The Minister of Power, Adebayo Adelabu, voiced concerns about the direction of the country’s power sector, stating that privatisation might not have been the best approach and that commercialisation could have been a better alternative. He expressed these views during an interactive session with journalists in Abuja.
Adelabu also disclosed that investigations are underway to determine the legality of the extension of licenses for distribution companies (DisCos). He pointed out that the copy of the license held by the Ministry of Power was expected to expire in December.
In response to questions about potential electricity tariff increases, Adelabu clarified that such an increase is not immediately planned. He emphasized that the political situation in the country demands an improvement in the quality of power supply.
The minister raised concerns over the country’s heavy reliance on generators, noting that over 90% of the electricity generated, which ranges between 50-90 megawatts, comes from diesel and premium motor spirit (PMS) generators.
The privatisation of the power sector took place on November 1, 2013, with the Bureau of Public Enterprises overseeing the process, resulting in a $2.5 billion investment. However, the sector has faced challenges, and the expected growth in electricity generation has not been realized, with the average capacity remaining at around 4,000MW as of the present.
The 17 licenses that were granted to generation and distribution companies were scheduled to be renewed or revoked on November 1, 2023. However, the Nigerian Electricity Regulatory Commission (NERC) disclosed that these licenses were extended by five years. Adelabu clarified that the current government and NERC management were not responsible for the extension, and its legality is currently under investigation.
In light of the sector’s performance, Adelabu emphasized the need to review the performance agreements signed with the sector. He advocated for a new agreement, given the poor performance in the sector.
The minister outlined the government’s focus on off-grid solutions and addressing electricity transmission challenges. He also mentioned the upcoming addition of hydro power plants like Zungeru to the grid. The government is considering the prioritization of small hydro power plants that can be dispatched without relying on the national grid.
Adelabu stressed the importance of improving collection efficiency in the sector and called for a collective and collaborative approach to finding solutions for the power sector’s challenges.
