A former Commissioner, National Electricity Regulatory Company (NERC) has said that there is no shortage of electricity in Nigeria but the power sector lacks a power delivery model.
Mr Eyo Ekpo made this assertion during the European Business Chamber (EuroCham Nigeria) Stakeholder Conference on “Gaining Traction in Power Sector Reforms.”
The lawyer and energy policy specialist explained that Nigerian homes and businesses provide themselves 10 times more electricity through petrol and diesel generators than the country’s electric power companies supply them through the national grid, thus noting that the real problem with the power sector is that country is stuck with a power delivery model that is extremely costly and inefficient.
“Nigerian homes and businesses produce 40,000 megawatts of electricity with diesel and petrol generators daily while they are supplied only about 4,000 megawatts through the national grid.”
Ekpo likened this to “burning money” because of the N40 per kilowatt per hour difference between the cost of self-generated power (about N130 per kilowatt-hour) and grid power (N90 per kilowatt-hour).
He calculated that Nigerians “waste” N12 trillion every year, considerably higher than the national budget, by self-provision of power with backup generators rather than being supplied from the national grid.
Ekpo criticised the decision of the government to hold down power tariffs, saying that “Nigerians want a reliable supply of electricity through the national grid, Nigerians do not want low tariffs for grid-supplied power.”
He explained that the government’s decision to keep power tariffs low condemns Nigerians to perpetual dependence on “extremely expensive” backup generators as it starves the power sector of critical investment. Nigerians will not have a reliable supply of cheaper electricity from the national grid until investors see a tariff that can cover the cost of the investment required to provide it.
The EuroCham conference was organised to galvanize policy reforms that will unlock investment in Nigeria’s power sector and deliver a stable electricity supply to Nigeria.
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