A peep into Nigeria's near-comatose power sector

The Nigerian power sector is grappling with a huge gap between supply and demand.

Current power demand is estimated at 17,520 megawatts, but industry watchers say the country could do with a minimum of 40,000 megawatts.

According to the African Progress Report, more than 90 million, out of the 180 million Nigerians, have no access to electricity.

The report explains that 17 million Nigerians with no access to electricity live in the urban centres, while the other 73 million reside in rural areas.

The majority of the 90 million Nigerians above, observers note, were living in off-grid areas where electricity supply was not economical and may not be sustainable due to the high cost of installing the transmission infrastructures.

Even among the electrified areas, incessant blackouts have made the access to electricity meaningless. Numerous reasons are cited for the sorry scenario. that has caused many industries to relocate from Nigeria, besides occasioning an astronomical hike in prices of goods caused by the costly generator power.

Misery and resignation

Affirming the decayed nation’s power sector, President Muhammadu Buhari, in his inaugural speech on May 29, 2016, said: “No single cause can be identified to explain Nigerian’s poor economic performance over the years than the power situation.

“It is a national shame that an economy of 180 million generates only 4,000 megawatts and distributes even less."

He went on: “Continuous tinkering with the structures of power supply and distribution, and close on $20 billion expended since 1999, have only brought darkness, frustration, misery and resignation among Nigerians.

“We will not allow this to go on; careful studies are underway during this transition to identify the quickest, safest and most cost-effective way to bring light and relief to Nigerians.’’

The sentiments aptly capture the pathetic situation in the sector and the determination of the Buhari administration to tackle the challenges.

From the inception of the present administration, some analysts have expressed concern about how long it would take it to mitigate the power sector challenges.

However, the administration targets 10,200 megawatts of electricity by 2019.

The companies

To achieve that, sector analysts estimate that Nigeria will require at least $3.5 billion annual investments in power generating capacity alone, with large portions required for the transmission and distribution networks.

Power, Works and Housing minister Babatunde Fashola said in a lecture that the Federal Government’s road map for solving the power crises was to attain incremental supplies wherever it could be found.

He also said that to attain the incremental power and ultimately stable generation and supply, it was important to address some issues bedevilling the sector.

The government has signed a $1.75 billion Solar Power Purchase Agreements with 14 companies to build 1,125 megawatts capacity of renewable power across the country.

The solar projects were expected to be delivered between 12 months and 18 months, with some of the companies already meeting their side of the bargain.

According to Mr Fashola, the incremental electricity supply project of the Federal Government is the development of hydro power through the construction and rehabilitation of several dams.

Consequently, the first overhaul of the Jebba hydro plant, inaugurated in 1985, has been completed with more construction of mini dams on-going.

President Muhammadu Buhari of Nigeria. FILE | NATION MEDIA GROUP

Other on-going power projects include the 30-megawatt Gurara hydro plant in Kaduna, 10-megawatt Tiga dam in Kano, the 10-megawatt Oyan dam in Osun and the 8-megawatt Challawa dam in Kano.

All those dams are to generate power to complement the Egbin plant in Ikorodu, which had only two functional turbines in 2013, but now has six.

Mr Fashola said the Federal Government had also began accelerating repairs of the Forcados pipelines, damaged by vandals, among other repairs and the construction of power infrastructures.

The government, Mr Fashola said further, had inaugurated the Board and Management of the Rural Electrification Agency to complete the numerous rural projects.

At a monthly power sector operators’ meeting recently, the Power, Works and Housing minister said the Transmission Company of Nigeria had provided a progress update on the 16 critical projects designed to improve wheeling of electricity to the distribution companies.

He also noted that the government had planned to inject $1.9 billion to assist the electricity generating companies to pay for gas to power their plants, in addition to the initial $591 million intervention fund.

The performance

However, in spite of government’s commitments in addressing the perennial challenges in the last two years, most Nigerians still express dissatisfaction with the performance of the sector.

Concerned individuals and NGOs have accused the Power ministry and the Nigerian Electricity Regulatory Commission of the inability to enforce the provisions of the Electric Power Sector Reform Act of 2005 on the industry operators.

They note that although the power sector comprises generating, distribution and transmission, most Nigerians were unsure of the sector to be held responsible for incessant supply failures.

But the generating companies say they were capable of producing 8,500 megawatts presently, given all the incentives.

The transmission companies also claim they have a capacity to wheel 5,500 megawatts of electricity for distribution, attributing major hiccups in their investment plans, especially in extending their network base of 4,500 megawatts, to lack of cost reflective tariff.

Private sector

Irrespective of these explanations, some Nigerians and the Senate blame the privatisation of the power sector as the reasons for inadequate supply and call for reversal.

With the privatisation, the government was retaining the transmission role, meaning that it was left with the responsibility of policy making and regulation.

Nigerians insist that government should create an enabling environment for the participation of more private sector investors to ensure quality power supply.

The General Manager of Tuns Electricity, Mr Alabi Anthony, said there was a need to encourage investment in generation, transmission and distribution to harness the enormous potential of regular power supply for industrial development.

He said that the problems of generation and transmission had been made worse by the activities of the Niger Delta militants who vandalised gas pipelines.

The theft of cables and other installations, he said, was another cause of difficulty in the effective distribution of electricity.

A Lagos-based industrialist, Mr Chukwudi Adams, advised the government to muster the political will to allow private sector as key players in the generation and distribution of electricity.

He explained that some industrial areas and selected cities could be ceded to private sector, adding that the current centralised system would continue to bog down the sector.

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