Having been compelled to embrace the use of the diesel generator as an alternative electric supply by heavy electric consumers to their homes and operational premeses, Nigeria’s power sector loses =N=24 billion monthly to the market,the federa government has revealed.
Speaking on Monday, the Minister of Power, Works and Housing, Mr. Babatunde Fashola, who was represented at the February 2018 edition of the monthly power sector operators’ meeting at Katampe in Abuja by the Minister of State for Power, Works and Housing, Mr. Suleiman Hassan, explained that on the average, 300 million litres of diesel were consumed monthly to power these generating sets.
Fashola stated this shortly after commissioning a 100 mega volt amp (MVA) transformer installed by a power firm — MBH Power Limited — for the Transmission Company of Nigeria (TCN) at its Katampe transmission substation. The high voltage transformer, which is expected to increase the transmission capacity of the substation by 48 megawatts (MW) was reportedly financed by the World Bank at the cost of N59.6 million.
The minister noted that the expenditure made on diesel consumption in Nigeria, acquisition and maintenance of the generators acounted for the huge loses to her grid power market.
He explained that the government was making efforts to ensure that up to 2,000 megawatts (MW) of stranded power in the system was transmitted and distributed to target consumers who need them the most but do not have that much of power yet.
He said: “Many of them use diesel. Diesel importation has been declining over the last two years. Many are reporting that they ran their generators for noticeably few hours. This is progress. However, Nigerians still consume about 300 million litres of diesel every month and most of this is used to power generators.
“About 75 per cent is imported, putting pressure on scarce foreign exchange. Assuming 40 per cent of the consumption is used for power generation at an average price of N200 per litre, electricity industry is losing N24 billion every month largely to imported energy.”
He further stated: “At the same time, there is about 2,000MW of electricity generating capacity that is unutilised. Therefore, the challenge of the moment before the industry is how to deliver the unutilised capacity to consumers who are willing to pay for it and are already paying dearly for alternatives.
“Problems like this require creative solutions and we don’t have any time to waste. The N701 billion intervention program is a creative solution that appears to be having the desired effect for stabilising the gas and generation end of the electricity industry.”
He said government has scheduled a meeting this week with the Manufacturers Association of Nigeria (MAN) to try and find the best ways to implement the eligible customers regulation, which the Nigerian Electricity Regulatory Commission (NERC) recently made.
According to Fashola, “The eligible customer regulation and the meter service provider regulation are already subjects of detailed discussions and NERC regulatory action.