Power sector reform beyond rhetoric
But for last week’s The Guardian’s ‘‘Power Summit, Beyond Rhetoric: Turning Nigeria’s Power Sector Value Chain Potential to Profit,’’ which clarified the seemingly convoluted power sector reforms, there would have been more knocks for the government over unending failed promises that have characterised the power sector.
It is gratifying to note that the Summit shed more light really beyond rhetoric this time on the way forward for the sector that has been demonised for underperformance.
Before The Guardian colloquium in Lagos, there had been reports of yet another power sector restructuring plan, which sought to focus mainly on renewable energy that has not been fully integrated into the energy mix.
Specifically, the Vice President, Yemi Osinbajo, who recently acted as President was the source of the planned power sector reform. A component of the reform was that government was set to release a second tranche of the N701 billion for power assurances guarantee approved by the Federal Executive Council (FEC) in March this year for the Nigerian Bulk Electricity Trading (NBET).The Federal Government had, through NBET, released the first tranche of N12 billion to 10 generating companies (GenCos) from the N701 billion intervention fund.
Osinbajo, who spoke during the Nigerian Renewable Energy Roundtable organised by the Ministry of Science of Technology in partnership with the Nigerian Economic Summit Group (NESG) had noted, “we want to embark on a broader restructuring of the electricity sector and strive to achieve a more systematic development of power market design, especially, for renewable energy.”
He said there was the need for a framework that would bring together all stakeholders towards ensuring that renewable energy could become the engine of growth for the Nigerian economy.
This newspaper has repeatedly written that reports of reform alone without proper planning and discipline of execution would not produce electricity for the more than 180 million Nigerians. Facts available since restoration of democracy to the country in 1999 show that the sector has only been boasting of potential to generate 10, 000 megawatts of electricity without reaching such a goal as it always hovers around 4,000 to 5,000 megawatts. It was sweet music to the ears last week that the nation now has capacity for up to 7,000 megawatts and could be more with the single-minded seriousness we were told to believe at the moment.
Remarkably, it was cheering to note too at the same The Guardian’s Power Summit that electricity is no longer considered as a social service but a serious business. Specifically, the sector is being repackaged as a commercial venture following privatisation, more so as the generating companies (Gencos) and distribution companies (Discos), are being made to realise that there is a correlation between lack of progress in the country and near paralysis in the power sector.
That was why the nation heaved a sigh of relief last week when the Minister in charge of power, Mr. Babatunde Raji Fashola disclosed at the Summit that electricity generation had indeed hit 7,001mw. Indeed, the Summit produced a surfeit of illuminating information by the experts and operatives in the sector.
For instance, it was also disclosed that Nigeria’s transmission network would sooner than later receive a boost as the Niger Delta Power Holding Company Limited (NDPHC) had embarked on an investment of over $1.5 billion (N540 billion) in relevant infrastructure.
Accordingly, the investment is expected to tackle the transmission inadequacies in the sector. The development was disclosed even as Minister of Power, Works and Housing added that the production of electricity from power plants across Nigeria had reached 7,001 megawatts (mw) from the 2,069mw recorded in 2015 when the current administration took over.
Still fact checking at the Summit, the Executive Secretary of the Association of Power Generation Companies (APGC), Dr. Joy Ogaji, had told this newspaper that although the generation companies (Gencos) had power generation capacity of 12,500 megawatts (mw) per day and with expansion capacity of doubling it, the Transmission Company of Nigeria (TCN) and the distribution companies (Discos) had had ill-equipped infrastructure to evacuate and distribute the generated power. This, the minister has assured, was being seriously addressed to boost power in the sector.
Besides, the Chief Executive Officer of the company that began enhancement as the Nigeria’s Integrated Power Project (NIPP), Chiedu Ugbo, at the Power Summit said that Niger Delta Power Holding Company (NDPHC), the NIPP successor and intervention firm, had embarked on several transmission, distribution and gas projects to bridge infrastructure gap in the sector.
Ugbo had listed the transmission projects to include a 5,590 MVA of 330/132kV transformer capacity; 313 MVA of 132/33kV transformer capacity; 2,194 km of 330kV lines; 809 km of 132kV lines; 10 new 330kV S/Stations; seven new 132kV S/Stations and expansion of 36 existing 330kV and 132kV S/Station. These are the concrete pieces of information that the citizens need as a glimmer of hope in a sector that has made mess of service delivery in public sector.
On power sector achievements since 2015, Fashola said at the Summit that the Federal Government’s effort at providing electricity was yielding positive results. According to him, as at September 4, 2017, the available power that could be put on the grid was 6,619 mw while the transmission capacity was simulated at 6,700 mw, up from 5,000 mw in 2015. “Production reached all time high of 7,001mw.”
The minister was frank when he put the distribution capacity at 4,600 megawatts arguably, a mismatch between generation and distribution output. The former governor, however, noted that the achievement could not be attributed to the regular rainfall, which is known to contribute to the generating capacity of hydro power plants.
There were also pieces of information about strategic deregulation that should mark the sector when the minister noted that the government was also looking at licensing some private power plants that have generation licences and excess power, but no distribution licence, to grant them permits to willing buyers especially in industrial clusters under regulations made by Nigeria Electricity Regulatory Commission (NERC). This too is evidence of progress that is long in coming, anyway.
There is urgency in the planned effort to complete the 240mw Afam power plant; 10mw Katsina wind farm; 29mw Dadin Kowa hydro plant; 30mw Gurara Hydro plant; 40mw Kashimbilla Hydro power plant; Kaduna 215mw plant; Zungeru 700 mw Hydro plant and the Mambilla 3050mw Hydro plant that would in the nearest future increase the country’s generating capacity. These are measurable projects that the nation can hold the government to account for at any time.
There was also disturbing information about governance issues in the sector as the Commissioner, Legal, Licensing and Compliance, Dafe Akpeneye, disclosed. According to him, available statistics showed that customers have bypassed about 70 to 80 per cent of installed meters. This unethical practice in the electricity industry is a huge challenge, which the regulator should scrutinize. It was good enough as it was said at the Summit that metering business would soon be deregulated – to break the monopoly of the electricity distribution firms, in this regard.
To tackle the issue, there is the need for a significant investment in smart meters’ tamper proof technology. The new metering regime should ensure that all ministries, departments and agencies (MDAs) migrate to pre-paid meters to forestall having to deal with accumulated debts, a major blight on finances of the DISCOs. This is why we would like to encourage the government to ensure that the current reform agenda migrates from rhetoric to action that is deliverable to the people that have long been hungry for electricity.