Nigeria’s Power Minister Seeks Gas Solution After National Blackout

Adebayo Adelabu plans to collaborate with the petroleum ministry to resolve the gas shortage and the liquidity crisis in the power sector.

by Motoni Olodun

Nigeria’s Minister of Power, Adebayo Adelabu, has announced plans to collaborate with the Ministry of Petroleum Resources to boost gas supply to generation companies (GENCOs) for power generation. This comes after the national grid collapsed on Sunday, leaving many Nigerians without electricity.

The grid failure was caused by a low supply of gas to GENCOs, which account for 80% of the country’s power generation, according to the minister. He said that the gas shortage was due to contractual issues between gas suppliers and GENCOs, as well as the liquidity crisis in the power sector.

To resolve these challenges, the minister said he would form a committee involving all stakeholders in the power sector to develop recommendations for improving gas supply, payment of debts, and overall sector stability. He also said he would initiate discussions with the Minister of State for Petroleum Resources, Timipre Sylva, to prioritize gas to power.

“Our commitment is unwavering in addressing the challenges affecting power supply. We understand the impact on citizens, and our goal is to swiftly resolve the issues of gas supply, indebtedness, and overall sector stability. Your patience is appreciated as we work collaboratively towards a brighter, more reliable energy future for Nigeria,” he said in a statement.

The minister also said that the country had not decided whether power was a social service or a commercialized product. He said that if power was a social service, the government should fully subsidize it and pay the debts owed to gas suppliers through the Nigerian Bulk Electricity Trading (NBET) company. However, if power was a commercialized product, the tariff should reflect the cost of production and ensure liquidity in the sector.

The national grid collapse has highlighted the need for Nigeria to diversify its power sources and reduce its dependence on gas. According to the International Energy Agency, Nigeria has the potential to generate over 200,000 megawatts (MW) of electricity from renewable sources, such as solar, wind, hydro, and biomass. However, the country currently has less than 13,000 MW of installed capacity, of which only about 5,000 MW is available on average.

Several initiatives are underway to increase the share of renewable energy in Nigeria’s power mix, such as the Solar Power Naija program, which aims to provide 5 million households with solar systems by 2023, and the Rural Electrification Agency, which is implementing mini-grid and off-grid projects across the country. These efforts could help improve access to electricity, especially in rural areas, where only 39% of the population has access, compared to 82% in urban areas, according to the World Bank.

Nigeria’s power sector reform is also crucial for attracting private investment and improving efficiency and transparency. The government has taken steps to implement the Power Sector Recovery Programme, which was launched in 2017 in partnership with the World Bank. The program includes measures such as strengthening the regulatory framework, enhancing the operational and technical capabilities of the transmission and distribution companies, and addressing the governance and financial issues of the sector.

As Nigeria strives to overcome its power challenges, the minister’s plan to collaborate with the petroleum ministry could be a short-term solution to ease the gas supply constraints and restore electricity to millions of Nigerians. However, in the long term, the country will need to pursue a more sustainable and diversified energy strategy that can meet the growing demand and aspirations of its people.

Source: Business Day

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