A recent report has indicated that Nigeria loses about 50 percent of
its generation, transmission and distribution due to ageing
infrastructure.
In a document made available to Sweetcrude, the Coordinator,
Nigerian-German Energy Partnership, Dr. Jeremy Gaines, said: “No sector
in the world can operate with a loss rate of nearly 50 percent. Were
these losses only to be halved, there would be substantially more
revenue for the sector (Gencos, Discos), which could translate into
investments and less pressure on government to subsidise the
inefficiencies.”
He noted that overtime, the industry have suffered from lack of
investment in the power sector and massive losses from generation
output. Consequently, Nigeria needs to experience a robust development
in the power by tackling its ageing infrastructure and increase
generation capacity to complement the great demand from the rising
population.
His words: “First, we have witnessed a massive shortfall of
investment in power plants over the last 30 years, meaning that
population growth, and with it the need for electricity has far outpaced
supply.
“Second, many existing gas-fired and hydro power plants are in part
very old and therefore nearing the end of their service lives. And
finally, there are massive system losses.”
Highlighting the current cause of unstable power generation resulting
from generating losses in the country, he said: “The current cause of
unstable power is the sum of these losses, 11 percent from generation,
14 percent from transmission, and 22 percent from distribution.
“Were a strong system of sovereign guarantees in place, this would
encourage foreign direct investment in the sector – hitherto foreign
investors have been reluctant to commit to the fledgling privatised
sector for this reason.”
On how Nigeria can tackle the power challenges, he said: “The Federal
Government could approve financing to tackle the transmission losses
and monitor implementation by Transmission Company of Nigeria, TCN,
closely.
“Likewise, it could introduce meaningful fast sanctions to thwart the
theft of electricity and punish defaults on payment of electricity
bills, these realities everyone knows, but no one acts to stop them.
“It is important for the public to know that the existing power plant
fleet is old and will never generate anywhere near full capacity,
meaning many new power plants are required.
“It would be most beneficial if the new administration were to
publicly support the Ministry of Power in its drive to ensure the spread
of large-scale solar in the North. Only if power plants are built in
the North, and renewable power plants can be built quickly, will
electricity come to the North on any scale at all.
“At the same time it is critical that the new administration provides
sovereign guarantees to anchor private investments in new power plants,
be they driven by thermal feed stocks or renewable energy. Should it
not be able to do so itself, then it could officially request assistance
from the international community, specifically the EU, in obtaining
concessional loans for such power plants.
“The government’s efforts to support small-scale solar systems for
rural areas are very laudable but will not solve the main problem:
electricity for the country’s many conurbations,” he said.
Gaines further argued that Nigeria can resolve a significant portion
of its power issues through solar for the following reasons:
—Utility-scale solar power plants (50MW upwards) can generate a
substantial volume of electricity in the North, where there is no gas
infrastructure to enable gas power plants there but where power is
desperately needed.
—Solar power plants can be built much faster (from idea to completion maximum 3 years; for a coal-fired power plant, 6 years).
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