60m fuel generators render economy uncompetitive
Chineme Okafor in Abuja
The European Union (EU) and Germany may consider supporting the implementation of the Meter Assets Providers (MAP) programme and eligible customers regulation of the Nigerian Electricity Regulatory Commission (NERC).
MAP Regulations set to provide standard rules to encourage the development of independent and competitive metering services in the Nigeria Electricity Supply Industry (NESI), with the NERC saddled with the licencing of pre-qualified providers who will finance, install, maintain and where necessary, replace end-user electricity meters.
The revelation on EU and Germany’s possible support in the MAP programme is coming as an impact investment firm in the off grid electricity market, All On disclosed yesterday that with about 60 million petrol and diesel generators currently in use in Nigeria, the economy has become largely uncompetitive and unproductive.
The firm, with links to multinational oil company, Shell Petroleum Development Company (SPDC) also stated that about 70 per cent of Nigeria’s households or small businesses are currently off the national grid or affected by bad electricity supplies.
According to All On, these households or businesses rely on the estimated 60 million generators to power their operations and homes, adding that the development has created an unhealthy energy source.
In her presentation at an energy business dialogue organised in Abuja by the Nigerian Renewable Energy Roundtable (NiRER), an offshoot of the Nigerian Economic Summit Group (NESG), the Senior Investment Associate at All On, Mrs. Ujunwa Ojemeni, explained that 120 million people do not have access to electricity in Nigeria.
She added that 60 million fossil fuel generating sets were now filling the energy gap in the country.
Ojemeni stated that the 60 million generators in the country have negative consequences in the country’s economic productivity, competitiveness, employment and security.
She added that the country’s ability to guarantee food security, health, education and healthy environment for its citizens were impacted negatively by this huge number of fossil fuel generating sets in use.
According to her, All On is leveraging finance for the Nigerian off grid energy sector, and would be looking to drive long-lasting impact in the sector through its impact funding model.
At the parley, it emerged that the European Union (EU) and Germany may consider supporting the implementation of the Meter Assets Providers (MAP) scheme and eligible customers regulation of the Nigerian Electricity Regulatory Commission (NERC).
The likely EU, German support will be extended in their next round of financial support for the country’s power sector under the Nigerian Energy Support Programmme (NESP).
The NESP is however managed by the German cooperation agency – the Deutsche Gesellschaft fur Internationale Zusammenarbeit GmbH (GIZ), and has supported the power sector to grow its capacities and offerings for years now.
The Head of Unit for Sustainable Energy Access at the NESP, Mr. Carlos Louis-Miro, disclosed at the meeting that the NESP funded by EU and Germany could consider using parts of the €33 million budgeted in the next phase of the NESP to support the deployment of meters by electricity distribution companies (Discos) under the MAP scheme of the NERC, as well as the implementation of the eligible customers regime.
Louis-Miro, said that funding for the second phase of the NESP would come in the form of €20 million from the EU and €13 million from Germany, to support competitive procurement of large-scale solar power generation; stabilisation of the country’s distribution networks and improvement of the Discos’ business models.
He also said: “We may cover as well eligible customers, Meter Asset Provider; Independent Electricity Distribution Networks (IEDN)/franchising.”
According to him, the country’s Discos are currently bedeviled with technical and financial challenges.
“For many years, grid extended for political reasons using constituency funds. Some grids cannot be operated commercially by Discos at present MYTO. Discos do not have any incentive in investing in these loss-making grids.
“As a result, these grids suffer from unreliable supply. This situation will continue, unless alternatives are found,” he noted.