The mechanics of the power sector in Nigeria flows through a value chain: The stakeholders across the value chain are Gas Suppliers, GenCos, @nbetnigeria, @TCN_NIGERIA and finally Discos.
We're in a crossroads here.
The inefficiency is not the failure of a single person per se
We're in a crossroads here.
The inefficiency is not the failure of a single person per se
The 6 Electricity Generating Companies (Gencos) generate power and sell it to the NBET, who later sells the power to the 11 Electricity Distribution Companies (Discos) - these are the @EKEDP, KEDC, AEDC, etc that y'all quarrel with.
The power is then carried by the Transmission Company of Nigeria (TCN @TCN_NIGERIA) and transmitted to the Discos who then distribute the power to final consumers - you and I.
The Gencos are 100% private companies; the @nbetnigeria and @TCN_NIGERIA are government-owned, while the Discos though are privatised but with the FG holding 40% stake (i.e., 60% of the shares had been sold to private operators)
As private companies the Gencos need 100% of the power they generate paid for by the Discos.
The @nbetnigeria purchases the electricity through Power Purchase Agreements (PPAs) and sells to the Discos through Vested Contractst
The @nbetnigeria purchases the electricity through Power Purchase Agreements (PPAs) and sells to the Discos through Vested Contractst
The Power Sector Reform implied a commercialisation of the Nigerian Electricity Supply Industry (NESI).
Gencos need that money to operate (maintenance, salaries, not to mention they pay 60% of all they earn to gas supplier, as they need Gas supplied to plants to generate power)
Gencos need that money to operate (maintenance, salaries, not to mention they pay 60% of all they earn to gas supplier, as they need Gas supplied to plants to generate power)
The @TCN_NIGERIA's job is to evacuate electric power generated by GenCos and wheel it to the DisCos. Heard of the 'National Grid' that collapsed more than 12 times last year despite over $1.6bn investment? That's their baby.
So, it's not necessarily the fault of GenCos or DisCos whenever there's a blackout. It could be @TCN_NIGERIA's national grid collapse.
The DisCos are at the heart of the NESI because they're in charge of distributing power to final consumers.
The DisCos are at the heart of the NESI because they're in charge of distributing power to final consumers.
Here's the problem: they must purchase the power they distribute, and must make returns for such, hence the need for a cost reflective tariff.
The sector is in crises because the DisCos realise only 20% of the funds they ought to realise for the power distributed.
The sector is in crises because the DisCos realise only 20% of the funds they ought to realise for the power distributed.
Yes, we have loopers, illegal consumers and people who pay stipends for power, etc. But that's not just the problem.
The DisCos cannot account for the money to pay the GenCos due to ' Aggregate Technical and Commercial Losees - AT&C Losses)
The DisCos cannot account for the money to pay the GenCos due to ' Aggregate Technical and Commercial Losees - AT&C Losses)
Technical losses are losses that occur within the distribution network due to cables, overhead lines, transformers & othr substation equipments.
Commercial losses arise from any illegal consumption of electrical energy, which is not correctly metered, billed and revenue collected
Commercial losses arise from any illegal consumption of electrical energy, which is not correctly metered, billed and revenue collected
Neither the @nbetnigeria nor the DisCos would cushion these losses. The DisCos must source that money to pay GenCos because aside their running cost, the GenCos owe 60% to the gas suppliers.
Where do they get that money from?
Where do they get that money from?
The FG has to come in and subsidise 80% for the DisCos, failing which they can't pay GenCos, and GenCos can't pay gas supplier.
The GenCos wld have to shutdown on their own or gas suppliers would terminate their supply.
Either of these would mean total blackout for 🇳🇬. God forbid
The GenCos wld have to shutdown on their own or gas suppliers would terminate their supply.
Either of these would mean total blackout for 🇳🇬. God forbid
The Nigerian Electricity Regulatory Communication (@NERCNG) is the overall regulator of the NESI in issues licenses, sets tariff methodology(determined by macroeconomic variables),regulates stakeholders, protects consumers, & generally superintendents over the affairs of the NESI
The @PowerMinNigeria is the supervising Minister in the NESI. The incumbent @PowerMinNigeria is @EngrSMamman.
So next time you feel tempted to water down the power sector into the inefficiency of a particular stakeholder, think twice because the NESI is a maze with various people having various mandates, and an interruption in one may likely throw interrupt power supply in the country.
It's a ticking time bomb, and people like me that know a little and are still learning about Nigeria's power sector know that there are enormous problems and we're far from our energy potentials
Prior to 2005, the entire electricity value chain (generation - transmission - distribution) was fused into a vertically-integrated state-owned monopoly - the popular NEPA. So you could safely blame NEPA for anything whatsoever as far as it relates to power supply
Under this regime, if you followed my earlier explanation, you'd clearly see that it's not necessarily the @PowerMinNigeria's fault when your Disco can't repair transformer, nor is it the DisCos fault when the national grid collapses.
The DisCos are yet to meter customers and customers can't pay estimated bills, hence the commerical losses.
Thank you for following🙏. I'm a young researcher in Energy & Natural Resources Law, with flair in electricity regulation
@threadreaderapp kindly unroll 🙏
