Sanusi Garba, the chairman and chief executive officer of the Nigerian power Regulatory Commission (NERC), has revealed that the federal government may be required to pay N600 billion in power subsidies.
He made this revelation on Tuesday in Abuja at the ministerial retreat on the Integrated National Electricity Policy and Strategic Implementation Plan.
“The Service-Based Tariff (SBT) was instrumental in reducing tariff subsidies,” he said, “but from 2015 to 2022, the financial burden of tariff subsidies remained at NGN2.8tn.”
He clarified that the industry has faced threats to investments and its sustainability due to low end-user pricing, inadequate DisCo collections, and revenue deficits.
In his remarks, the Minister of Power, Adebayo Adelabu, stated that in order to increase the Transmission entity of Nigeria’s (TCN) efficiency in transferring power from power producing businesses to distribution firms, another entity must be established.
The Minister bemoaned the TCN’s inability to transfer the necessary amount of power due to its usage of outdated and decaying infrastructure.
Criticising TCN’s appalling performance in the power supply sector, he pointed out that splitting it in two is the only way to overcome its inefficiencies.
He feels that the reorganisation has to be in line with how the State Electricity Markets are changing and address proposals to decentralise the national grid into smaller regional networks connected by a new, higher voltage national grid, sometimes known as a super-grid.
He clarified that, compared to 70.5 percent produced the previous year, the country now generates almost 98 percent of its power from renewable sources.
According to him, as of 2022, 70.5 percent of the country’s grid electricity was produced by thermal plants, 27.3 percent by hydropower, and 2.2 percent by solar and other power plants. The good news is that over 98 percent of the feedstock used to generate electricity in the nation is made up of transition or clean fuels.
