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Regular supply impossible with low electricity tariff, says ex-NERC commissioner

Tariff

A former Commissioner, National Electricity Regulatory Company (NERC), Mr. Eyo Ekpo, has said that government’s decision to keep electricity tariffs low condemns Nigerians to perpetual dependence on “extremely expensive” backup generators as it starves the power sector of critical investment.

Ekpo said Nigerians will not have reliable supply of cheaper electricity from the national grid until investors see a tariff that can cover the cost of the investment required to provide it, adding that there is no shortage of electricity in Nigeria.

He made the assertion during the European Business Chamber (EuroCham Nigeria) Stakeholder Conference on “Gaining Traction in Power Sector Reforms”. The conference was organised to galvanize policy reforms that will unlock investment in Nigeria’s power sector and deliver stable electricity supply to Nigeria.

Nigeria’s current electricity generation stands at about 4,000 megawatts but the generating companies have an installed capacity of 13,000 megawatts. The transmission system has the capacity to move only between 5,000-7,000 megawatts (there are various estimates of the “wheeling capacity”) of electricity from the generating companies to the Distribution Companies (DISCOs).

A lawyer and energy policy specialist, Ekpo explained that Nigerian homes and businesses provide themselves 10 times more electricity through petrol and diesel generators than the country’s electric power companies supply them through the national grid.

Mr. Ekpo pointed out that the real problem with the power sector is that Nigeria is stuck with a power delivery model that is “extremely costly and inefficient.”
Nigerian homes and businesses produce 40,000 megawatts of electricity with diesel and petrol generators daily while they are supplied only about 4,000 megawatts through the national grid.

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