By; AMOS TAUNA, Kaduna
The federal government in 2023 might have to pay N600bn as electricity subsidy, the Chairman/CEO of the Nigerian Electricity Regulatory Commission (NERC), Engr. Sanusi Garba, has disclosed.
He made the disclosure at the ministerial retreat on the Integrated National Electricity Policy and Strategic Implementation Plan on Tuesday in Abuja.
According to him, the increase is despite the government’s annual subsidy being reduced from N528bn in 2019 to N144bn in 2022.
He added, “the Service-Based Tariff (SBT) was instrumental to the reduction of tariff subsidies but the financial burden of tariff subsidies from 2015-2022 stood at NGN2.8tn.”
He explained that the sector’s insufficient end-user tariffs, poor DisCo collections, and revenue shortfalls, have served as a threat to investments and the sector’s viability.
The Minister of Power, Adebayo Adelabu, while speaking, said there is the need to create another company from the Transmission Company of Nigeria (TCN) to strengthen its effectiveness in transmitting power from generating companies to electricity distribution companies.
The minister lamented that the use of ageing and dilapidated infrastructure by the TCN has made it unable to transmit enough power needed, while also decrying the dismal performance of TCN in the electricity supply industry, as the way out of the inefficiency is to balkanise it into two.
He noted that in the Nigerian Electricity Supply Industry (NESI), the transmission sub-sector has been identified as a critical weak point in the value chain lately, a view widely shared, and to align with the Electricity Act, 2023 and the industry’s demands, it’s time to restructure the Transmission Company of Nigeria (TCN) into two entities: the Independent System Operator (ISO) and the Transmission Service Provider (TSP).
The restructuring, he believed must synchronise with the evolving landscape of State Electricity Markets, addressing calls for the decentralisation of the national grid into regional grids interconnected by a new higher voltage national or super-grid.
He explained that the nation now generates over 98 per cent of electricity through renewables as against the 70.5 per cent generated last year.
As of 2022, he stated that 70.5 per cent of the nation’s grid electricity was generated by thermal plants, 27.3 per cent from hydro, whilst solar and other power plants made up 2.2 per cent, adding that the good news is that over 98 per cent of the feedstock powering electricity generation in the country are transition or clean fuels, as Nigeria ramps up capacity to generate more electricity through renewable means such as solar, hydro, wind, bioenergy and others.
