With the successful handover of the successor electricity generation and distribution companies to private operators last Friday, Chika Amanze-Nwachuku and Chineme Okafor are of the view that Nigerian households and businesses should look forward to stable electricity in the foreseeable future.
A series of power sector polls conducted by NOI Polls Ltd for the second quarter of 2013 revealed that about 130 million, representing 81 per cent, out of the 160 million Nigerians generated their own electricity through alternative sources to make up for irregular power supply.
The study also showed a combined average of 69 per cent or 110 million of Nigerians experienced greater spending on alternative electricity supply.
Nigeria's electricity crisis has been a bane of its economic growth as many industries had either shut down or relocated to neighbouring countries due to the worsening power woes. But while manufacturing companies and other small businesses spend fortune to generate own power, pushing up costs and eating into profits, generator dealers in the country have been the beneficiaries of the rots in the power sector because almost every business and household in the country patronises them.
A recent statistics on use of generating sets in the country released by the Director-General of Centre for Management Development, Dr. Kabir Usman, revealed that about 60 million Nigerians spent N1.6 trillion on generators annually.
Usman, who spoke at the launch of the National Power Training Institute of Nigeria (NAPTIN) graduate skills development programme in Abuja disclosed that Nigeria topped the countries that use standby generators.
The DG also observed that the poorest Nigerians paid more than N80/kwh burning candles, kerosene and firewood while manufacturing companies spend between N45 and N60 per kilowatt hour (kwh) on diesel to run their generators.
The problems associated with use of generators are many and varied. Aside from the noise pollution, it is the cause of many deaths in Nigeria due to the carbon monoxide emission.
Little wonder that Nigerians, who long desired stable electricity for their homes and businesses, have lauded last week’s handover of power utilities to private entities. Their expectation is that the takeover of management of Nigeria’s electricity industry by private investors will substantially boost electricity supply and make the country commercially viable.
However, attaining self-sufficiency in electricity supply and distribution may take a little time, because the barriers must be removed and key enablers provided for it to happen. For instance, the issue of inadequate gas, poor transmission network and vandalism/theft of power equipment must be addressed for the power reform to achieve its objectives.
Vandalism of Power Assets
Over the years, theft/vandalism of electricity equipment had been the major hindrance to sustainable electric power delivery in Nigeria.
Former Chief Executive Officer (CEO) of the Port Harcourt Electricity Distribution Company, Fatai Rotimi Onanuga, in a paper he presented at a special seminar for judges in Calabar last year, revealed that annual losses recorded by electricity distribution companies owing to theft of electricity assets, were more than enough to build power generation plants with additional 20,000 megawatts (MW) generation capacities.
Onanuga said what had been lost to theft in three years was equivalent to 60,000MW, which he said was enough to meet national energy demand.
He said electricity thefts were committed when consumers and utility staff resort to unlawful direct hooking from line; bypassing energy meter; injecting foreign elements into the energy meter; drilling holes in electro-mechanical meter; or assigning illegal amount of energy units to consumers.
Also, at the recent commissioning of the 2x60MVA, 132/33kV transmission substation constructed in Karu, Abuja by the World Bank under its National Energy Development Project (NEDP) framework, Minister of Power, Prof. Chinedu Nebo, had said vandalism of power assets was taken a very worrisome dimension and government spends a fortune to fix affected equipment.
Nebo said small fittings of about N12,000 stolen by these thieves, destroyed power equipment that will now cost the government millions of naira to fix in the Ikeja area of Lagos.
In Akpaka, a residential suburb in Onitsha, Anambra state, the landlords were said to have constituted themselves into illegal energy vendors by defrauding and tampering with electricity installations, which they ought to safeguard. The situation was brought to the attention of the Nigerian Electricity Regulatory Commission (NERC) recently by aggrieved residents who thronged the venue of the just concluded Power Consumer Assembly (PCA) of NERC. A similar thing happened in 2012 at the CITEC Mbora estate in Abuja.
It is feared that vandalism and theft pose serious challenges to the new investors and actions must be stepped up to check them. Therefore, new owners of the power assets should find sustainable means of tackling these menace, which result in system disintegration and eventual loss of capacities.
Concerns over gas, transmission
Energy experts have continued to express worries that inadequate gas supply and poor transmission also posed serious threats to the power reforms. Managing Director, Seacorf Engineering Limited, Mr. Charles Fashola, commented last week that the issue of inappropriate commercial pricing deterred gas producers from investing in the country.
Speaking in the same vein, an energy consultant, Mr. Danladi Bako, attributed Nigeria’s inability to realise stable power supply to obsolete transmission and distribution systems. These issues were also raised last month by Chairman of the Technical Committee of the National Council on Privatisation (NCP), Mr. Atedo Peterside, who cautioned that Nigeria’s aspiration to achieve steady power supply after the power sector assets handover might be hampered unless urgent steps were not taken to address the problem of weak transmission and inadequate gas.
Peterside had expressed concern that transmission, which is the ‘life-blood’ of the entire electricity eco-system, was potentially the weakest link currently, and could cause a very big crisis by 2014, when more power plants would have come on stream.
FG Calls for Patience
The Director General of the Bureau of Public Enterprises (BPE), Mr. Benjamin Dikki, confirmed the problem of inadequate gas at a recent breakfast meeting of the Lagos Business School, where he also appealed for understanding among Nigerians as the power sector reform would not bring about immediate changes.
The DG explained that investments in the power sector would take time to achieve results because construction of new generation capacity alone would take between two-five years to achieve most of the results envisaged.
He noted that the bulk of electricity generated in the country was through gas-fired plants, but the country at present, did not have the capacity to supply enough gas to support the envisaged increased capacity as the private sector takes over power generation and distribution.
Dikki said Nigeria’s abundant gas resources needed to be harnessed for power generation and called for strong incentives and support from the government to encourage the private sector investments in gas to boost power supply in the post privatisation era.
He however expressed optimism that with the power sector in private hands, Nigerian would benefit from increased power supply and a boost in agricultural and industrial development among other positive developments.