Electricity distribution companies in the country have said the power sector will not work properly without the alignment of the value chain.
The Association of National Electricity Distributors, the umbrella body for the Discos, said there was a need for commercial and technical alignment in the sector.
The Executive Secretary, ANED, Mr Sunday Oduntan, in a telephone interview with our correspondent on Tuesday, said, “We have said many times that the power sector reform process is a journey and it is a long one. Resolving the issues in the power sector require alignment of the value chain.
“Our stand is that there is a need for collaboration, cooperation and alignment. We need commercial alignment and technical alignment.”
According to him, commercial alignment means that there has to be appropriate pricing of the product.
“That is a mechanism that will spur investment along the entire value chain, ultimately resulting in the injection of efficiency and increased power supply,” he said.
Oduntan said Technical alignment means that the respective capacities of gas supply, generation, transmission and distribution must be in sync.
He said, “The so-called stranded generation capacity is due largely to gas constraint. Gas must be available to enable the generation companies to generate to the optimum level; what they generate must be transmitted fully, and what is transmitted must be distributed fully. For that to happen, a lot of investments must be made along the value chain.”
According to the ANED spokesman, any money or intervention given to any part of the value chain without the alignment is only a quick fix that will just take us back to square one eventually.
He said, “When you do not align the value chain, you end up causing more problems long term. The alignment is a major issue and if you don’t solve that issue, there is no way the value chain will work properly.
“Let us all concentrate more on solutions in the interest of the nation. You cannot be blaming transmission, for instance, without thinking of generation and distribution.”
Oduntan added, “If Transmission Company of Nigeria is transmitting 7,000 megawatts, for instance, and we know that Discos have distribution capacity of 6,288MW. So, that means Discos cannot distribute more than 6,288.
“The day 7,000MW is transmitted to them, they will be distributing less than what has been transmitted. That is a problem. But I know for sure that as at today, TCN cannot transmit more than 5,000MW.”