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Nigeria’s power sector faces renewed concerns as blackouts occur due to gas shortage
Nigerian power plants are experiencing blackouts in some areas as a result of a scarcity of gas, raising new worries about the ongoing issues plaguing the country’s electricity industry.
The Nigerian Federal Government and the Transmission Company of Nigeria have attributed the recent decline in the country’s energy supply to gas shortages, according to a story published by Obasanjo News24 over the weekend.
A few months ago, the government also attributed the decreased supply of energy to distribution businesses by Niger Delta Power Holding Company (NDPHC) to a scarcity of gas.
26 hydroelectric and gas-fired power facilities located across the country supply all of Nigeria’s electricity.
For a population of more than 200 million, Nigeria’s available power generation capacity has varied between 3,000MW and 5,000MW since the sector was privatised in 2013.
The Nigerian power Regulatory Commission’s most recent figures show that despite spending N3.348 trillion on power subsidies, ten years after the sector was privatised, it has not improved.
This is in line with the nation’s 2024 intentions to spend an additional N1.6 trillion on electricity subsidies.
Nigeria’s power industry is plagued by a lack of investment, the enforcement of energy policies, regulatory uncertainties, gas supply, transmission system bottlenecks, and notable planning deficits in the power sector in recent years, despite the country’s large spending on the sector.
According to NERC’s third quarter 2023 report, the nation’s national grid is still facing serious challenges due to gas limitations.
According to Gbenga Komolafe, Chief Executive Officer of NUPRC, this development persists despite the nation’s gas reserves of 208.83 trillion cubic feet, or 33% of all of Africa’s gas reserves of 620TCF.
Similar to other industries in Nigeria, the electricity sector faces a variety of obstacles to expansion.
Bolaji Tunji, special adviser to Minister of Power Adebayo Adelabu on strategic communication and media relations, indicated exclusively to Obasanjo News24 on Monday that the federal government has taken action to address the issue of gas constraints for GenCos.
He claims that in order to address the issues, including paying off debts due to GenCos, the government has begun involving stakeholders.
“The Minister is making every effort to find a solution, including paying off debts owing to value chain partners such as Generation Companies.
He told Obasanjo News24, “I can assure you that the Minister is tackling the problem of gas shortage to generation plants.”
Joy Ogaji, the Managing Director and Executive Secretary of the Association of Power Generation Companies, or APGC, told Obasanjo News24 that she was not aware of any federal government involvement with GenCos to address the gas scarcity problem.
Ogaji pointed out that the Nigerian Electricity Supply Industry, or NESI, may have been impacted by the government’s actions to address the gas shortage situation.
She pointed out that the country’s power sector problem has a bright side in the form of a strong contractual system between the government and GenCos, with bankable guarantees and full payment from off-takers.
He speculated, “It’s possible they are working with the GenCos under a strict contractual arrangement with bankable guarantees and complete payment from off-takers.”
The Nigerian Consumer Protection Network’s president, Kunle Olubiyo, criticised the government’s explanation for the recent decline in electricity delivery.
It is his opinion that the power industry is experiencing a liquidity crisis.
“It’s a liquidity problem; the lack of petrol isn’t the cause, in my opinion. As I have already stated, if we want to attain efficiency, the government must cease providing subsidies for electricity in the power industry.
He said to Obasanjo News24, “Electricity subsidies payment is made to GenCos and Electricity Distribution Companies for services they do not offer to Nigerians.”