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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