Discos may end up like NITEL if they don’t invest in new technologies – All On CEO

Dr. Wiebe Boer, the Chief Executive Officer of All On, an off-grid energy investment company which is focused on the Nigerian market and set up and funded by Shell, in a recent interview noted that the electricity distribution companies (Discos) may end up like NITEL if they don’t invest in technologies and customer engagement.

On alternatives to the country’s faltering national grid he said; “The two biggest opportunities right now are the solar home systems. It’s a retail consumer product and as long as they can get to the right price point, I think they will take over Nigeria. At this point in the entire market, there are only about 100,000 solar power systems deployed throughout Nigeria, which is a tiny fraction of the market potential. It’s a promising and big power alternative.”

“The other alternative is mini-grid, which is not yet common. Maybe 20 are in Nigeria. The mini-grids can generate up to 200 kilowatts and can serve an entire community, about 200 households and SMEs. You can provide reliable power using this and there have been stories of communities that were completely off-grid but have now been transformed through the mini-grids.”

On the distribution segment he said; “The Discos aren’t bankable because they’re not getting paid, so they owe a huge debt, hence they can’t invest in what is needed to improve their relationship with customers […] With the regulation in place now, with eligible customers, a Genco that is generating at full capacity but is not getting paid can actually choose to start distributing directly to the end users that were not properly served by the Discos.”

“If that’s what’s happening, together with the small scale distributed power producers, I think in the next three or four years, we will see a very different power sector in Nigeria than we do now. I also think if the Discos are ready to start investing in new technologies that are needed and in customer engagement, they may survive. But if they don’t, they may go the way of NITEL (Nigerian Telecommunications Limited).”

Source: The Punch

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