By July 2024, the federal government intends to transfer ownership of the five electricity Distribution Companies (DisCos) currently managed by banks and Asset Management Company (AMCON) to technical power operators. Adebayo Adelabu, minister of power, shared this information in Abuja while hosting the Senate Committee on Power for an oversight visit at the ministry. The government had in 2022, collaborated with Fidelity Bank and AMCON to step in and rescue Port Harcourt Electricity Distribution Company (PHED), Kano Electricity Distribution Company (KEDCO), Benin Electricity Distribution Company (BEDC), Ibadan Electricity Distribution Company (IBEDC), and Kaduna Electric in order to prevent them from going bankrupt and for various other reasons.
This government decision was taken as a result of the ongoing unsatisfactory performance, labelling it as a hindrance to the Nigerian Electricity Supply Industry (NESI). The minister mentioned plans to urge the Nigerian Electricity Regulatory Commission (NERC) to invalidate licenses of underperforming companies and potentially replace the management of the DisCos to address the issue. There is currently a plan in place to close the metering gap within the next four to five years. He revealed that the Federal Government had previously allocated $200 million to a company called Messr Zigglass to provide three million metres with no positive outcome yet.
Certain operators have depleted DisCos resources acquired.
He stated that President Ahmed Tinubu has instructed for the cancellation of the contract adding that the money for this project is from an initial funding of ₦100 billion and ₦75 billion. Adelabu attributed problems within the sector to unfinished projects and called on the committee to authorize funds for finishing more than 120 projects spread throughout the nation. During his speech, Isah Jibrin, a committee member, pointed out that certain operators have depleted the resources of the DisCos they acquired in 2013. He emphasized the necessity of holding the operators accountable for restoring the assets to their original condition prior to the handover.
Speaking, Enyinnaya Abaribe, head of the Senate Committee on Power, promised to prioritize a higher budget allocation for the power sector to address various issues. He also mentioned that the Senate plans to look into the recent increase in electricity prices, with a scheduled investigation on the 29th of April. During her speech, Nafisat Ali, the Executive Director of the Independent System Operator (ISO) at Transmission Company of Nigeria PLC (TCN), highlighted the numerous obstacles that are currently affecting the nation’s power sector. These challenges are causing disruptions in service delivery and contributing to the frequent breakdown of the national grid.
Reasons for grid collapse are attributed to all stakeholders.
Nafisat reported that there had been 105 instances of grid collapse in the nation between 2015 and April 2024. She emphasized that grid collapse is a frequent problem that arises whenever there is a vulnerability in any part of the power sector. Additionally, Nafisat pointed out that despite the power shortage in the country, the DisCos’ continue to refuse to accept load. The reasons for power outage in Nigeria are attributed to all stakeholders, including generation companies, transmission, and distribution. Generation companies are facing challenges such as insufficient gas supply, ineffective coordination between plants and gas pipelines, and low generation availability.
Various factors identified to be contributing to grid collapse within the transmission value chain, include insufficient operating reserve, voltage support issues, unreliable SCADA systems, vandalism, critical infrastructure failures, redundancies in transmission lines, and communication failures. Additionally, she highlighted vulnerabilities within distribution companies, including inadequate distribution networks, violations in load allocation, and poor visibility into their networks. Customers may encounter interruptions in their electricity supply due to a variety of factors, including reliability concerns, network security incidents, and failures in the transmission/distribution network.
Related Article: Non-performing DisCos will be sanctioned – FG
In order to ensure a dependable power system, it is essential to have sufficient capacity in electricity generation, demand response, and network capacity to meet the needs of consumers. Investment in all types of capacity must be sufficient, along with proper operational decisions, to maintain a balance between supply and demand at all times. Additionally, reserves should be included as a buffer to ensure the balance between supply and demand is maintained. With this, maintaining equilibrium between the real-time demand and supply is made possible, ensuring stability amidst any unforeseen disruptions to the system.
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