Saturday, 2nd December 2023

Stakeholders urge Adelabu to tackle value chain misalignment in power sector

By Waliat Musa
18 August 2023   |   4:04 am
As the new Minister of Power, Adebayo Adelabu, settles into his role, many stakeholders have urged him to address the issue of value chain misalignment and integrate all aspects of the sector.

Adebayo Adelabu

As the new Minister of Power, Adebayo Adelabu, settles into his role, many stakeholders have urged him to address the issue of value chain misalignment and integrate all aspects of the sector.

The issues range from power generation to transmission and distribution. The stakeholders said the areas must align to ensure a seamless and efficient supply.

The power sector in Nigeria has long been plagued by inefficiencies, with outages and interruptions being common occurrences, with significant impacts on businesses and households.

Stakeholders in the power sector have called on the new minister to implement policies and initiatives that will address misalignment. This includes measures such as the integration of power generation and transmission systems, the development of a robust distribution network and the implementation of smart grid technology to improve efficiency.

It should be recalled that President Bola Ahmed Tinubu, upon assuming office, pledged accessible and affordable electricity for Nigerians.

He highlighted the country’s power sector as one of his areas of focus, noting that power generation should nearly double, while transmission and distribution networks improve drastically even as he encouraged states to develop local sources as well.

Executive Director, Research and Advocacy of the Association of Nigerian Electricity Distributors (ANED), Sunday Oduntan, said the newly appointed minister should concentrate on aligning the value chain.

Oduntan said if the sector can generate 13,000 megawatts (MW), it must be able to transmit 13000MW and distribute the same 13,000 megawatts, which is technical alignment.

Speaking on the financial alignment, he said the sector must ensure the liquidity of the sector and good governance throughout the value chain for adequate electricity in the country.

“Once we face the technical and commercial alignment of the value chain, it is important to give us power, everything revolves around that, technical issues, financial issues, issues of the bankable sector, ensuring that liquidity crisis is taken care of,” he said.

Oduntan pointed out that aside from the issue of alignment, there should be collaboration and cooperation across the board, from government, policymakers, ministry, operators, and transmission companies to generation and distribution companies to ensure an efficient sector.

Electricity analyst, Lanre Elatuyi while speaking with The Guardian said there would be a major issue in the sector as the newly appointed minister does not have industry experience.

He said being a complex industry that even those with years of experience are still trying to understand, it may take him some time to understand the industry enough, hence he needs to surround himself with the right people.

Elatuyi pointed out that the Nigerian electricity market is at a crossroad with the recent Electricity Act signed and an ongoing attempt by the regulator to transit the market into wholesale competition with a mandate given to three DisCos to start initiating bilateral contracts with the GenCos.

“The sector is a regulated one so I expect the new minister to work closely with the regulator to drive the sector forward as it will be counterproductive to make any drastic decision without taking the regulator and all the market players along,

“The new law has mandated the Ministry of Power to come up with a new policy document for the industry, and it is not clear what happens next in the industry. The new electricity Act remains controversial with some provisions of the law not clearly defined,” he said.