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The Federal Government has been advised to stop further interference in the activities of the power sector if the industry must move forward.
Chief Executive Officer (CEO) of Century Power Generation Limited and Nestoil Executive Director, Dr Chukwueloka Umeh, stated this during a webinar media interaction with the theme ‘The Dilemma of Electricity Regulation in Nigeria’ in Lagos at the weekend.
The firm is currently developing a 1500MW gas-fired plant in Okija, Anambra State being developed in phases, including the first phase of the 495MW open cycle plant.
Umeh regretted that the inability of the Federal Government to allow free-market operation of willing buyers and willing sellers interface remained a major disincentive for the industry.
He said a situation whereby the government is still interested in fixing the price for gas producers and determines tariff for Discos will not encourage the required investment required to grow the power sector.
The power expert explained that once gas and electricity tariff is not right, investments in additional power plants cannot happen because lenders would not be willing to provide the finance required to kick start the project. ‘‘For instance, if you are to build a new gas processing plant to fire a 495MW power plant, you will need to invest at least about $250 million to make it work. This is just for the gas processing facility, besides the pipelines needed to transport gas to the power generating plants. This entire infrastructure according to him, requires investment which can only come from revenue collected from consumers.
Regrettably, he said Discos are battling huge collection losses occasioned by energy theft which in some cases is about 60 per cent, an indication that they are only able to collect about 40 per cent of the cost of electricity distributed.