‘Lessons Nigeria’s power sector should learn from South Africa’
Could you tell us your mission to Nigeria, considering you are based in South Africa?
We operate in West Africa, Nigeria, and East Africa and Kenya. Nigeria is obviously a very important regional force with a large economic growth. Not just Nigeria, but West Africa is a very important area for a large economic growth and within the regions, mining plays a large role in development of infrastructure for the existing population in West Africa. I think mining would play a much more prominent role in West Africa’s capabilities for the future in sustaining development of infrastructure for mining. For investment to be visible in mining business, the infrastructure would need to be developed. Mining corporations would be assisting the West African countries in developing those structures and much more, financing their infrastructure.
Eaton provides energy-efficient solutions in 175 countries around the world. What kind of solution has the company provided since opening shop in Nigeria?
For the Nigerian office, we are looking at bring quality solutions into Nigeria and then as the organisation becomes a little bit more neutral, we are starting to diversify our product portfolio and so we are moving away from just supplying a product to supplying more internet solutions. We are able to tie in our quality power solutions with distributions and with distribution, together as a total package for customers.
As you already know Nigeria is in recession, what type of solutions can you offer in this regard?
I think for our products portfolio, we have a diverse range of products and we have premium range products as well as economic range products. If the Nigerian economy is in recession, the economy can be stimulated by using more cost effective solutions for the economy and once the economy is back and running, you could start transferring more premium range of products in to solutions.
One of your consultants complained about the high cost of your product. What is Eaton doing to make affordable products available in Nigeria?
Some of the premium range of products are targeted at industries and large corporations. When you look at the economy range of products, this would typically be targeted at commercial buildings, because commercial buildings sector are extremely competitive and the process are obviously a key factors for the customers.
I think we need to look at moving forward. Most customers today focus on the short-term financial benefits, and we need to start educating the customers about the long-term benefits of financial benefit.It is better to take slightly more expensive product and you get better lifetime expectancy out of it. Initially, your capital expenditure might be slightly higher than you used in economy range products, but over a long period of time like 10 or 15 years you would be saving yourself some money. And those are some of the things that in the long term would be stimulating the economy growth.
What are the successes recorded so far in terms of technology transfer in Nigeria?
Africa is such a large continent; we would be utilising distributors as well as service providers, so we call it value added resellers. In this particular case, we would be training resellers to do service and maintenance of certain products that we authorise them to do. We would also appoint authorised electrical sellers within the regions to ensure we have diversified foot prints that would actually support the product in remote regions as well as increase the product availability within the region.Right now, the country has problems with trying to boost electricity supply, we have capacity to generate up to 10,000 megawatt but even if all is generated, it cannot be transmitted.
Regarding the Nigerian power sector, what is your advice on how to boost electricity supply in the country?
One of the key things is that, we can utilise our battery storage systems, we have a small system which goes up to one megawatt. We are taking our existing range of UPA modified system of the UPA slightly and that allows us to put battery storage inside the system, that would allow the customer to charge his batteries during non-peak times and then utilise the power at a more central time.
We can then also incorporate that with micro grants, which is basically when a customer manually selects a particular electrical source at a particular time of the day, we have a software component which seats in the system. And you can pre-programme the software component to look at the best most cost effective electrical source at a particular time of the day. As an example, if the power went out now and the best source was to start the generator, it starts the generator and it runs with it.
If you have a solo plant connected to this, it could stop generator and switch on solo plant to store power. And with the micro grant, we are able to manage your power more effectively. We can swap from utility means to generator, to PV to wind to battery storage and you can utilise all of these in combination. I think that is going to be part of the answer for the future especially when you start looking at the rural areas where it is very difficult to get the electrical infrastructure down because of the remoteness of the regions.
South Africa has really been able to get it right when it comes to power generation and supply, what do you think South Africa has been able to do that we have not done in Nigeria, or what do you think we can copy from them?
Obviously South Africa is fossil fuel dependent. I think more than 80 per cent of their power comes from fossil fuel; we have one nuclear power station and I think 200 power stations. One of the key things that make South Africa successful is that government has good infrastructure laid down to be able to generate power. I think a certain portion of the market needs to be privatised so that you have a more competitive market and also the people are held accountable for delivering power. If you do not deliver power, you do not make money, so I think it would be a little bit of a mixture of having some government content in the power system, but also to have private investment running part of their electrical infrastructure.
Your company is into mining, construction, aerospace, vehicles and you’re just bringing only power into Nigeria. Do you have plans to diversify into other areas apart from power in Nigeria?
I do not think so because our company is focused on managing power efficiently and safely which is what is key to us in our business. I do not think at this point we ever think of diversifying the business to become a power producer in Nigeria.
Right now, because of the security challenge and recession, Nigeria has been losing a lot of investors. Some Nigerian investors are complaining of the situation and thinking of relocating, but here you are bringing in new things, introducing new products and ready to do many things in Nigeria. Why so much interest in investing in Nigeria? I think if you ever looked at Africa as a continent, it is extremely important for our company as a business, because that is where the growth is going to come from in the next 15 to 21 years. Europe is well developed and South America is well developed and Africa is the place to be. We invest into the regions now and we going to be way behind any other competitor in the market place. We definitely have a 20 year plan where Africa is the focus.
Industries that are coming into Africa should play significant role in developing infrastructure, because you want a mining or cement company to come into the country and you do not want them to take part in building a plant, to be there to uplift the local community and help the infrastructure for that area.
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