Power sector: Osinbajo supports recapitalization of DisCos
Vice President, Prof Yemi Osinbajo has said a substantial change of strategy is necessary’ in the power sector following the performance of the electricity Distribution Companies (DisCos).
Osinbajo who bemoaned the DISCOS’ inability to distribute available grid power to consumers, said the distribution capacity in the 11 Discos “are significantly low.”
He spoke on Thursday at the commissioning of the new Abeokuta 2x60MVA 132/33 kilovolt (kV) substation and associated transmission lines in Abeokuta, the Ogun State capital built by the Niger Delta Power Holding Company (NDPHC).
This is coming four months to the performance review of the electricity DisCos. The government had said it would conduct a final review of the fiveyear performance agreement with the DisCos by December 31, 2019.
The Vice President regretted that despite the efforts of the Federal government at improving power generation in the country, the infrastructure of the DisCos cannot deliver government’s promises of uninterrupted power supply.
Osinbajo stressed the urgent need for the recapitalization of DisCos to enable them build more infrastructure that would take the excess power generated for distribution.
His words: “In the past few years, resolving the power supply problem has been the top priority of the federal government of Nigeria. But there is so much that still needs be done for us to get there.
“Today, we have about 13,427 megawatts (MW) of installed capacity and an available capacity of about 8,332MW. The distribution capacity in the 11 DisCos are significantly low, hovering around 4,000MW on the average with the pick of about 4,500MW.
“Despite the availability of about 8,000MW generation and 7,000MW transmission capacity, the lack of DisCos infrastructure to absorb and deliver power to end users as largely restricted power supply to an average of about 4,000MW and even sometimes falling below 4,000MW.
“It is evident that despite all the efforts that has been put into trying to expand the national grid that the infrastructure on ground today cannot deliver on the government’s promises for industrial and domestic use.
“A substantial change of strategy is needed. In recapitalising the DisCos, they have to simply come up with more resources one way or the other. Part of the recapitalisation process is the Siemens electrification programme,” Osinbajo explained.
He said the idea of the Siemens electrification programme is to deploy financing for technology on commercial term agreed with transmission and distribution companies in partnership with the German government and Siemens to one, increase transmission and distribution capacity.
“To enable power delivering of at least 7,000MW to consumers. And to eliminate all the bottlenecks in transmission and distribution to enable full utilisation of the entire power generated.”
He, however, reiterated the government’s commitment at ensuring adequate power supply to every nook and cranny of the country, saying “Power supply is the lifeblood of any economy and we are committed to ensuring that power supply is adequate at everywhere.”
The Vice President also said about 670 megawatts (MW) of power will be added to the national grid before the end of the year. He listed the additional power generation source to include Gbarain 115MW, Kashimbilla 40MW, Afam 240, Gurara 40MW, Dadinkowa 20MW and Kaduna 215MW, stressing that in the long term, several solar power plants are expected on stream.
Osinbajo said the grid already has the capacity to transmit 7,000MW, an increase from 5,000MW in 2015 stressing that the nation electricity generation plants now have about 13,427MW installed capacity and available capacity of about 8,342MW.
He said it was achieved through the efforts of government and private sector partners in the rehabilitation and commissioning of turbines in Shiroro, Egbin, Delta Power, Sapele and Gbarain.
On the Meter Asset Providers (MAPs) regulation of 2018 which he said was a government’s intervention, he said over 250,000 applications for metering have been received and processed by the DisCos to date.
The figure is expected to quadruple by the end of 2019 and double again by the end of 2020, largely closing the current metering gap of about 5.3 million consumers.
In his remarks, Governor Dapo Abiodun described the project as a major leap and a big development toward the Next Level Agenda of the BuhariOsinbajo administration.
He said the project will provide improved electricity to Abeokuta, and the Ota axis, which is a major industrial zone of our dear State.
The Managing Director of NDPHC, Mr. Chiedu Ugbo lamented the massive load rejection of power generated by the DisCos due to lack of capacity.
He further lamented that the substations like the one commissioned might be “stranded assets” with the DisCos’ inability to distribute more than their capacity.
Mr Ugbo noted that since May 2015, about 30 NIPP transmission projects inherited by the administration have been completed while over 70 distribution projects have been completed nationwide.
NDPHC’s contribution to transmission network has transformed the radial 330/132 kilovolt (kV) grid into a more robust grid system, he noted.