Minister Claims, 50% of electricity generated not paid for

Minister Claims, 50% of electricity generated not paid for
Minister of Power Adebayo Adelabu

The Minister of Power, Adebayo Adelabu, has revealed that there is a significant N1.6trn shortfall in wholesale tariffs, with an industry Aggregate Technical, Commercial, and Collection (ATC&C) losses of 48 per cent, indicating that nearly half of the electricity generated is not paid for due to technical issues, theft, and inefficiencies in billing and collection processes.

This revelation comes amid debate on cost reflective tariff, electricity subsidy and disruptions in the sector in terms of service delivery. Adelabu underscored a significant obstacle, pointing out that the non-cost  reflective tariff is impeding distribution companies (DisCos) in achieving revenue goals and making investment to reduce ATC&C losses

He noted that the recent power disruptions across Nigeria stem from the inability of major players in the Nigerian Electricity Supply Industry (NESI) to settle old and current debts, causing a broken system where Gas Companies (GasCos) withhold gas supply from Generating Companies (GenCOs).

The minister further stated that, in partnership with the Ministry of Finance, Budget and Economic Planning, and the office of the Special Adviser on Energy to the President, they are proactively tackling the significant unpaid debts owed to both GenCos and gas suppliers, which involves a strategic approach, combining cash injections and assured debt instruments.

“Investments in upgrading aging infrastructure, expanding capacity, and deploying advanced technologies through the Siemens-backed Presidential Power Initiative (PPI) are underway. Several power generation projects, including the completion of the 700MW Zungeru Hydro Electricity Power Plant in Niger State, are progressing. Financing arrangements for the 40MW Kashimbila Hydro Power Plant in Taraba state are being finalized. We’re reviving 26 small and mediumsized hydro plants with solar hybridisation and completing a 20MW Wind/Solar hybrid power plant in Katsina state,” he said.

Also, the minister mentioned that initiatives are underway to boost the operational capability of NIPP power plants within the Niger Delta Power Holding Company, aiming for at least 50 per cent capacity. 

Adelabu noted that prioritising the acceleration of vital power projects such as the Siemens Project to improve transmission capacity, is a priority with ongoing discussions with two Chinese firms for EPC+F super grid projects crucial for offering failover and backup capacity to the National grid.

“Initiatives to modernise and strengthen existing transmission infrastructure, including upgrading substations and power lines, are in progress. Projects for reconductoring aging transmission power lines are being initiated for enhanced efficiency and reliability. Intervention projects funded by multilateral development partners, such as the World Bank, AfDB, and JICA, are expedited to address critical transmission challenges.” 

Additionally fair and competitive regulation efforts have resulted in significant fines for non-compliant DISCOs and refunds to over-billed customers, bolstering reliability and resilience in our electricity supply infrastructure. We’re committed to improving communication and navigating challenges together to deliver reliable and accessible electricity to every corner of the nation,” he said.