Electricity market liquidity worsens as remittance from DISCOs drops 30 per cent
Despite the declaration of the contract-based Transitional Electricity Market (TEM) almost two years ago, indiscipline and lack of compliance by operators have worsened the sector’s woes, leading to liquidity challenges and low funds to expand critical infrastructure.
This disclosure was made at a stakeholders’ workshop in Abuja, yesterday, where the Transmission Company of Nigeria (TCN) also lamented that remittance of the nation’s electricity distribution companies had dropped to 30 per cent.
While not absolving any of the market participants of blame in the current quagmire, the TCN noted that the 30 per cent remittance level from the DISCOs was a threat to the stability of the sector.
Acting Executive Director (Market Operation) in the Independent System Operation (ISO), a business unit of the TCN, Moshood Saleeman, said cause of the liquidity challenge in the sector was the inability of stakeholders to comply with rules of engagement, as required by documents of the industry.
He also spoke of non-compliance with various contractual obligations by contracting parties. “No stakeholder in the industry today is stainless in this regard. We all know the areas of our non-compliance with the contractual agreements that we violate and the very consequence of inactions. Know that Section 71 (11) of the Act and market rules requires that all licensees and participants shall comply with the provisions of the market. The rule binds all persons who are registered with the market operator as participants or applicant participants.”