The Minister of Power, Adebayo Adelabu, is pushing for the pricing of gas utilised by the electricity Generation Companies (GenCos) in Naira to allow better management of the foreign currency-related inflationary trends in the sector.
The minister faulted the country’s current pricing of gas utilised by GenCos in US dollars, noting that that was the major issue in Nigeria’s power sector.
Speaking on Tuesday at a ongoing three-day ministerial retreat in Abuja, Adelabu said the pricing of gas utilised by GenCos in Dollars affects the pricing of electricity to end-users due to foreign exchange volatility.
“A hugely volatile variable that significantly affects the pricing of electricity to end-users. A more preferable option is to ensure that the gas utilised by the GenCos is traded in Naira to better manage the foreign currency-related inflationary trends that challenge the faithful application of the Multi-Year Tariff Order (MYTO) methodology,” he said.
The development comes barely a week after GenCos warned that they may not be able to sustain current electricity supply levels following the payment of only 28.3 per cent of an invoice for power supplied to the national grid by the Nigerian Bulk Electricity Trading Plc in the September payment cycle.
“The good news here is that over 98 per cent of the feedstock powering electricity generation in the country are transition or clean fuels, as Nigeria ramps up its capacity to generate more electricity through renewable means such as solar, hydro, wind, bioenergy and others,” he said.
Adelabu said the ministry would like to see more utility-scale solar power plants by 2030, which brings added responsibility for investments in generation and grid stability to address the variability that transmission of renewable energy-generated power over long distances brings.
“This brings with it the need for distributed generation power systems from renewable energy-driven power plants, that are localised around clustered communities and embedded or captive areas while at the same time stabilising our national grid and or deploying super-grids or regional grids that can transmit generated power over long distances with minimal losses.
“We need our investors, financiers and NESI value chain players to dimension the opportunities and electricity sector alignment with Nigeria’s Energy Transition Plan to ensure we meet our energy transition aspirations,” he stated.
