A Review of the Nigerian Energy Industry

Dark days loom for Nigeria’s power sector

*Spectacle of power outage.
*Spectacle of power outage.

*NIPPs’ performance hampered by myriad challenges

Oscarline Onwuemenyi

30 September 2015, Sweetcrude, Abuja – Despite recent recorded improvements in power generation across the country, there is growing fear that the dark days of decadent and epileptic power supply may be far from from over.

This is as the National Integrated Power Projects (NIPPs) under the management of the Niger Delta Power Holding Company Limited (NDPHC), which should have been contributing 4,800 megawatts (mw) capacity to the national grid since 2013, have continued to be marred by issues of gas supply constraints, court injunctions blocking the transmission segments as well as theft and sabotage of constructed infrastructures.

This situation is despite the widely acknowledged availability of gas in the country to power the plants, officials of the NDPHC have stated.

Over the past two years, officials noted, the major problems of the NIPPs have revolved around vandalism and the gas pricing policy.

The privatisation transaction of the 10 NIPPs is currently stalled since there is no adequate gas for full commercial operation.

The NDPHC Managing Director, Mr James Olotu also recently wrote to the Inspector-General of Police seeking for interventions and protection of its threatened assets from acts of vandalism.

Meanwhile, the NDPHC Executive Director on Networks, Dr. Albert Okorogu, after an assessment tour
in June also disclosed there were encroachments on transmission facilities across Imo, Enugu, Abia, Akwa-Ibom and Cross River states, which have hindered the delivery of power from the 563mw Calabar and 330mw Egbema plants.

The NDPHC Head, Environment, Mr. Ben Iruoha also noted that though the acquisition of land and due payment of compensation had been undertaken to allow construction of transmission lines, some people had obtained court injunctions that stopped work over the demand of another compensation round.

As a result of the above, the NDPHC has had to shift the transaction completion to January 2016 when it hopes it would have resolved many of these bottlenecks.

‎This is as the Nigerian Electricity Regulatory Commission (NERC) has lamented that poor electricity distribution facilities across the country may scuttle its plans to increase on-grid electricity generation to 6,000 megawatts by the end of 2015.

Chairman of NERC, Dr. Sam Amadi noted in Abuja that the pessimism of the agency stemmed from the preliminary works of the committee he set up some weeks back to help reclaim and transmit stranded electricity generation capacities into the national grid.

Amadi observed that the preliminary report of the technical committee recently set up to drive the realisation of the target indicated that the extent of infrastructure deterioration in the distribution network might have been underestimated.

He explained that the market still experiences huge load rejection and shedding as a result of the development, adding that new measures would have to be devised to overcome such massive distribution infrastructure decline.

When asked about the feasibility of the December 6,000MW generation and distribution target, Amadi said: “It is feasible depending on how quickly we can turn around the network of the distribution and transmission company.”

“I am worried about getting this milestone because of the preliminary report I have got from the committee. The deterioration of the Discos network is worse than we think.”

He added that, “There is still massive load rejection even as we have solved the imbalance energy problem. So, it means that there is something else. That something else is getting our attention.

“Maybe we get to succeed in this target. Don’t forget that this is my own ambitious target not a target set in MYTO for the market. Why am I setting this target? I will like us to crown the tenure on a high. We all like to succeed. It is miserable that we have for 16 years set a target of 6,000MW and never got it. I will be sad if we miss it. I will be very happy to have the Commission finish its first tenure on 6,000MW. It is like breaking the jinx so that we can aim at 10,000 and 20,000MW.

“If we don’t get to 6,000MW under Buhari’s new paradigm of discipline and anti-corruption then how can we be sure of getting 10,000MW soon? We have to work hard,” Amadi explained.

The transmission network with its poor infrastructure had often been identified as the weakest link in the country’s electricity network.

However, NERC’s identification of the distribution weakness confirmed the slow pace of investments to upgrade the distribution network by operators.

Reports also revealed that the impact of the apparent slow pace investment on the distribution network is further compounded by the reluctance of some Distribution Companies (Discos) to take over the distribution assets built by the Niger Delta Power Holding Company (NDPHC) Plc under the National Integrated Power Projects (NIPPs).

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