THE electricity supply subsector lacks quality and dependable data, the Executive Secretary, Association of Power Generation Companies (APGC), Dr. Joy Ogaji has said.
Ogaji, who spoke with The Nation on telephone, she said data was necessary to determine distribution, transmission, and generation infrastructure growth requirements.
She said the state of the market determines whether generation capacity should increase or not.
She said: “Again, the market was faced with financial, operational, construction, market, macroeconomic, contract and regulatory risks. Given that decisions about investments in power generating capacity depended on expected returns and costs, the illiquid state of the industry in addition to the fact that plants were performing below optimum, does not encourage capacity utilisation.
“In addition, there was little or no emphasis on data, as nothing depended on it. Investments for the growth of the generation sub-sector did not depend on the returns from the distribution sub-sector.”
She identified load rejection as the new problem in the industry, instead of more power generation.
She proffered solution to the problem. “Enable efficient regulation, monitor and evaluation, guide the development of efficiency and profitability requirements, enable true customer-demographics and bankable a necessary factor in tariff disaggregation, which is questionable.
‘’Enable the distribution companies (DisCos) and its partners meter asset providers (MAP) to meter all the customers given their inability to account for their customers and lack of financial resources, enable the DisCos conduct a technical analysis/audit of all infrastructure to determine a bankable technical loss factor, a key input for the determination of ATC&C loss (aggregate technical, commercial, and collection loss).
“Provide a source to verify, validate the lack of transparency and reliability issues with DisCos independent data validation. Investments to improve data quality and adequacy in all subsectors of the industry, with the priority being the distribution subsector for obvious reasons will solve a number of issues inhibiting the growth of the sector, especially the inability of the DisCos to make capital investments.”
Ogaji, therefore, advised stakeholders to maximise capacity utilisation to achieve low power generation costs and address the excess capacities.
According to her, capacity utilisation is used to measure efficiency. Average production costs tend to fall as output rises–so higher utilisation can reduce unit costs, bringing about a more competitive market which makes plants financially viable, she added.
‘’Utilising what is existing to get the most out of what is available, which means consuming what is available and recovering unavailable capacities, about 13,000megawatts (Mw) calls for critical evaluation of some market determinants,’’ she said.
On why the country is in crisis, she traced the problem to privatisation. Prior to privatisation, she said, investments for generation growth did not depend on the returns from the distribution sub-sector.
Authored By: Ambrose Nnaji
SOURCE: THE NATION