[email protected]: Kudos, knocks for power sector




As Nigeria marks its 59th independence anniversary, the country’s power sector can’t be said to have improved in terms of electricity supply to the citizenry. TOPE SUNDAY writes.

History of electricity generation

Available information on the website of the Nigerian Electricity Regulatory Commission (NERC) shows that electricity generation started in Nigeria in 1896 but the first electricity utility company, known as the Nigerian Electricity Supply Company (NESC) was established in 1929.

By the year 2000, a state-owned monopoly, the National Electric Power Authority (NEPA), was in charge of the generation, transmission and distribution of electric power in Nigeria.

It operated as a vertical integrated utility company and had a total generation capacity of about 6, 200 MW from 2 hydro and 4 thermal power plants. This resulted in an unstable and unreliable electric power supply situation in the country with customers exposed to frequent power cuts and long period of power outages and an industry characterised by lack of maintenance of power infrastructure, outdated power plants, low revenues, high losses, power theft and non-cost reflective tariffs.

In the year 2001, the reform of the electricity sector began with the promulgation of the National Electric Power Policy which had as its goal the establishment of an efficient electricity market in Nigeria. It had the overall objective of transferring the ownership and management of the infrastructure and assets of the electricity industry to the private sector with the consequent creation of all the necessary structures required to forming and sustain an electricity market in Nigeria.

In 2005, the Electric Power Sector Reform (EPSR) Act was enacted and the Nigerian Electricity Regulatory Commission (NERC) was established as an independent regulatory body for the electricity industry in Nigeria. In addition, the Power Holding Company of Nigeria (PHCN) was formed as a transitional corporation that comprises of the 18 successor companies (6 generation companies, 11 distribution companies and 1 transmission company) created from NEPA.

Privatization of the sector

In a bid to tackle major issues within the Nigerian power sector, principally concerning power outages and unreliable service, compelled the federal government to take radical action. It enacted the Electric Power Sector Reform Act of 2005, which called for unbundling the national power utility company into a series of 18 successor companies: six generation companies, 12 distribution companies covering all 36 Nigerian states, and a national power transmission company. The act stipulated that ownership of these companies be granted to the Bureau of Public Enterprises (the privatization arm of the federal government) and the Ministry of Finance Incorporated. This unbundling paved the way for an ambitious privatization programme to be carried out by the Bureau of Public Enterprises in Nigeria.

In 2007, the Bureau of Public Enterprises (BPE) hired CPCS Transcom Limited, an international consulting firm based in OttawaOntarioCanada to provide advice about the ways to move forward with the privatization of the country’s 11 distribution companies and the 6 generation companies. In 2010, CPCS was consulted again in order to provide advice on the Nigerian government’s privatization programme.

On 30 September 2013, following the privatisation process initiated by the Goodluck Jonathan’s regime, PHCN ceased to exist. In its stead, the Nigerian Electricity Regulatory Commission (NERC) was formed. The independent regulatory agency, as provided in the Electric Power Sector Reform Act of 2005 was tasked with monitoring and regulating the Nigerian electricity industry, with issuing licences to market participants, and with ensuring compliance with market rules and operating guidelines.

Mixed-feelings

 For the Nigerian power sector, it is a mixed-feeling going by what it has recorded in the last 59 years. One of its major problems is the non-frequent supply of electricity. This development, according to the findings by Blueprint occurred because of some the DisCos’ refusal to evacuate the generated power. 

At the moment, the Transmission Company of Nigeria (TCN) has the willing capacity of 8100MW, and the daily generated power by GenCos is between 3.531 and 5.890 Megawatts. Despite this feat, Nigerians are not getting regular power supply. 

A recent visit to Shiroro Power plant in Niger State by our correspondent revealed that Nigeria is generating between 50.03 to 50.12Hz hourly. This explains that the country is generating the required power that will serve the nation. 

According to Engr Jide Ojo, who spoke to our correspondent, some of the Discos are not taking up the power. 

He said this development always results in damages for the power generating companies. 

A retiree, Alhaji Lukman Abdulsalami, who spoke with Blueprintsaid, Nigeria as a country has fared well in all sectors since its independence but lamented that power sector is it albatross. 

“For me, power sector is the only problem I can say successive governments have not been able to solve. We have grown in all areas but power is the only thing lagging behind”. 

A trader, Ms Fatimah Aliyu, who sells soft drinks in one of the villages in Abuja, said estimated billing is the only thing that she is concerned about. Despite this, there is no regular power supply. This she said, is a problem that should be tackled frontally. 

2015 till date score card

Four years down the line, the available data from the  ministry of power shows that power generation has increased from 4,000MW to 7,000MW; transmission from 5,000MW to 7,000MW and distribution from 2,690MW to 5,222MW.  

Also, the ministry in a bid to solve the country’s power problem is exploring the Off-grid sector. To this end, seven universities as well as two teaching hospitals are currently having their own independent power solution deployed at various states.

Also, some markets in Lagos, Kano, Aba, Ondo, Ibadan now have their own steady supply of power, while six hydro dams were recently concessioned to supply power to rural, farming and contiguous communities.

President Buhari, while presenting the 2019 budget proposal to the joint session of the National Assembly said his government was working on over 90 transmission projects across the country, stating that seven power transmission stations have been completed.

He said: “In power, we are working on over 90 transmission projects across the country. Major power transmission stations like Mayo Belwa in Adamawa, Ejigbo and Odogunyan in Lagos, Apo in Abuja, Ikot Ekpene Switching Station in Akwa Ibom, Maiduguri in Borno, Damaturu in Yobe have been completed to support electricity transmission.

“For effective delivery to critical areas, we decided that we had to decentralize power supply leveraging on off-grid solutions especially solar based systems. We are pushing more willing-buyer, willing-seller arrangements. Already, this has brought more reliable off-grid power to markets and economic clusters around the country.

“The projects being implemented right now include the Ariaria markets in Aba, the Sabon Gari Market in Kano, the Sura Shopping Complex in Lagos, to mention a few. Our hope is to roll out such programmes to 300 such economic clusters across the country’’.

MAP initiative

During the year under review, the Nigerian Electricity Regulatory Commission (NERC) introduced the Meter Asset Provider, MAP, regulation, and the Abuja Electricity Distribution Company (AEDC), one of the 11 Discos has implemented it.

MAP was introduced in a renewed bid towards ensuring that electricity customers only pay for what they actually consume. The regulation provides for the supply, installation and maintenance of end-user meters by other parties approved by the Commission.

 “The Meter Asset Provider (MAP) Regulation (Regulation No. NERC/R/112), which would become effective on April 3, 2018, introduces meter asset providers as a new set of service providers in Nigeria electricity supply industry. As assets with a technically useful life of 10-15 years, the regulation provides for the third-party financing of meters, under a permit issued by the Commission, and amortisation over a period of 10 years.


The challenges

Despite the notable increase in power generation and supply, which came to being as a result of the efforts of the present government, estimated billing is one of the challenges confronting the power sector.

To tackle the muster, the then Majority Leader of the House of Representatives, and now the Speaker, Femi Gbajabiamila, had to sponsor a bill to criminalise estimated billing by DisCos in the country, but unfortunately, it has not been passed into law.

Aside from the menace of the estimated and over billing, another problem in the power sector is the lack of synergy between the GenCos, Discos and the Transmission Company of Nigeria (TCN), which is affecting the power supply to Nigerians.    

 Now, as the country marks its 59th independence anniversary, it is not yet uhuru for the power sector. 

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