· Discos list illiquidity, FX scarcity as factors hindering mass metering
· Shettima: mass meter manufacturing will help country address power challenges
· FG warns against power theft, says liquidity dependent on customers’ ability to pay
· Says licensees must meet renewable energy obligations
Emmanuel Addeh in Abuja, David-Chyddy Eleke in Awka and Oluchi Chibuzor in Lagos
The Nigerian Electricity Regulatory Commission (NERC) and stakeholders in the power sector have advocated for a dedicated financial institution that would cater only for the energy sector, while meeting the massive investment gap in the industry.
Panellists at the 14th edition of the 2023 PwC’s annual power and utilities roundtable made the call at an event held in Lagos, yesterday.
The call came as Vice President Kashim Shettima identified mass production of electricity meters as crucial in efforts by the federal government to address the challenge of power in the country. Shettima stated this yesterday at Oraifite, Ekwusigo Local Government Area of Anambra State, during the inauguration of an electric energy meter manufacturing factory.
Still on electricity, the federal government, yesterday, warned against electricity theft by consumers, insisting that the illiquidity challenge in the sector can only be solved when Nigerians pay for power consumed.
Speaking at the third edition of the annual workshop organised by the Power Correspondents Association of Nigeria (PCAN) in Abuja, Minister of Power, Adebayo Adelabu, stated that President Bola Tinubu was determined to provide reliable and regular supply of electricity to households and businesses in the country.
According to the panellists at the PwC forum, a dedicated financial institution that caters only for the energy sector would ensure that the newly amended Electricity Act 2023 achieves its key objectives and provides the investment needed to grow the economy through effective power generation, distribution and transmission.
On their part, the distribution companies stated that while the new Act required them to provide meters for consumers, illiquidity, unstable foreign exchange rates, and theft remained a challenge to their capacity to meet the requirement.
The theme for this year’s forum was, “The Electricity Act 2023: Powering Nigeria.”
Speaking as a member of the 2023 panellists, the Commissioner, Legal, Licensing and Compliance, NERC, Mr. Dafe Akpeneye, said the country should seek to have a dedicated financial institution for the power sector. Akpeneye said the country should seek a single law that covered the federation, like India.
He stated that the sector, being critical to the country, needed long-term investment, which the local banks could not provide.
According to Akpeneye, “This type of funding will require synergy and collaboration in a model that gives room for every stakeholder to operate where they have unique advantage.
“The country needs to build local capacity and have dedicated funding institutions to strategically provide funds for the sector.”
Explaining the modalities, he said, “The capital requirements to enter the grid are so expensive and investors want certainty of payment to come in.
“So we need to have a phased approach on how we do this and we also need to have a phased approach on the implementation of the Act itself.
“As I rightly said, since you cannot cover the grid, we are going to have dispute laws and that is an area of confusion itself.
“India is a better example for us to learn from. At India, the big states do it on their own, the small states form their regional grid. The position we find ourselves right now is that some states go on their own. When you want to go on your own, NERC is no longer responsible for your tariff.
“But for states that have not gone on their own, NERC is responsible. India has one single power law that covers everything we are trying to do now in our power sector.”
Earlier, in his keynote address, the Partner, West Africa Area, Energy, Utilities and Resource Leader, PwC, Pedro Omontuemhen, reiterated that investors in the country should be looking at synergy and collaboration in the areas they have comparative advantage.
Omontuemhen stressed that the country could not shy away from addressing the power poverty across the country if it must increase economic growth. He said the biggest challenge in Africa, particularly in Nigeria, was power poverty and not just having enough power.
He stated, “For a country with 200 million people to have power of 4,000 megawatts, that is a huge power deficit. It cannot meet our drive for economic growth. This requires an emergency and the issue is, how do we generate, transit and distribute enough power to meet our needs as a country?
“If Nigeria is going to develop or leapfrog, then we cannot run away from power generation, distribution and transmission.
“There is a huge need for investment in the sector that covers the entire value chain and we are hoping that electricity actors provide that enabling environment for people to bring in their hard earned money.”
One of the panellists, who is also Chief Executive Officer, Ikeja Electric Plc., Mrs. Folake Soetan, said energy theft had a direct effect on operators’ performance.
Soetan said there must be a link between the states and the federal government in the implementation of the Electricity Act 2023, to give private investors assurance that they would recoup their funds.
“So the states should see the Act as an opportunity to collaborate with players and ensure that the needed legal frameworks that will attract investors are in place,” Soetan added.
On why operators were not sufficiently providing meters to their customers, Soetan attributed the metering gap to inflation and FX shortage.
According to her, “The reality is that most of the meters are not manufactured locally, as some of them are assembled and there is an FX element. So, that impacts cost of the meter today and is quite difficult for meter asset providers to be able to replenish those meters at the cost we have today.”
Other stakeholders and members of the 2023 PwC roundtable asked the federal government to consider using palliative funds to bridge the metering gaps. They also called on the National Assembly to see provision of meters as constituency projects.
Shettima: Mass Meter Manufacturing Will Help FG Address Power Challenge
Vice President Kashim Shettima said mass production of electricity meters would help the federal government solve the problem of electricity in the country. Shettima stated this when he inaugurated an electric energy meter manufacturing factory in Oraifite, Ekwusigo Local Government Area of Anambra State.
The vice president also inaugurated other projects in the state, including a radio station, Ijele 93.1FM; housing units donated for widows by Sir Emeka Offor Foundation (SEOF), Touch-A-Life Housing Unit and Phase 3 of the Housing Scheme; and SEOF Social Investment Programme.
Inaugurating Advanced Energy Management Solutions, an electricity meter manufacturing company, Shettima said its operations would assist the federal government in efforts to address power challenge.
The vice president stated, “We commend this initiative as we commission the factory to the glory of God and for the use of humanity. This will help reduce the shortage gap of prepaid meters in the country.
“We believe that the establishment of the factory will help resolve the power supply challenges facing the country by addressing the critical issue of very high metering gap among consumers.
“It is also a direct response to the call by the federal government for local and foreign investors to invest in Nigeria, create jobs and stimulate economic activities all around the country.”
Earlier, Chief Executive Officer, Advanced Energy Management Solutions Limited (AEMSL), Okechukwu Onyejiuwa, said the factory had the capacity to produce 1.4 million meters annually. Onyejiuwa said the firm could produce Single Phase, Three Phase, and Maximum Demand (MD) meters.
He revealed that the factory would create about 500 direct jobs, comprising mainly engineers, technicians, as well as finance and administration professionals.
Onyejiuwa stated, “In addition to the direct jobs, we estimate that there will also be over 4,000 indirect jobs created by activities of this company.
“The operations of this factory will stimulate economic activities in the country, especially given the high-tech nature of the skills required for the manufacturing process.
“It will also conserve scarce foreign exchange through reduction in the cost of imported raw materials, developing local raw materials sources and the potential for export to other countries within Africa and other parts of the world in the near future.”
FG Warns Against Power Theft, Says Liquidity Dependent on Paying Customers
The federal government yesterday warned against the incessant theft of electricity by consumers in the country, stressing that the illiquidity challenges in the sector can only be solved when Nigerians pay for power consumed.
Speaking at the third edition of the annual workshop organised by PCAN in Abuja, Adelabu said Tinubu was determined to provide reliable and regular supply of electricity to households and businesses in the country.
The programme, with the theme, “Resolving Nigeria’s Power Crisis: The Implication of the Electricity Act 2023,” had in attendance players from the entire power supply value chain.
Adelabu explained that due to the president’s desire to provide regular supply of electricity across the country, he had liberalised the power sector through the enactment of the 2023 Electricity Act.
Adelabu, who was represented by Director, Transmission, at the Ministry of Power, Emmanuel Nosike, said the Act was a significant part of Nigeria’s energy roadmap, as it clearly signified the present administration’s commitment to the transformation of the power sector.
Adelabu stated, “Taking all the above into consideration, especially with the liberalisation of the sector, Nigerians will soon start to experience the objective that led to the Act, which is improved power supply across the country.
“On a final note, I would like to emphasise the role of the media in terms of communication and advocacy.
“For the sector to progress we must advocate against power theft, vandalism and educate consumers against sabotage.
“The financial liquidity in the NESI is dependent on customers paying for electricity consumed.”
The minister stated that the Electricity Act had liberalised electricity generation, transmission and distribution and now empowered states, organisations and even individuals to generate, transmit and distribute electricity.
He said under the Act, state governments could now issue licences to private investors to operate power plants and mini-grids within the states, while investors could also obtain licences for generation, transmission, system operations, trading, distribution and supply.
According to him, “The Act also encourages the integration of renewable energy technologies into the existing grid system while licensees are expected to meet renewable energy obligations as stipulated by NERC.
“Among others, the Act also introduced mechanism for incentives for investment in the sector. Such incentives include feed-in-tariffs, which guarantees a fixed price for renewable energy fed into the grid and tax incentives for investors.
“In order to ensure a level playing field for all players in the sector and prevent anti-competitive practices, the Act also provides clear guidelines for the licensing, monitoring and supervision for market participants.
“Furthermore, the Act guarantees assets protection by allowing investors to sell or transfer their undertakings in the event of revocation of licenses or compensation in the event of takeover of such undertakings.
“Therefore, when we consider the totality of the re-enacted electricity Act, it has changed the entire landscape of the power sector.”
Adelabu said the liberalisation of electricity generation, transmission, and distribution implied that everyone involved in the power sector value chain must contribute meaningfully to ensure the successes envisaged in the enactment of the Act.
The minister said a key part of the 2023 Electricity Act was the development of the Integrated National Electricity Policy and Strategic Implementation Plan. He stressed that the ministry was working with the National Council on Power (NCP) to develop and send the implementation strategy to the Federal Executive Council (FEC) for approval.
Adelabu promised to focus on solar energy in the North, mini hydro power plants in the Middle Belt and South-west, hybridised with solar, while the emphasis in the coastal states will be wind energy utilisation.
Earlier in his presentation, Chairman of PCAN, Mr. Obas Esiedesa, said the workshop, from inception three years ago, was intended to create a platform for building the capacity of journalists covering the power sector.
According to Esiedesa, the Electricity Act 2023 has prescribed far-reaching changes to how the sector has been governed in the past, especially the devolution of power to the states.
Head of Metering and Laboratory Services Department, Nigerian Electricity Management Services Agency (NEMSA), Gideon Fatumbi, who spoke on the need to have standard quality meters in the industry, said information obtained from meters could be used for energy budget planning and tracking.
Fatumbi listed the features of a good metering system to include electricity meter quality and accuracy, complying with the requirements and specifications of Nigeria Metering Code, and ability of the metering system to deal with several technical energy theft challenges.
Others who made presentations at the technical sessions included General Manager, Planning, Transmission Company of Nigeria (TCN) and Head, Commercial Department, Niger Delta Power Holding Company (NDPHC), Ajah Okoro.