FG: DisCos incapacitated, frustrating power supply

…says Nigeria generates 13,000MW, distributes 3,000MW

…mulls review of privatisation to usher in new investors

 

 

The Federal Government has, again, expressed frustration over the perennial epileptic power situation in Nigeria, declaring that the power distribution companies (DisCos) were incapable of distributing the quantum of electricity generated by the generation companies (GenCos) and frustrating the efforts of the government to make power available to the people.

Minister of Power, Saleh Mamman, disclosed this yesterday while briefing newsmen after the weekly Federal Executive Council (FEC) meeting held at the State House, Abuja.

Mamman said that whereas Nigeria generates as much as 13,000 megawatts of electricity, it can neither transmit nor distribute all.

According to him, the Transmission Company of Nigeria (TCN) can only transmit 7,000 megawatts while the distribution companies can only distribute 3,000 megawatts.

“We presented achievements right from the day we took oath of office to date. We want to tell Nigerians what we achieved in the value chains.

“Nigeria can generate up to 13,000 megawatts of electricity, but we cannot transmit all. So today (yesterday) we presented to the council the solution to the problem of our generation. It is mainly distribution.

“We can transmit, we can generate 13,000 megawatts; we transmit 7,000 megawatts, but can only distribute 3,000.

“There is a lot of work to be done in transmission companies and the government is now willing to take up the matter immediately,” he said.

He observed that given these shortfalls, there is a lot of work to be done before the dream of having steady power supply could be realised in Nigeria.

Mamman disclosed that government was determined to tackle this challenge of lack of capacity of the power distribution companies.

“One of the things I will tell you is that government has signed a Memorandum of Understanding (MoU) with the German firm, Siemens. They are to align between distribution and transmission and also generation, so that at the end of the day, if we generate 13,000 megawatts, transmission will take the whole 13,000 and the DisCos will distribute same. That way, everyone will have 24/7 electricity supply and Nigerians will be happy,” he said.

The minister said that government cannot continue to subsidize the power companies and was considering a review of the privatisation of the power companies to chart the best way forward in the power sector.

The minister disclosed that the Federal Government would soon decide the next line of actions based on the recommendations submitted to the Council on the issue.

“We just have to sit and see whether they are capable, have the technical knowhow because most of the problems we are having today is the loss – technical loss and commercial loss.

“They will give you light and may not collect your money or they will collect the money and pocket, or they may send light and you may not have good sub-station that may collect this power and distribute to customers.

“This has been our major problem and it is the responsibility of the DisCos to take care of that end.

“What they (DisCos) are doing is that they collect 3,000 megawatts and pay for only 1,000 megawatts, that is 15 per cent of what they are collecting. So, government is the one completing the payment. So we cannot continue like that. So if they are ready to continue, fine. But if they are not ready to continue, maybe they should give way to whoever that is ready to come and invest.

“So, we are asking government to review and see if they are capable. But if they are not capable, they should give way,” he said.

On how the government was addressing the debts between DisCos and GenCos as well as those between GenCos and gas producers, he said government had adopted the principle of willing buyer, willing seller in the business relationship in the sector.

“You know there is ardent capacity of generated electricity that we cannot pick at all. You can imagine we are only paying them 15 per cent out of 100. So, where do we take the remaining 85 per cent? Even if Nigeria Bulk Electricity Trading (NBET) Plc. is collecting 100 per cent, gas alone is taking 60 per cent, only 15 per cent is used for their overheads.

“So, if they cannot work outside the agreement with the NBET, you can see how they are struggling to get their money back. NBET buys electricity from DisCos, supplies to GenCos and collect money from DisCos and pay the GenCos, that is why we have the gaps and that is why we have to do something to correct these gaps,” the minister said.

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