Electricity Market Operator Urges Stakeholders to End Blame Games in the Electricity Market.

The stakeholders in the Nigerian electricity industry have been called to put an end to blame games in the Nigerian Electricity Market (NEM), and take  appropriate actions within their various areas of responsibilities in order to build an efficient and sustainable electricity market that is beneficial to all stakeholders.

The Market Operator, Mr. Moshood Saleeman made the call at the stakeholders interactive forum with the theme ‘‘Liquidity and Infrastructure Challenges in NEM: Beyond the Blame Game’’, which took place in Abuja on Thursday, 18th May, 2017.

Mr. Saleeman explained that liquidity was key in an electricity market and regretted that over three years into privatised electricity market in Nigeria and over two years of operating in the Transitional Electricity Market (TEM), liquidity and infrastructure challenges were still holding the Market from growing to its potential. 

He commended the Federal Government for the various efforts at tackling liquidity challenges through facilitating the Nigerian Bulk Electricity Trader (NBET) as the off-taker in the market as well as the commencement to pay the verified MDA debts.

The market operator advised stakeholders in the electricity market that to enable them meet the need of end-users as well as the revenue recovery for the entire value-chain, they should work towards harnessing the huge un-utilised Generation capacity, accelerate completion of critical Transmission infrastructure projects, reinforcement and expansion of Distribution network and deployment of consumers metering.

The interim MD, TCN, Mr. Usman Gur Mohammed called on market participants to put in more efforts in order to tackle the liquidity problem in the power sector. He assured the stakeholders that the Market Operator was operating independently as TCN management does not interfere or influence her operations and activities.. According to him, the non- interference is to encourage MO to operate transparently for the good of the entire market.

Mr Mohammed  used the forum to announce that TCN under his watch would soon double the grid capacity, as the company has opened high level discussions with several state governments for the provision of land in different parts of our country for the installation of critical transmission projects for the evacuation of more power to the discos and the people. The TCN MD added that several multi-million dollar Transmission projects were part of the mix. He also submitted that the regional offices of TCN were being empowered to handle more projects and tasks that would bring in more efficiency and quality service delivery.

Speaking while welcoming guests at the forum, Head, Independent System Operation (ISO), Engr. Musa Gumel charged stakeholders to work together as a team to enable them come up with innovative solutions that would tackle liquidity problem in the Nigerian electricity sector.  He added that Management was upgrading staff  manpower to enable them operate the system more efficiently and minimise system collapses.

In the technical paper presented by the first Market Operator, titled; ‘The Problems of Low Liquidity in the Nigerian Electricity Industry’, Engr. Uzoma  Achinanya described the power sector liquidity problem as a critical underfunding of the sector to the extent that plants and equipment cannot be adequately maintained or efficiently operated. He further disclosed that the NEM liquidity problem was as a result of the liquidity gap between the revenue requirement of the market or expected revenue for power supplied and actual revenue available to the market.

He opined that to solve the liquidity problem, tariff should not be increased without adequate tariff study, and there should not be increase in generation capacity with drastic system loss reduction. He would rather have all market participants to be transparent and considerate for other players in the market by playing by the rules, so that it would be a win-win situation for all stakeholders and the nation at large.

At the end of the interactive forum a communique was issued and the some of the resolutions include: Gencos declared that they have the capacity to generate 8,500MW and called for improvement in Transmission and Distribution capacities to accommodate this level of generation. They also called for Centralization of market collection and appropriate disbursement based on the agreed percentages as well as the activation of their existing contracts with NBET and the declaration of eligible customers.

The communique also reported that the Discos called for the implementation of the last NERC approved tariff review for the end users, immediate payment of MDAs outstanding debts in order to improve liquidity in the market, holistic approach of addressing the sector challenges, not only the upstream. The Discos also called for legislative action or backing to address cases of electricity theft and delinquent customers through the introduction of special electricity courts which would have time limit to address disputes and issues of delinquent customers. Delinquent customers according to the stakeholders should be made to pay interest on their outstanding bills.

Interim Managing Director/CEO, TCN, Mr Usman Gur Mohammed addressing the workshop participants