LCCI calls for more off-grid solutions to check high energy costs, poor supply

Citing complaints by many businesses about high energy costs especially in relation to expenditure on diesel, as well as poor distribution of energy to consumers, the Lagos Chamber of Commerce and Industry (LCCI), has urged the Federal Government to deploy more off-grid power generation for improved access to electricity.

According to the Chamber, the power situation in Nigeria continues to pose challenges to business operators, despite generation, adding that the distribution end is still grappling with numerous challenges that limit its capacity to deliver power to end users.

LCCI President, Babatunde Ruwase, at a news conference in Lagos, to set agenda for the new government, said despite efforts by to improve power generation, distribution remains the weakest link in the energy chain.

He said: “We acknowledge the efforts by government to improve liquidity in the power supply chain, the drastic reduction in the debt owed to gas suppliers and the generating companies, improvement in power generation, and the enhancement of carrying capacity of the transmission grid. We are also aware that the Minister of Power is promoting alternative models to fix the problem at the distribution end.

“But a chain can only be as strong as its weakest link. The distribution end is still grappling with numerous challenges, which limit the capacity to deliver power to end users. The power situation continues to pose challenges to business operators.

“There are complaints across all sectors about high energy costs especially high expenditure on diesel. The situation has worsened with the increase in global crude oil price. Many businesses spend as much as 20-30 per cent of their total operating cost on generating power. We propose that policies and incentives be put in place to encourage decentralisation and more off grid solutions.

“The government should encourage and facilitate more off grid power generation for improved access to power. The Aba and Sura market power initiatives should be widely replicated across the country,” he explained.

Ruwase requested that the PEBEC secretariat should be further strengthened and the scope of its activities broadened to cover all sectors of the economy and all agencies of government that interface with the private sector, “We believe that the economy will be positively impacted if is this is done.”

He reiterated the need for government to address the gridlock in the Apapa axis of Lagos State, as it imposes unbearable cost on businesses.

“The cost to business is horrendous, and this includes high interest cost used for import transaction, high demurrage charges, high insurance premium of vessels coming to Nigeria, high shipping cost, low capacity utilisation due to problem of access to raw materials from the port as well as traffic congestion which has extended to the metropolis from the port,” he added.