Federal Government on Tuesday unveiled plans for the establishment of 3 Megawatts of Solar Energy Sources across 25 states of the Federation.
Minister of Power, Adebayo Adelabu who disclosed this in Abuja, explained that the proposed facilities would be established in the North and South West geopolitical zones of the country.
He said: “We have investment proposals for establishing 3 gigawatts, which is 300 megawatts of solar energy source across the 25 States in the North and the South West. This is a novel and we believe it will go a long way to solve our power problem.”
While expressing optimism that the novel approach will go a long way to solve the endemic power problems bedevilling the country, the Minister encouraged Subnational Governments on the dire need to invest in power generation within their jurisdictions.
Adelabu also disclosed the Federal Government’s resolve to deploy hydro energy to the coastal cities.
While expressing concern that most of the infrastructure dates back to the 1960s, he affirmed that the country has witnessed incessant collapse of transmission which is caused by lack of adequate infrastructure.
He maintained that there is no single backup for the national grid, hence underscoring the urgent need for alternative sources in case of a collapse of the grid.
In his remarks, Vice President, Senator Kashim Shettima urged State Governments on the need to play a leading role in attracting investments into the electricity sector with a view to recapitalise distribution companies, and to ensure a steady flow of investments towards increasing electricity access.
The Vice President, who was represented by the Special Adviser to the President on Power, Engineer Sadiq Wanka, said the dialogue was timely as there is widespread recognition that the country is underperforming across all four pillars of providing electricity supply that is reliable, affordable, environmentally sustainable and available to all Nigerians.
“Indeed, by some estimates, less than 20% of Nigerians have access to reliable energy for more than 12 hours per day. 45% of Nigerians have no access to any form of electricity. As a result, households and industries have been dependent on self-generation that is both more expensive and more polluting.
“The Electricity Act 2023 that was passed by the National Assembly and signed into law by President Bola Ahmed Tinubu seeks to overhaul the structure of the Nigeria Electricity Supply Industry. It proposes a structure that promotes more competition and greater scope for tailoring power solutions to local needs while transitioning to a market structure that would attract much-needed investments and promote environmental sustainability.
“The wholesale structural shift that the Electricity Act 2023 (as amended) and the associated constitutional amendment usher in, means we need to double down on ensuring an orderly transition to the new national electricity market framework,” he said.
According to the Vice President, “Having the power to regulate electricity activities also means there is a need to build the capacity to ensure competent and independent regulators in each state market.
“It means states need to take a leading role in attracting investments to recapitalise distribution companies and to ensure a steady flow of investments towards increasing electricity access.
“While State Governments can now regulate all electricity value chain activities within their borders, these new powers come with non-trivial responsibilities.
‘Having the power to set tariff policy within state borders also comes with the responsibility of paying tariff shortfalls and subsidies that emanate from these policies. It comes with the responsibility of state governments to guarantee payments to the national wholesale electricity market.”
In his address, Speaker Tajudeen Abbas who acknowledged the present administration’s unwavering commitment and robust drive towards overhauling the power sector, applauded President Bola Tinubu for signing the Electricity Act (Amendment) Bill, 2024, which authorised states, companies, and individuals to generate, transmit and distribute electricity, barely a few weeks after his inauguration.
“As you know, our discussions at this forum are set against the backdrop of significant challenges and remarkable opportunities within our power sector. The government’s objective is clear – to foster a resilient, efficient, and sustainable power sector capable of supporting our nation’s ambitious economic and developmental goals.
“Historically, the Nigerian power sector has grappled with challenges that have stifled its growth and hampered its efficiency. These challenges include inadequate generation capacity, dilapidated infrastructure, frequent disruptions in power supply, and financial inefficiencies that have eroded the sector’s viability.
“Moreover, the inadequate metering and the consequent revenue losses have perpetuated a cycle of debt and underinvestment that has undermined the sector’s potential.
“As we navigate these challenges, we must foster collaborative efforts that leverage both public and private sector expertise and resources. This dialogue embodies such collaboration and is crucial in charting a forward path. The shift towards a multi-tier electricity market represents a strategic pivot in our approach to power sector reform.
“This model envisages a structured market segmentation that allows for differential pricing and service levels tailored to diverse consumer needs and capacities. It promises enhanced efficiency through competitive practices, encourages investment by delineating clear market segments, and improves reliability and service delivery across the board.
“It is noteworthy that key stakeholders have promoted the benefits of the system, including enhanced competition and efficiency as multiple players are allowed to operate within different tiers. This encourages competition, which can lead to better service delivery and innovation.
“Also, there is the likelihood of improved reliability and quality of service, especially for high-demand users willing to pay more, thus indirectly benefiting the standard service tiers through reduced load. Others have noted that investment incentives can be derived from the system. Clear segmentation allows for targeted investments in infrastructure that can cater to specific market demands and operational requirements, making investment decisions clearer and more predictable.
“However, this is just one side of the coin. Despite the much-touted benefits, the transition to a multi-tier market is challenging. These include regulatory complexities, the need for substantial capital investment, the risk of market segmentation leading to disparities in service quality, and resistance from different stakeholder groups due to changes in tariff structures.
“We must acknowledge that numerous stakeholders and industry experts have expressed concerns that the proposed increase in electricity tariffs could lead to significantly higher utility bills. This increase could reduce disposable income for consumers, escalate operational costs for businesses, and increase the prices of goods and services, disproportionately affecting low-income earners in Nigeria.
“Some experts argue that these changes might drive more individuals into poverty, especially as inflation and foreign exchange issues continue to strain households and businesses.
“Additionally, critical problems within the electricity value chain need to be addressed. Technical and commercial losses, which have not been effectively tackled, add inefficiencies that consumers are indirectly forced to cover, contributing to the cost recovery efforts. These losses amount to billions of naira.
“I would have expected that this forum and extensive consultations would have preceded the implementation of the new multi-tier electricity system. Having this consultation now appears to be an afterthought and goes contrary to the Electricity Act 2024, which mandates consultation with all relevant stakeholders in determining just and fair tariffs.
“Section 33 of the Electricity Act 2024 establishes the NERC as a public agency subject to the oversight responsibility of the National Assembly under Sections 80-88 of the Constitution.
“Section 34 of the Act specifically provides the function of the NERC to include ‘to ensure that the prices charged by the licensee are fair to consumers and are sufficient to allow licensees to finance their activities and to allow for reasonable profit for efficient operation’ and to ‘ensure that regulation is fair and balanced for customers, licensee, investors and other stakeholders’. I hope this forum allows all stakeholders to interrogate whether the new system meets the criteria outlined in the Act,” the Speaker noted.
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