Power sector loses N24bn monthly to diesel generator market

February 12th, 2018

By Obas Esiedesa

Privately owned electricity generators are consuming 300 million litres of diesel monthly, thereby depriving the Nigerian Electricity Supply Industry (NESI) N24 billion revenue monthly, the Federal Government has said.

The government noted that the diesel generator market which industries, hotels and other heavy electricity users have embraced as alternatives to public power has resulted in the revenue loss.

The Minister of Power, Works and Housing, Mr. Babatunde Fashola who spoke at this montha��s edition of the monthly power sector stakeholdersa�� meeting in Abuja on Monday, explained that the government was making efforts to ensure that up to 2000 megawatts (MW) of stranded power in the system were transmitted and distributed to target consumers.

To this end, Fashola who was represented by the Minister of State for Power, Works and Housing II, Mr. Suleiman Hassan, disclosed that the government has scheduled a meetingA�on TuesdayA�with the Manufacturers Association of Nigeria (MAN), to find a solution to the stranded power.

He said: a�?Many of them use diesel. Diesel importation has been declining over the last two years. Many are reporting that they ran their generators for noticeably few hours. This is progress. However, Nigerians still consume about 300 million litres of diesel every month and most of this is used to power generators.

a�?About 75 per cent is imported, putting pressure on scarce foreign exchange. Assuming 40 per cent of the consumption is used for power generation at an average of price of N200 per litre, electricity industry is losing N24 billion every month largely to imported energya�?,

The Minister explained that a�?there is about 2,000MW of electricity generating capacity that is unutilised. Therefore, the challenge of the moment before the industry is how to deliver the unutilised capacity to consumers who are willing to pay for it and are already paying dearly for alternatives.

a�?Problems like this require creative solutions and we dona��t have any time to waste. The N701 billion intervention program is a creative solution that appears to be having the desired effect for stabilising the gas and generation end of the electricity industry.a�?

He explained further that a�?the eligible customer regulation and the meter service provider regulation are already subjects of detailed discussions and NERC regulatory action.

a�?The eligible customer regulation allows large consumers to buy their power directly from Gencos and then sign with TCN and Discos to have the power delivered to them. To plan an orderly win-win implementation of this policy, the ministry is hosting a discussion with the Manufacturers Association of Nigeria, and other interested large consumers of the policyA�on Tuesday,a�? he explained.

Earlier, while welcoming participants, the Managing Director/CEO of Transmission Company of Nigeria (TCN) which hosted the meeting, Mr. Usman Gur Mohammed disclosed that wheeling capacity of the company currently stood at 7,1124MW.

Mohammed said TCN has concluded plans to procure high capacity conductors to upgrade most of the 132/33KV substations where line limitation has curtailed the utilization of transformer capacities in various substations.

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