On Tuesday May 19, the Senate urged the federal government to suspend the planned electricity tariff increase, which was to take effect in July, citing hardships caused by the coronavirus pandemic.
The senate’s resolution came as a backdrop to the adoption of a motion, sponsored by Sen. Gabriel Suswam (PDP Benue) on Power Sector Recovery Plan and Impact of the COVID-19 pandemic.
Suswam, while leading a debate on the general principles of the bill, stated that stable and uninterrupted power supply was a critical factor in the management of COVID-19 patients at isolation and treatment centres nationwide.
Citing that uninterrupted electricity was also key in the proposed upgrade of health facilities and in the manufacturing sector of the economy.
According to Suswam, if the negative impact of COVID-19 on the sector continues without any emergency financial intervention from the Federal Government, Distribution Companies (DisCos), may not be able to meet the demand of the electricity market.
This would also negatively affect the financial obligation of Generating Companies (GenCos) and gas to power distributors.
The senate called on the government, through the Federal Ministry of Finance to include the electric power sector in the disbursement of the proposed N1.7 trillion COVID-19 Intervention Fund.
It also urged the government to consider additional tariff support to reduce the effect of shock over a fixed period, to allow the Transmission Company of Nigeria and DisCos to access funds.
Access to these funds would help operators to implement their performance improvement investments that would support increased tariffs to certain classes of customers, especially during the pandemic.
The Senate President, Alhaji Ahmad Lawan, revealed that the DisCos had no capacity at the moment to supply power to Nigerians.
Lawan noted that GenCos also had their own challenges in generating electricity, adding that it was not advisable to continue giving money to the GenCos.
“The way it is, I think there is a need to review this privatisation and see what has really happened because something is certainly not right,” Lawan stated.
This prompted the senate to call on its power committee to further investigate all interventions by the government in the power sector since its privatisation to date. It also stated that the activities of all market participants within the sector be investigated and reported back in four weeks. The senate, thereafter, adjoined its plenary to June 2.
Unreliable power supply is a major problem in Nigeria’s economic growth. The International Monetary fund (IMF) says that lack of access to reliable electricity costs Nigeria an estimated $29 billion a year.
However, Nigerians have provided an alternative source of electricity using generators. Many individuals, households and organizations now depend largely on fossil-fueled generators regardless of the environmental and health risk that comes with it.
Data shows that Nigerians spend an estimated $14 billion a year on small scale generators. This makes solar energy a better option as it can be connected to a country’s electricity grid or run off grid at a cheaper rate.
Based on research by the International Renewable Energy Agency, solar has become cheaper than the fossil fuel alternatives. Therefore, it is advisable that the Nigerian government dives into using solar energy.
Building solar units in small chunks and adding more capacity with time makes solar based power generation ideal for plugging the gaps in Nigeria’s energy requirement.
Solar energy is the most technically feasible and cost effective solution to the challenge of providing electricity to Nigeria’s 80 million population living without it. It can also help in reducing the cost of doing business in Nigeria.