Friday, 29th March 2024
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Revocation Of Inactive Power Licences

THE decision by the Nigerian Electricity Regulatory Commission (NERC) to revoke non-performing power generating licences it issued years ago is understandable given the abysmal level of power generation and distribution in the country.
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Power Plant

THE decision by the Nigerian Electricity Regulatory Commission (NERC) to revoke non-performing power generating licences it issued years ago is understandable given the abysmal level of power generation and distribution in the country.

The licences were issued on the prospect that by now, they would contribute to power generation and improve the electricity situation.

More than nine years after the licences were issued, there is practically no visible improvement from those quarters. Rather Nigerians have witnessed the deterioration of electricity supply. NERC said it reviewed the status of the 120 licences issued since 2006 and lamented that “many of the licences were yet to move from mere papers to megawatts of electricity”.

The same scenario played out with respect to the 18 private refineries that were licenced some years ago that never saw the light of the day and are now almost forgotten.

There must be inherent flaws in the way these licences were granted when in reality the investors lacked the capacity to deliver. Appropriate due diligence would seem not to have been done before granting the licences. And this is unacceptable.

For instance, what were the terms of the agreements? What were the specifications and timelines? Interestingly, however, while bemoaning the failure of the previous licensees, NERC still has gone ahead to issue fresh generation licences to four companies. The firms are Nigeria Solar Capital Partners Limited, for 100MW; solar-powered IPP at Ganjuwa, Bauchi State; Proton Energy Limited, for a 150MW; IPP at Ogorode, Sapele, Delta State; Turbine Drives Limited for 500 MW IPP at Ajaokuta, Kogi State and Pan Africa Limited for a 24MW solar-powered IPP at Kankia, Katsina State.

NERC warned that it would move from being ‘lenient’ with the licensees to evoking the relevant provisions of the Electric Power Sector Reform Act (EPSR) to revoke any non-performing licence after a technical evaluation of the licences. The saber-rattling is unnecessary. With due diligence done before issuing licences, the phenomenon of inactive licences would never arise as the right people would have been so licensed in the first place. NERC should, therefore, do its regulatory job in a way that serves the whole purpose for which it was set up.

The issue of epileptic electricity has become Nigeria’s albatross, almost defying all possible solutions, indicating that such solutions were hardly well thought out, let alone diligently implemented. Nigerians have suffered untold hardship as a result of no electricity and the nation’s economy has been shackled by poor power supply. Small businesses, the engine of any economy, have particularly been killed or stunted in growth as a result, leading to mass unemployment and ravaging abject poverty.

Amidst the energy crisis, electricity consumers are being fleeced by the electricity distribution companies with outrageous bills being routinely issued to consumers. Citizens are, therefore, paying exorbitant fees for services hardly rendered.

Attempt has been made to boost electricity supply using the Independent Power Project (IPP) framework. While IPP has proved to be an effective model in other countries, the framework has been haphazardly implemented in Nigeria, thereby making it a near failure. Besides, poor planning, deliberate subterfuge and, of course, corruption constitute a big stumbling block to adequate power supply.

The policy that requires IPPs to link their power output to the national grid is defective, a policy that not only discourages private investment in IPP but also makes the power output fizzle out in the national grid without meeting the needs of anybody.

The solution to Nigeria’s power problem is not as far-fetched and complex as it has been made to seem. A committed and sincere administration can make a dramatic change in no time but the situation remains dire because there has been no political will, honesty of purpose and sincerity in all the plans or so-called road-maps.

The Muhammadu Buhari administration has a historic opportunity to change tack from years of drift to making Nigeria truly work. By tackling electricity supply in earnest, the administration would have fulfilled a cardinal part of its mandate.

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