A PricewaterhouseCoopers report says high levels of losses could trigger disaster in Nigeria’s power sector if adequate steps are not taken to salvage the situation.

In Q1 2020, the power distribution network recorded a loss of 51.93 percent, according to data provided in the NERC Quarterly Report, Q1 2020.

In its report on annual power and utilities roundtable on Nigeria’s power sector, PricewaterhouseCoopers noted that the high levels of losses would render the power sector and its supply unviable if not corrected.

According to the report made available to Peoples Gazette, issues noted by the panel at the discussion included low remittances by market participants, network infrastructure challenges, non-cost reflective tariff, metering challenges, energy theft and low collection efficiency, funding challenges, policy and regulatory uncertainty, and the lack of reliable data across the electricity value chain.

The PwC report cited certain financial interventions made by the federal government, though the interventions have yet to meet the power sector’s expectations and yield results.

The panellists at the roundtable agreed that it was necessary to reach a middle ground with various participants and stakeholders in the electricity value chain.

The report highlighted the National Electric Power Policy of 2001 and the Electric Power Sector Reform Act, 2005. It also noted the dissolution of the National Electric Power Authority (NEPA) and the creation of the Power Holding Company of Nigeria (PHCN) as an initial holding company.

In 2020, Siemens signed an MOU with the German and federal government to improve Nigeria’s power supply. The project, divided into three phases, involves upgrading and expanding transmission and distribution infrastructure to improve access to affordable, efficient, and reliable electricity.

The first phase of the project is to decongest the current grid to allow existing capacity to get to customers. While the second phase is to expand the grid and add extra capacity bringing it up to 11 GW, and the third phase will be to ramp up generation to 25 GW and above.

The project is expected to be completed by 2025, though the current stage is held up due to COVID-19 concerns.

The report pointed out respect of contracts, predictability and transparency of the regulator, the creditworthiness of power off-takers, robust transmission and distribution network, and proper private sector participation in the control transmission as challenges the power sector faces.