DisCos lose N30b monthly to energy theft, others

Electricity Distribution companies (DisCos) suffer N30billion revenue deficit monthly due to government’s fixed pricing per unit of electricity and theft, Ikeja Electric Plc said yesterday.

The company stated this at the maiden roundtable on the Nigerian Power Sector organised by Sahara Group Limited in Victoria Island, Lagos.

With The Nigerian Power Sector: Narratives for Transformation and Sustainability as theme, the event had in attendance representatives of all electricity value chains including consumers, distribution, transmission, generation companies and regulators.

Lamenting the challenges facing the sector, the Group Managing Director (GMD), Sahara Power, Kola Adesina said there was need to develop a purpose driven, credible and coherent framework to solve the problem.

He said: “We need to have a sense of coherence in the system, alignment of all the relevant stakeholders so that everybody knows what is happening on the other side and not the current blame game we seem to be having. If we all work together, most definitely, we can deliver a better result. I am certain we will have light in Nigeria. It will be steady, regular and affordable and that is what the consumers want.

“Customers want to turn on their switches at home and see light. It is not metering that would make that happen. Let us stop putting the horse first.

“What we should be looking at the enablers that will drive investment and make players credit worthy in the banks. At the moment, those enablers are not there. The power sector is largely foreign exchange driven. Have we asked what the cost of production per unit of electricity is and how much consumers are paying?

“The power sector is meant to encourage foreign investment, that is what electricity is meant to do anywhere in the world. But the enablers of electricity itself are not there. One of the numerous reasons government left the sector was the fact that they realised the efficiency required was not there. Government saw that if the private sector could come in with her own degree of efficiency, things are likely to improve. The investment we are making is predicated on certain fundamentals which need to be addressed.”

Earlier, the Managing Director, Transmission Company of Nigeria (TCN), Usman Mohammed, said efforts were on to upgrade transmission networks so that energies generated would get to the distribution companies without wastage.

To this end, Usman said $1.57billion has so far been invested in upgrading the transmission network, adding that they have achieved two out of four requirement for a steady grid.

He said: “As of December, the capacity of transmission was 7124 megawatts (Mw), which is the same with generation. If you look at the power pyramid, when generation is 7,000, transmission is supposed to be 14,000.

“That is why we have raised huge amount of money from several donors including World Bank, JICA and the African Development Bank to build the transmission network.

“So far, we have raised $1.57billion. Some of the monthly have already been utilised like that of World Bank. Some of the projects are in the finishing phase. We are implementing projects to put necessary flexibility required internationally, so that if any transformer goes out, it will not affect supply.

“What we are doing is to put capacity that would be able to dispatch all the generated power and ensure that in case of accident or problem with any of our equipment, it would not affect supply.

“We are currently rehabilitating all our substations and building new lines across the country. We are changing old cables and equipment. Look at Lagos, for instance, we are trying to close the loop. Though the Ajah-Egbin Transmission line supplies the whole of Lagos Island one of the lines had been out for five years now.

“So, we have awarded the contract recently and the second line is being rehabilitated to bring supply stability to the island. Still, we are working on closing the lope by building another 330KV line to serve the island. And this is what we are doing all over the country.

“Uninterrupted power supply is achievable in Nigeria. It is a matter of investment and purposeful leadership. If we have leadership at all spheres, we can do it. In transmission, we have done two of the four things we need to stabilise the grid. The other two, we are working on and would achieve it by the grace of God.

“We have achieved frequency control of 49.5 and 50.5 which have not been achieved in the last 20 years. We have also achieved significant investment in the network upgrading. What is remaining now is the spinning reserve and functional communication system that would enable the system operator to see everybody on the grid.”

In his submission, Lagos State Commissioner for Energy, Olawale Oluwo said TCN’s Eligible Customer  innovation was threatening the business of DisCos the most.

He said with the steps the government was taking towards generating 3000MWs from its Independent Power Plan (IPP), it would in the next five to 10 years, cut off national grid completely.

On why the state was yet to advertise expression of interest in its IPP project, Olowu said the government would do so by next month.

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