Based on the availability of adequate gas supply and subject to sufficient budgetary funding, the minister of power, works and housing, Babatunde Raji Fashola, has said that power supply could rise by 2,000 megawatts (mw) in the next 12 to 15 months.
He stated that the Ministry of Petroleum Resources will build some critical infrastructure, subject to budgetary funding, to transport gas to the power plant that will add the 2,000mw to grid supply in the coming months.
Disclosing this at his inaugural media briefing in Abuja, Fashola said that apart from the availability of gas infrastructure other issues like environmental concerns and appropriate pricing for gas have had negative impact on power supply.
He noted, however, that the recent review of gas from $1.30 per unit to $3.30, although still below the $4.00 International market price will help bridge the availability gap.
On transmission network, he said, “Today’s reality is that available power is slightly larger than the capacity which it can support else we will experience persistent system collapse. So government, through the Transmission Company of Nigeria (TCN), has identified a total of 142 critical projects of which 45 are at 50 per cent and above level of completion. Of this lot a further 22 projects can be completed within a year.
“With budgetary provision, government intends to aggressively pursue completion to increase the carrying capacity of the generation companies to the distribution companies from which the transmission carrying capacity must expand well ahead of the generating capacity that will take care of future expansion in power generation,” he said
On tariff, the minister said that the issue is a complex one because it relates more to citizen’s attitude while government has set the tariff regime through the Multi-year Tariff Order (MYTO). He noted that government intentions of attracting investors to the fledging market which underscores privatisation shows clear intention of attractive pricing of product to the investors. Tariff, he said, is the price of producing power which covers generation, gas purchase, transportation, transformers, staff costs, all disaggregated and charged per kilowatt hour, to make the business of power profitable.
He appealed to Nigerians for better understanding on this contentious matter, adding that it will assist government in maintaining its credibility with investors. Urging citizens not to oppose the implementation of the tariff order when it comes upstream, Fashola said that the surest way not to have stable electricity is to oppose the tariff plan.
While restating government’s commitment to the power sector privatisation, Fashola reiterated the determination of government to continuously pursue a private sector led power sector while the government will continue to provide the enabling environment. He said that government has learnt from the experiences of countries like Brazil, South Africa, India, and Mexico, and that he has resolved to overcome the teething challenges in the sector.
While promising increased government spending with a view to improving transmission network and availability of gas supply to generation companies, he assured of an enhanced regulatory capacity through the Nigerian Electricity Regulatory Commission (NERC). On the need to pay up the backlog of bills and ensure regular payment forthwith, he said that under his watch the ministry will see to the prompt payment of outstanding bills to distribution companies.
“Our ministry intends set the pace at the federal level and I hope that state governors, heads of agency, the national and states assemblies, military, police and other security agencies will ensure prompt payment of all their electricity bills,” the minister stated.
On electricity subsidy for poor rural dwellers, Fashola said, “Can this economy absorb all of that? Will it work better if everybody begins to pay for what they use? Those are tough choices but they have to be made,” he said.