Manufacturers Spent N76.7bn on Alternative Power

Manufacturers under the auspices of the Manufacturers Association of Nigeria(MAN), have lamented the effect of Nigeria’s energy crises on its activities, as it disclosed spending N76.7 billion in the half year 2022 to source alternative power.

The sector was negatively affected while the electricity industry wobble following the inability of Electricity Distribution Companies(DisCos) to sustain a steady supply.

MAN, in its latest report obtained by our correspondent, indicated that electricity supply to the industries from the national grid during the second half of the year 2022 declined marginally to 11 hours per day from 12 hours recorded in the preceding half.

However, the average number of outages per day stabilized at 4 times in the second half of 2022 as it was recorded for the first half of the year.

Irrefutably, the trends that power supply to the industry is still a huge challenge which accounts for a huge investment of manufacturers in self-energy generation.

Consequently, expenditure on alternative energy sources increased to N76.7 billion in the second half of 2022 from N45.04 billion recorded in the corresponding half of 2021; thus, indicating N31.66 billion or a 70 per cent increase over the period, the director general of MAN, Mr Segun Ajayi-Kadir, disclosed.

It also increased by N8.9 billion or 13 per cent when compared with N67.8 billion recorded in the preceding half. The expenditure was incurred on the procurement of diesel, gas, generators and spare parts, inverters and UPS, among others.

Proffering a solution, Ajayi-Kadir called on the government to develop and implement a roadmap for improved power supply focusing on off-grid solutions and independent power projects by the private sector to ensure an adequate supply of energy for production and also attract and expand investment.

In addition, the government should carry out further investment in the electricity value chain and commit to adding 10000MW to the current electricity distributed in the country, while also embracing and supporting significant development of energy mix and renewable: the country has huge for Solar and Wind.

The MAN also recommended the commission resuscitation of the existing national refineries to produce fuels locally; review the gas price for domestic consumption to be in tandem with the export price which is about $3.25 per cubic meter and promote energy efficiency and renewable energy deployment in industries and homes.

He said it would be valuable to incentivize more investment in gas aggregation to end gas flaring and optimize crude oil production based on OPEC quota and gas production to ramp up revenue now that hydrocarbon is still saleable.

Government, according to the DG, should review the current status of the four national refineries to determine their current state and commission the CHIYODA Group, the Japanese company that built the national refineries to rehabilitate them to resume domestic refining.

In addition, he said, it is important to review the Nigerian energy policy and ensure that available energy sources, particularly natural gas are optimally explored and exploited, creating a functional incentive to attract private sector investment in gas aggregation to end the current gas flaring.

To further balance the sector, there is a need to create incentives to resuscitate private sector investment in the petrochemical industry, improve the capital expenditure on the energy sector for greater public investment in energy development as well as carry out and utilize the outcome, Egypt’s energy development strategy, he noted.