SPEECH DELIVERED BY THE PERMANENT SECRETARY

SPEECH DELIVERED BY THE PERMANENT SECRETARY, FEDERAL MINISTRY OF POWER WORKS AND HOUSING, POWER, AT THE KICK OFF MEETING OF THE LINE ROUTE AND ENVIRONMENTAL AND SOCIAL IMPACT ASSESSMENT STUDY FOR THE SECOND IKEJA WEST- SAKETE TRANSMISSION LINE

Protocols.

This project is in line with the commitment of the current administration of President Mohammed Buhari, to develop the electricity market in Nigeria and in West Africa.

Recent TCN achievements in terms of network and frequency stability should and the development of the West African Power Pool, the subject of today’s meeting, are important developments in fulfilment of that commitment.

As the power sector in Nigeria progresses, we are disposed to wheeling more electricity to our international customers. Our primary obligation however is to serve Nigerians; we therefore have to be able to justify our continued supply to international customers to continue to export power, and it is very difficult to persuade our countrymen when the international customers we want supply have not been paying their bills for electricity supply. It is therefore necessary that all outstanding bills are paid immediately, and payment mechanisms are quickly put in place to ensure bills are paid as and when due.

It is a fact that investment in the electricity sector must be sustained to grow. Time has passed when (for example, 2014-2016), available generation and the transmission system could not supply enough energy to Distribution load centers.

We currently have more power plants connected to the grid and if we combine all the energy they generate, it would add up to 7,000MW. On the other hand, if you add all the energy the Discos can take, it sums up to 4,600MW. This has been difficult to explain to Nigerians considering the fact that what they need is more than 7,000MW.

To satisfy that need, we need to improve investment in Discos. The industry regulator, NERC, is currently assessing the Distribution investment requirements. Meanwhile, TCN is not resting on its oars. TCN is implementing Transmission Rehabilitation and Expansion Strategy which has been endorsed by the FGN and several Donors. The Gencos on the other hand are also up scaling their production, they are investing heavily on output expansion. This implies enhanced capability to increase power to our international customers.

Restoration of 100MW from Afam is in commissioning. Afam Three Fast Power will add another 240MW by December 31, 2017. Work is also ongoing at various IPP projects: Azura 450MW, Delta (Transcoop) Power is expanding, Ethiope is coming on board etc.  Such as Okpai, Delta and Egbin, to further expand their generating capacity. Government is also investing in wind and solar energy. Zungeru Power Plant project is progressing towards completion in 2019. Government has approved the construction of the Mambilla Hydro Power plant, which would on completion generate 3050MW upon completion in 2023.

Generally, As Discos are making efforts to expand, TCN and Gencos are also expanding to stay ahead of the requirement.  This is where the regional market comes in. We may need the regional market to sustain our expansion drive.  Now that TCN and Gencos are ahead of Discos, we will ensure that it becomes a norm. For the power supply value chain to be sustained, the trading arrangement must be respected and adhered to.  For TCN, the only way it can continue to stay ahead financially is that the trading arrangements are viable so if WAPP/TCN builds the 2nd Ikeja West-Sekete 330kV DC and other WAPP back bones, they must be paid for wheeling the power, promptly.

The generators must also be paid for generating power. That is the only way the trading arrangement would work.  Trading arrangements are already captured in our Laws and Regulations, which is periodically reviewed to accommodate technological advancement, new policies and institutional corporations like WAPP. Moving forward they must be effectively operationalized.

Concerning proper contracts for electricity consumption by CEB and Nigelec, current policy is to migrate the current supply to power purchase agreements with Nigerian Bulk Electricity Trading (NBET), while encouraging bilateral contracts with available generators and wheeling contracts with TCN for expanded supply. Contracts protect you from negligent or incompetent default in supply from your contracted generator. Contracts also protect your contracted generator from payment default.

I expect this meeting to move the Government’s commitment to develop the electricity market in Nigeria and in West Africa an important step forward.

Thank you

Louis O. N. Edozien

Permanent Secretary

Federal Ministry of Power, Works and Housing (Power)

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