2023: FG might pay N600bn as electricity subsidy – NERC

The federal government might have to pay N600 billion in electricity subsidies, the Chairman/CEO of the Nigerian Electricity Regulatory Commission (NERC), Sanusi Garba, has disclosed.

He disclosed this at the ministerial retreat on the Integrated National Electricity Policy and Strategic Implementation Plan on Tuesday in Abuja.

He added, “The Service-Based Tariff (SBT) was instrumental to the reduction of tariff subsidies but the financial burden of tariff subsidies from 2015-2022 stood at NGN2.8tn.”

He explained that the sector’s insufficient end-user tariffs, poor DisCo collections, and revenue shortfalls have served as a threat to investments and the sector’s viability.

The Minister of Power, Adebayo Adelabu in his submissions said there is a need to create another company from the Transmission Company of Nigeria (TCN) to strengthen its effectiveness in transmitting power from power generating companies to electricity distribution companies.

The Minister lamented that the use of ageing and dilapidated infrastructure by the TCN has made it unable to transmit enough power needed.

Decrying the dismal performance of TCN in the electricity supply industry, he noted that the only way out of the inefficiency is to balkanise it into two.

The restructuring, he believes, must synchronise with the evolving landscape of State Electricity Markets, addressing calls for the decentralisation of the national grid into regional grids interconnected by a new higher voltage national or super-grid.

He explained that the nation now generates over 98 percent of electricity through renewables as against the 70.5 percent generated last year.

”As of 2022, he said 70.5 percent of the nation’s grid electricity was generated by thermal plants, 27.3 percent from hydro, whilst solar and other power plants made up 2.2 percent, adding that the good news is that over 98 percent of the feedstock powering electricity generation in the country are transition or clean fuels.

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