Why Atiku, Tinubu’s power targets may remain elusive
Stakeholders have expressed reservation over the promise by the presidential candidates of the two major political parties to turn around the power sector.
Both Alhaji Atiku Abubakar of the Peoples Democratic Party (PDP) and Asiwaju Bola Ahmed Tinubu of the All Progressives Party (APC) have unveiled their manifestos with the rejuvenation of the power sector as a key element. While Abubakar promised to lift the electricity generation by 25,000MW, Tinubu plans to tackle the power challenge by generating 15,000MW.
The stakeholders, who said that Nigerian politicians including former presidents Olusegun Obasanjo, Musa Yar’Adua, Goodluck Jonathan as well as presidential hopefuls like Atiku Abubakar have made declarations about the sector in the past only to score political points, insisted that any attempt to promise what they described as ‘political megawatts’ must be resisted.
Tinubu had, in his newly released economic agenda among other plans, said his administration would target an electricity distribution goal of 15,000 megawatts across the country and ensure a sustainable 24/7 supply.
“On electricity, I will embark on a renewed action-oriented focus and take immediate and urgent action on resolving existing challenges of power generation plants, gas purchasing, pricing, transmission, and distribution. My administration’s critical goal is to have 15,000 megawatts distributable to all categories of consumers nationwide to ensure 24/7 sustainable supply within the next four years,” Tinubu said.
While the APC government was canvassing for power in 2014, the party, including Tinubu had pledged to increase generation capacity in the country to 40,000 megawatts.
“The APC government shall vigorously pursue the expansion of electricity generation and distribution of up to 40,000 megawatts in four to eight years.
“The party will also work assiduously at making power available from renewable energy sources such as coal, solar, hydro, wind and biomass for domestic and industrial use, wherever these prove viable,” the ruling party’s manifesto had stated.
Like the APC government, Jonathan while privatising the electricity sector in 2013 designed a master plan targeting over 40,000MW.
The Obasanjo administration, accused along with Atiku as vice president, to have spent $16 billion on electricity, had designed steps to increase the generation, distribution and transmission capacity of the country to 10,000 megawatts of electricity before the end of 2010.
The plan, which gave birth to Independent Power Projects, could not achieve much in eight years before being inherited by the Yar’Adua and Jonathan administration.
While the Buhari government has already spent over N4 trillion in the power sector, Nigeria’s current generation capacity hovers around 2,000MW, meaning that President Buhari may leave the power sector worse than he met it.
PDP presidential candidate, Atiku, in his economic manifesto already declared to generate 25000 MW of non-renewable energy (hydro, solar, nuclear) and other thermal fuels (coal, biofuel) in addition to natural gas.
But most of the experts who spoke with The Guardian insisted that most politicians lack understanding of the issues in the power sector and may only be scoring points in their plans. They underscored the need for Atiku, Tinubu and other politicians to understand the dynamics of the power sector. This, they argued, would prepare them sufficiently for the task ahead.
Former Chairman of the Nigerian Electricity Regulatory Commission (NERC), Dr. Sam Amadi stated that Nigerians must be aware that there’s nothing new about the political promises in the power sector, insisting that the real problem remained to change the structural and cultural constraints to efficiency in the industry.
“We have not managed well these constraints. We have not even properly understood them. We have simplified them as the lack of finance or the absence of the private sector in the industry. It is most endemic and institutionalised in the structure of governance and management in the sector,” Amadi said.
According to him, the starting point should be to review the policy framework of the sector and build on the review to develop a new roadmap that is based on accurate diagnosis, not fanciful and ideological viewpoints of the sector.
“Political messaging may obscure this important need and misdirect presidential candidates to focus on symptoms and not on pathologies,” he stated.
Noting that politicians are entitled to their plans and opinion, Executive Secretary of the Association of Power Generation Companies (APGC), Dr. Joy Ogaji said a wide variety of determinants affect the investment decision in power generation.
Ogaji said that the state of the market in the sector acts as a determinant of whether or not generation capacity should increase given that what has been made available for nearly nine years is not yet realised.
According to her, no matter what politicians may be saying, the demand side of it remains a key determinant to increase in generation capacity, adding that electricity supply is closely tied to demand and facilitated through a pool where the output from all generators is aggregated and scheduled to meet demand.
“This is because the storage mechanism for electricity generated is still in view. Hence supply must vary dynamically with changing demand. Statistics from the Nigerian system operator on load demand over the last three months average over 28000MW. This means that there is a suppressed demand of over 20,000MW compared to what is being generated today, which could potentially escalate when there is the stability of supply and high ticket consumers who are self-generating decide to join up? How do we plug this gap? Most industries that are high ticket consumers are off the grid due to the poor quality of supply and unreliability. No wonder companies like Dunlop, Guinness and others have moved to Ghana,” she said.
Ogaji said there was a need for the effectiveness of contracts as the current market situation gives room for conjectures, stressing that no contract is binding.
The market, she explained, is faced with financial, operational, construction, market, macroeconomic, contract and regulatory risks.
Ogaji said decisions about investments in power generating capacity depend on expected returns and costs. She admitted that the sector is currently in a mess due to foundational challenges that were left unresolved.
“The first solution is for the sector to have a bankable and verifiable source of data. From research, developed nations differ from underdeveloped (third world) countries the world majorly on data: data in the right quality and volume.
“The Nigerian Electricity Supply Industry (NESI) lacks quality and dependable data. Reasons adduced for this lack of data are not far-fetched from the points enunciated above, in addition to the reasons that there was little or no emphasis on data, as nothing depended on it to date. You cannot monitor what you cannot measure, hence we have been conjecturing,” Ogaji said.
She emphasised the need to optimise what is available and what could be recovered, while in the medium to long term with effective planning, Nigeria could procure new capacities by embracing renewables and in addition to the thermals, but only after collective utilisation is at its peak.
President, Nigeria Consumer Protection Network, Kunle Kola Olubiyo said all the promises being made by the presidential candidates are political megawatts that may not translate to reality.
Olubiyo said: “Stop generating power on the pages of newspapers and social media. I will increase power generation from 5, 000Megawatt to 30, 000Megawatts. How do you intend to do that? Please let us know?”
Lamenting that the power sector remained dismal with some distribution companies even rejecting the low generation, Olubiyo said the Presidential candidates should speak straight to the fundamental issues and tell Nigerians how they will address the root causes of the energy crisis instead of making “bogus promises and claims.”
Professor of energy law, Yinka Omorogbe said Nigeria remained the fastest growing population in the world and can no longer afford to waste opportunities in revamping the power sector.
“They haven’t thought through the issues plaguing the electricity sector. The 15000MW target shows that in fact nothing is being promised in the power sector, considering that we presently have 13000MW installed capacity, which anyone with even rudimentary knowledge of the electricity sector knows is insufficient for a population of over 200m people. Nigeria needs at least 100000MW and a commitment to provide an enabling environment for the provision of electricity for all,” she said.
Energy expert at the University of Ibadan, Prof. Adeola Adenikinju said: “I am convinced the target of 15,000MW can be achieved if we start early and do the right thing. We have to use various energy sources. We must encourage states and the private sector to be active participants in bringing investments into the sector.
“We must address problems along the value chain from gas supply to retail. We must use micro, mini and large grids. We must pursue bold policies and programmes that would unleash the huge energy resources in the country.”