was ratified on Monday at the weekly Federal Executive Council (FEC) meeting.

    The policy is a comprehensive framework designed to transform Nigeria’s electricity sector in alignment with National development objectives and international best practices as mandated by Section 3(3) of the revised Electricity Act 2023.

    According to a statement by Bolaji Tunji, Special Adviser,  Strategic Communications and Media Relations, quoting the Minister of Power, Chief Adebayo Adelabu, the policy implementation has already started  and will now gain momentum  with the President’s approval while the impact would soon be felt adding that the  Electricity Act 2023 requires the Federal Government through the Ministry of Power to initiate the process for the preparation and publication in the Federal Government ‘s gazette, an integrated National Electricity Policy and Strategic Implementation Plan,  within one year of the commencement of the Electricity Act.

    According to the Minister, “ the road map Policy addresses critical challenges in Nigeria’s electricity sector  through comprehensive framework for sector transformation with clear guidelines for sustainable power generation,  transmission  distribution as well as integration of renewable energy sources, its promotion , energy efficiency and enhancement of sector governance”,.

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    He described the passage of the Electricity Act 2023 as a pivotal moment for the Electricity sector as it signals a transformative change which has laid  the foundation for NESI, thus enabling exponential socio-economic growth.

    “This National Integrated Electricity Policy and Strategic Implementation Plan (NIEP) is a comprehensive roadmap developed to guide all stakeholders – the Federal and State Governments, market participants, investors, and indeed all Nigerians, through this transition”.

    Adelabu said the preparation of the policy represents the collective efforts of the Ministry in collaboration with a wide cross-section of stakeholders across the public and private sectors at national and State levels, civil society organizations,  academic institutions,  captains of industry, donor partners, development institutions,  private sector participants and consumer advocacy groups, to address the complex challenges faced by NESI, from infrastructure deficits, inadequate capital to regulatory inefficiencies.         

    “The NIEP is a very significant evolution from the National Electric Power Policy of 2001, which has been long overdue for replacement. The Policy outlines various initiatives to aid the growth and development of State Electricity Markets (SEMs). It fosters a decentralised but collaborative approach to energy management and resource planning. This policy  is a living document that will  evolve  with the Industry’s needs and challenges. It underscores the importance of collaboration, innovation, and a steadfast commitment to consumer protection and engagement”.

    The Policy is structured across eight chapters which comprehensively address the historical perspective of the Nigeria Electricity Sector, focus on key features of the Electricity Act 2023, Nigeria’s electricity Policy objectives, electricity market design, value chain analysis, stakeholders roles and responsibilities, climate change and low carbon economy initiatives,  gender equality  and social inclusion, local content development including research and development,  commercial , legal and regulatory frameworks.

  • Power sector shortfall exceeds N1.4tr due to tariff

    Owing to the non-review of the Multi Year Tariff Order (MYTO) since February 1, 2016, the shortfall of the Nigerian Electricity Supply Industry (NESI) has exceeded N1.4trillion.

    The Executive Director, Association of Nigeria Electricity Distributors (ANED), Barrister Sunday Oduntan, broke the news to reporters in Abuja. 

    Asked to state what losses the freezing of the review has caused in the industry, he said that “our records show a figure in excess of N1.4trillion shortfall of the value chain.

    He promised that supposing the DisCos have a cost reflective tariff, the association would even be bold to list the names of the ones that are not performing well.

    Odutan however pointed out that if you cannot collect 30% (revenue) no Jupiter should expect you to remit 100%.”

    Giving conditions for an improved power supply in the industry, he said the sector must agree on the landing cost and the payment for it.

    The Executive Secretary however suggested that the “other option is to say the price is N100, we subsidize the poor ho cannot pay N11,000 for energy every month. You now subsidize it. If you introduce subsidy, the shortfall, the remaining figure has to be paid for.”

    According to him, Kenya; Tunisia; Uganda; South Africa; Ethiopia; Morocco; Egypt; Algieria and Bukinafaso are examples of countries that subsidize electricity for their poor consumers. 

    The third one is that if government is not buoyant enough to subsidize electricity, it should allow NERC to make a law “that will create an instrument called, regulatory asset.”

    Odutan noted that with the creation of the asset, will cover the shortfall in the industry because the DisCos can use it to borrow money from banks. 

    In every tariff computation, he said, there is an allowance for Capital Expenditure (CAPEX) which the operators expenditures must not exceed.

    According to him, the current tariff in the industry is a suppressed one as it gives all DisCos N45billion and each DisCo N5.5billion annual expenditure. 

    The ANED representative said TCN, on the other hand, has a total of N50billion annual expenditure approved for it, stressing that it is unfair for the TCN to complain about DisCos’ low investment.

    With that heavy CAPEX, he said, TCN cannot solve half of its problems.

    He also disproved the the acclaimed 7,000Mega Watts (mw) energy generation capacity, stressing that that quantum of electricity does not enter customers homes in Nigeria.

    Odutan added that “Today’s TCN has not transported to my members anything near 6,000Mega Watts (Mw) one day, never in the history of Nigeria.TCN has not whelled power up to 6,000mw for one week from 1960 to 2019. Let somebody come out and state otherwise. We will asked them which day and when?”

    He noted that the power firms have a higher revenue assurance in metered areas than those that under estimated billings.

    He said that despite that the Nigerian Electricity Regulatory Commission (NERC) has saddled the Metered Asset Providers (MAP) with the responsibility of metering the customers, the DisCos, will continue to meet up with their previous obligation on metering.

  • Govt urges enumeration of electricity consumers

    The Nigerian Electricity Supply Industry (NESI) needs to embark on the enumeration of electricity consumers, the Minister of Power, Works and Housing, Babatunde Fashola has said.

    He said the electricity market lacks the knowledge of how much, or how many people are utilising the power since some customers bear the burden of paying for stolen energy owing to lack of meters for billing consumption.

    Fashola called for social justice between the consumers and the service providers, urging whistleblowers to assist the NESI with intelligence on energy theft that could lead to the arrest of the thieves.

    The minster who spoke at a workshop for the Civil Societies Organizations (CSOs) on the Power Sector Reform Programme in Abuja, blamed the commercial losses of the Distribution Companies (DisCos) on energy theft.

    “Energy theft is the cause, if you sell the product and you don’t collect the money, that business is in danger. So, in my opinion, we need to know how many people are using the electricity. We don’t know.  So, some people are paying for what others are using and we need meters to achieve justice between consumers and service providers.

    “This is a place we need a lot of whistleblowing, if you know anybody who is stealing energy, call us so we will come and pick the person. So that he will stop being a problem to his community,” Fashola said.

    Some of the CSOs had lamented that the ministry was only considering the commercial losses of the DisCos, yet reticent about customers and communities that have also become investors, providing electricity cables, transformers and other equipment to the companies, who also charge them exorbitant estimated bills.

    Fashola asked the Nigeria Electricity Regulatory Commission (NERC) to respond to the CSOs position.

    Reacting, the Commissioner on Consumer Affairs, Dr. Moses Arigu, said the due process for community to follow to procure equipment as transformers for the DisCos, is to start from informing the DisCo, the Nigerian Electricity Management Service Agency to arrange and ensure the standard of the transformer prior to its procurement.

    He said: “The money is supposed to be refunded. Again, you have to work it out with the DisCo and that is not physical cash, but through energy crediting. So it is not that when we invest why should they send a bill again?

    Fashola said the final consultative forum for the metering regulation was held in Lagos on Monday and Tuesday. The document, according to him, will solve problems of estimated billings.

    The Power Sector Recovery Programme Components aims at the definition of a “tariff adjustment trajectory, so that tariffs cover the revenue requirement of efficient service provision by 2021.

  • AEDC denies issuing force majeure

    Abuja Electricity Distribution Company (AEDC) has denied issuing force majeure over eligible customer policy in the Nigerian Electricity Supply Industry (NESI), contrary to what was widely reported.

    In a statement that the Head, Corporate Communications, Oyebode Fadipe made available to reporters, he said the company was shocked at a newspaper report that listed AEDC among the firms that made the declaration.

    The statement said that: “We have neither declared any force majeure nor have conveyed such intention to the Bureau of Public Enterprises (BPE), Nigerian Electricity Regulatory Commission (NERC) or any other stakeholder in the Nigerian Electricity Supply Industry (NESI) nor do we intend to do so anytime soon.

    “We, therefore, urge our customers and stakeholders to disregard the news as it has nothing to down the AEDC Plc as a player in the NESI.”

     

  • AEDC denies issuing force majeure

    Abuja Electricity Distribution Company (AEDC) has denied issuing force majeure over eligible customer policy in the Nigerian Electricity Supply Industry (NESI), contrary to what was widely reported.

    In a statement that the Head, Corporate Communications, Oyebode Fadipe made available to reporters, he said the company was shocked at a newspaper report that listed AEDC among the firms that made the declaration.

    The statement said that: “We have neither declared any force majeure nor have conveyed such intention to the Bureau of Public Enterprises (BPE), Nigerian Electricity Regulatory Commission (NERC) or any other stakeholder in the Nigerian Electricity Supply Industry (NESI) nor do we intend to do so anytime soon.

    “We, therefore, urge our customers and stakeholders to disregard the news as it has nothing to down the AEDC Plc as a player in the NESI.”

     

  • GenCos to NERC: add stranded 2,000MW to capacity

    GenCos to NERC: add stranded 2,000MW to capacity

    The electricity Generation Companies (GenCos) on Monday urged the Nigeria Electricity Regulatory Commission (NERC) to classify the stranded 2,000Mega Watts as part of the available generation capacity in the Nigerian Electricity Supply Industry (NESI).

    The commission, according to its presentation on the review of the Multi-Year Tariff Order (MYTO) methodology by Senior Manager, Market and Rate, Abbah Tera, takes generation capacity as one of the criteria for review of tariff.

    Responding to the presentation, the Executive Secretary, Association of Power Generation Companies (APGC), Mrs. Joy Ogaji, said that that the stranded capacity is not utilized does not mean that it is not produced by the generation companies.

    She noted that there is enough gas but the only constraint its cost, stressing that the GenCos should not suffer owing to the stranded power. 

    Her words: “We are not saying we don’t have enough generation. The only constraint that Nigeria is having is the cost of gas. We have over 2,000MW sitting. The over 2,000Mw should be treated, it is available. GenCos should not suffer for it . In line with the review NERC should capture the stranded capacity.”

    Some of the stakeholders urged the commission to privatize the Transmission Company of Nigeria (TCN) since it is obvious that the Federal Government which operates has proven inefficient.

    The Commissioner of Engineering Performance and Monitoring, Prof. Frank Okafor, however explained that the cost of funding the transmission network is too enormous for a private company to raise for the operation of the system.

    “It will be difficult to get investors that will fund the TCN,” he submitted.

    Besides, he said that it might be difficult to secure the right of way for the network since it transverse so many states of the federation. 

    According to him, government is borrowing from multilateral financial agencies to expand the grid since the amount of power delivery is not sufficient to raise the required revenue.

    The commission maintained that it has met with the TCN and DisCos in order to deliver the stranded power to consumers.

    Owing to the appreciation of stranded generation, NERC said that Minister of Power, Works and Housing, Babatunde Fashola has directed it to sell power to eligible customers. 

    NERC however informed the stakeholders that it has already got the go ahead to enact a regulation that will encourage willing seller and willing buyer of electricity. 

    NERC Vice President pointed out that the event was not for a tariff increase but for the commission to get stakeholders’ inputs on (the frequency of the review) how often the review should be carried out. 

    The stakeholders were also divided on whether the tariff should be reviewed bi-annually, monthly or yearly.

    NERC carries out a major review tariff review every five years and minor review every six months. 

    But speaking representative of Mainstream Energy, Solutions Limited, Musa Abba Bajoga, asked the commission to following the global practice to “do what is done universally.”

    The President Hotel Owners Association of Nigeria, Dr. Ezeh Udeh told the commission to consider a yearly review since hotel rates are not reviewed monthly and that any price that rises in the country hardly falls. 

    Network of Electricity Consumers Advocacy of Nigeria (NECAN), Tommy Akingbogun, told the commission not to use its rate to kill investors.