FG to Approve New National Electricity Policy by September

.Adelabu decries 10 power plants operating below 10% capacity

Peter Uzoho

The federal government will in September this year approve the new National Electricity Policy and Strategic Implementation Plan (NEPSIP) which is currently at the final stage of its documentation for onward presentation to the Federal Executive Council (FEC).

Minister of Power, Adebayo Adelabu, disclosed this yesterday in Lagos at the BusinessDay energy conference, with the theme, ‘Powering Nigeria’s Energy Future: Addressing Infrastructural Challenges for Sustainable Energy Development’.

He lamented that 10 power plants in Nigeria were operating below 10 per cent capacity, attributing it to the infrastructural challenges in the sector.

To ensure the alignment and enhancement of the power sector’s policy and regulatory framework, the minister said that the government has commenced the development of a comprehensive framework for the nation’s electricity sector to support innovation, research, and development in the sector and chart a sustainable path forward in Nigeria’s electricity industry.

“The government believes that a supportive policy and regulatory environment are essential for sustainable energy development and the government is committed to creating policies that encourage investment, foster innovation, and ensure fair competition in the energy sector,” he stated.

According to him, the electricity sector in the country has undergone significant reforms, transitioning from a state-owned, vertically integrated system to a predominantly privately owned unbundled network.

However, Adelabu noted that the challenges persist, including aging infrastructure and insufficient investment in renewable energy, outdated power plants, inadequate transmission and distribution networks, and frequent power outages.

He expressed surprise at the underutilisation of the facilities, which he said have the potential to generate significantly more electricity.

Adelabu identified two key factors limiting power generation including low gas supply and unpaid debts, explaining that gas shortages prevent plants from running at full capacity, while unpaid debts owed to generation companies create liquidity issues.

According to him, the federal government is committed to both enhancing current generating assets and investing in new power plants in a move to address the country’s generation capacity.

“Our focus is on harnessing the rich diversity of our natural resources, from hydro to solar and beyond. Recently, generation capacity to the grid has been expanded with the addition of a 700MW newly commissioned Zungeru hydropower plant.

“We have also secured Presidential approval to defray legacy debts to gas companies to allow efficient gas supply to the power sector going forward and a payment mechanism to address Generation Companies debts to ensure necessary maintenance is resolved and evacuation capacity optimisation.

“With this effort, we aim to not only increase our generation capacity but also improve the efficiency and reliability of our power supply,” Adelabu explained. 

He added that the government had set an ambitious target to generate about 30,000 megawatts of electricity by 2030 with renewable energy contributing 30 per cent to Nigeria’s energy mix.

The minister further said the insufficient power generation in Nigeria was also due to outdated power plants, underinvestment in new generation infrastructure, and over-reliance on fossil fuels such as gas/steam and diesel.

On the issue of metering, Adelabu said the government has put in place the required framework to enable an injection of 1.5 million meters into the power sector through the World Bank Distribution Support Recovery Programme.

He added, “The Presidential Metering Initiative will ensure an additional 2 million meters will be procured annually for five years. This will ensure accurate billing, reducing revenue loss and improving cash flow for a more liquid power sector.

“We are beginning to see some progress from the outcome of the government’s initiative in the last one year. However, we will not relent until we have a resilient and efficient electricity sector that meets the needs of all Nigerians.”