States urged to establish independent power stations to address outage

By Kehinde Olatunji |   04 May 2021   |   4:08 am  

An expert in the power sector has applauded the move by Lagos State Government to create its independent electricity policy, urging other states to adopt the initiative.
   
The Commissioner for Energy and Mineral Resources, Olalere Odusote, said the step is a key driver for the social and economic development aspiration of the state as part of the government’s 30-year development plan (2021-2951).
 
Speaking with The Guardian, a retired employee of the defunct Power Holding Company of Nigeria (PHCN), Abraham Ewetumo, said the move by the state government was a welcome development and should be adopted by other states to address the teething power challenges in the country.
   


He, however, said that the Constitution must be amended to allow states and local governments to create and manage their electricity markets.
  
He said the states can only set up independent power plants (IPPs) and negotiate with Transmission Company of Nigeria (TCN) and Nigerian Bulk Energy Trader (NBET) to sell its electricity output.
  
Ewetumo added that the state governments would be better served if two or three jointly set up electricity boards to seek power generation, transmission and distribution businesses.
  
Ewetumo hinted that IPPs of other states apart from Lagos have collapsed and ceased operations because of insolvency.
 
“This is due to poor returns vis-a-vis the cost of operations of the power stations, majority of which are gas-fired turbines. Power generation, transmission and distribution are capital-intensive businesses with long-term yields. It is not easy to finance them with short-term loans from commercial banks. They are best financed by development banks whose tenures are long with low interests.”

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