Experts in the electricity sector in Nigeria have advised the Generation Companies (GenCos) to take full control of the value chain for efficient service delivery.
They spoke during a panel session at the 10th Anniversary of the Association of Power Generation Companies (APGC) on Tuesday in Abuja.
According to them, the Distribution Companies (DisCos) and the Transmission Company of Nigeria (TCN) have not shown capacity to adequately invest on the network, consequently, constituting serious setback to the progress being made by the GenCos.
They also advocated the scrapping of the Nigerian Bulk Electricity Trading (NBET) plc to boost liquidity in the sector.
The panel session moderated by Eyo Ekpo deliberated on a topic: “Collaboration between GenCos and State Licensees (including SubCos) to procure power from/through NBET or GenCos.”
The Panelists comprising Ebipere Clark, Engr. Belije Madu, Olalere Odusote and Odion Omofonma, urged the GenCos to adopt the virtual integrated model used by the Dangote Group in the Cement and Petroleum industries to take total control of the power value chain.
This, they explained, would enable them to transmit, and distribute the quantum of electricity being wasted as a result of lack of investment in the sector, especially in the distribution value chain.
They encouraged the GenCos to also procure meters and directly collect revenue from the consumers for the electricity generated and distributed in order to keep the sector liquid.
Nigeria currently has about 10GW of stranded generation capacity, energy that the government said could power industries, create jobs, and even support electricity exports to neighbouring countries.
Commenting on the proposal, the Managing Director of the APGC, Dr. Joy Ogajji, said the experts should also understand the workability of the power sector.
“The power sector is like this tripod that is carrying your camera. One leg is generation. The other leg is transmission. The other one is distribution. So, if they are advising that generation companies should take over, what they are expecting is that generation companies should go to the national market or the state market and obtain licenses for generation, for transmission, and for distribution. Will that be possible? And if it will be possible, then policy documents and legislation have to be done from the national segment,” she said.
On scrapping of NBET, she said “the formation of NBET was pursuant to Section 8 of the Electric Power Sector Reform Act (EPSRA) 2005 as amended. NBET was formed as a Transitional Organisation to help the privatization of the power sector. As you can see, it is twelve years post privatization, so under normal circumstances, the reason for which NBET was formed has expired. And NBET was to provide guarantee and market liquidity. For the number of years it has been, the market has not been liquid, so you won’t blame them for saying that it should be scrapped. Because one, if they are scrapped, the cost of keeping them, salaries, office could be used for something else.
“However, NBET has come up with the idea that they want to be an exchange platform. The question is, is the exchange platform a change in nomenclature? Do they have money to buy and sell power or want to accumulate more debts? Even if they want to be an investment bank for the power sector, who will bankroll it?.”
