Power Minister Plans Cost-reflective Tariffs to Boost Sector

 Power Minister Plans Cost-reflective Tariffs to Boost Sector

Adebayo Adelabu, the Minister of Power, has said that the government is developing a cost-reflective electricity tariff system to boost liquidity in the power sector.

The minister said on Monday while emphasising the commitment to prioritise electricity supply, assured that the federal government would safeguard vulnerable consumers by subsidizing any anticipated shortfall.

Various power sector operators attribute the sector’s liquidity challenges to their inability to align electricity tariffs with current economic conditions. Adelabu, however, reaffirmed the ministry’s dedication to electricity supply, aligning it with President Bola Tinubu’s electricity turnaround agenda mentioned in the New Year message.

The minister acknowledged the sector’s challenges and highlighted the ministry’s efforts, along with agencies and Distribution Companies (Discos), during the yuletide to improve power supply, acknowledging positive advancements.

Adelabu stressed the importance of electricity in economic growth and mentioned that the initial three months of his tenure focused on diagnosis, stakeholder consultation, and strategy formulation.

Having established a well-documented implementation plan, Adelabu emphasised that the time has come for decisive action.

“Our primary focus is enhancing distribution and transmission infrastructure to minimise technical and commercial losses. The lack of liquidity continues to be a significant challenge in the electricity market.

“We are currently reviewing the implementation process of a cost-reflective tariff, while the government will continue to subsidise power supply to those that are vulnerable in our society,” he added.

Regarding the metering challenge, the minister emphasised the continued importance of closing the gap. He explained that various initiatives, such as World Bank programs and the Presidential Metering Initiatives, are underway and expected to gain momentum soon.

Adelabu said that the ministry will address distribution infrastructure issues by providing transformers to communities without imposing financial burdens on citizens.

Also, he emphasised the ongoing commitment to rural electrification, with plans for solar-powered mini/microgrids and street lights. Collaboration with Discos and state electricity boards will be maintained to align with local needs.

In addition, the minister highlighted efforts to enhance transmission infrastructure. The Presidential Power Initiative, also known as the Siemens Project, has been reactivated to strengthen the national grid and minimize technical losses.

“We will also be implementing the Eastern and Western super grid projects to strengthen the grid and increase electricity supply to demand centres in the country.

“The Transmission Company of Nigeria (TCN) will be reconstituted in the short term, separating transmission services from system and market operations in the first quarter of this year.

“In the medium to long term the transmission grid will be separated into regional grids to enable effective management.

“Generating at installed capacity is a goal for government-owned plants, while private companies are encouraged to invest further. Off-grid and distributed generation, utilising renewables, will be a focal point, solar PV plants, small hydro plants, and wind farms will be strategically deployed,” Adelabu stated.

On power theft, the minister said tackling power theft and vandalism remains very paramount.

“This national responsibility requires joint efforts to protect our assets. The ministry has informed the National Security Adviser (NSA) of recorded cases, and collective action is essential to eliminate these setbacks,” the minister said.

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