Lagos — Year 2021 has come and almost gone, and again, Nigeria is yet to get a grasp of how to steer the ship of its power sector as catalyst for industrialisation.
Experts say the country needs at least 30, 000MW of electricity to come to sufficiency.
In light of the above, the federal government plans to generate 30,000MW by 2030- 3,000MW renewables and 27,000MW from its power plants to serve its over 200 million people.
However, eight years after the sector was privatized, power generation still hovers around 4,000 MW despite the 13,000MW installed capacity.
From generation to transmission and distribution- none of the units can be said to be self-sufficient enough to drive growth of Nigeria’s economy whose both small, medium and large-scale businesses’ prosperity majorly depends on availability of adequate power supply.
Here are some of the major highlights of events in the year ending:
2021 saw completion of the first phase (Phase zero) of the federal government’s National Mass Metering Programme, NMMP.
It was flagged off on Oct. 30, 2020.
Key objectives of the NMMP include to increase Nigeria’s metering rate, and elimination of arbitrary estimated billing. It is aimed at strengthening the meter value chain by increasing local manufacturing, assembly and deployment capacity.
The programme also seeks to support Nigeria’s economic recovery by creating jobs in the local meter value chain, reducing collection losses and increasing financial flows to achieve 100 percent market remittance obligations of the electricity distribution companies (DisCos).
It will further improve network monitoring capability and availability of data for market administration and investment decision making.
Although the federal government made preparation for one million meters to be distributed in the phase zero, however, the Nigerian Electricity Regulatory Commission, NERC said about 980,000 electricity customers were metered across the country.
The second phase (Phase One) scheduled to begin in the first quarter of 2022, will see distribution of about four million meters to be supplied strictly by local manufacturers. The programme is being financed by FG in partnership with the Central Bank of Nigeria.
Mr. Kola Balogun, Chairman, Momas Electricity Meter Manufacturing Company, MEMMCOL, said the second phase could create 500,000 jobs for Nigerians through local manufacturing and installation of prepaid meters.
In May, the Federal Government announced plan to sell five power Generation Companies, GenCos to investors through the Bureau of Public Enterprises, BPE.
The bidding processes for the GenCos, which are part of the National Integrated Power Project (NIPP), have already commenced.
The NIPP projects being considered for sale are: Geregu Generation Company Ltd. installed capacity at ISO condition of 506 Megawatts (MW); Benin (Ihovbor) Generation Company Ltd. with 507 MW and Calabar Generation Ltd with 634MW.
Others are Omotosho Generation Ltd. with 513MW; and Olorunsogo Generation Company Ltd. with 754MW.
On Sept. 1, President Muhammadu Buhari sacked the Minister of Power, Mr. Salleh Mamman, in a minor cabinet reshuffle.
The president replaced him with Mr. Abubakar Aliyu, who until his appointment was Minister of State for Works.
Although the development had generated ripples across the sector, however, statement from the presidency had blamed the development on “incompetency” on the part of the former minister.
Another notable occurrence in the year was the management reshuffle in the Abuja Electricity Distribution Company, AEDC.
An industrial action against the company on Dec. 6 resulted in a total blackout within the DisCo’s network area for about 14 hours before it was called off.
The development led to the sacking of the AEDC management by the lender (Receiver Manager) which provided the acquisition loan for KANN Utility Company Limited to acquire majority stake in the electricity distribution company during the privatisation exercise in 2013.
Eight years after the power sector was privatised, there are still aggitations by experts and stakeholders for the government to review the performances of the players in the industry value chain.
Mr. Muda Yusuf, an economist and former Director General of the Lagos Chamber of Commerce and Industry said the entire experience had given privatisation a bad name.
“There were issues of due diligence, technical capacity, financial capacity, political interference, metering issues, commercial losses, technical losses, tariff rigidities and the economics of the private sector investment in the sector,” he said.
Also, Mr. Sina Odugbemi, Convener, Where’s the Light Movement, said Nigerians have not experienced the desired objectives of available, accessible and affordable electricity supply over seven years after the sector was privatised.
He said: “The only way forward is for government to reverse the privatisation policy and bring back the power sector under exclusive public ownership.
” Nigerians have witnessed both; that is, public and private ownership. Service under the so-called private investors is worse.
“We advocate the democratic control and management by workers and consumers in a more transparent manner. “
Deficit of infrastructure across the value chain of the power sector remains another challenge which affected stable power supply in the country in the year under review.
From generation to transmission and distribution value chain, the sector is in dire need of infrastructure upgrade to meet the energy needs of the populace.
Dr Joy Ogaji, Executive Secretary, Association of Power Generation Companies (APGC), said only 25 out of 150 GenCos licensed by NERC were operating optimally in Nigeria.
She said that the less than 6,000MW generated by the GenCos was not being optimally utilised due to load rejection by electricity Distribution Companies for various reasons.
Ogaji said gas supply constraints was also one of the major challenges facing GenCos and responsible for the drop in power generation.
She said that this could be remedied by the Nigerian National Petroleum Corporation agreeing to supply 60 percent of the gas needed by the thermal plants.
In another controversial breath, however, Ogaji, while reacting to claims that the poor supply of electricity was due to lack of generation, said GenCos were not dispatching at full capacity due to the poor utilisation of what they produce.
She said, “There may be many reasons for the ‘seemingly perceived poor or lack of generation. I want to state for the records that no single generation company is allowed, by the system, to send out its available capacity.
“I stand to be corrected with facts not political claims. I repeat! All GenCos are sub-optimally dispatched, with many units idle”.
She argued that capacity utilization in any market was often used as a measure of productive efficiency and stressed that the average production costs tend to fall as output rises.
“So higher utilisation can reduce unit costs, bringing about a more competitive market which makes plants financially viable,” she stated.
The country’s national grid operated by the TCN, had collapsed more than eight times in the year, sending home into darkness due to lack of spinning reserves.
Amid lack of a spinning reserve, the grid often records partial or total collapses which render most homes in darkness.
A spinning reserve is an excess capacity that compensates for electricity shortages when the grid fluctuates.
Mr. Roger Brown, Chief Executive Officer, Seplat Energy Plc, said the lack of access to electricity by Nigerians was a huge opportunity for investors
He said Nigeria’s Gross Domestic Product was currently N468 billion and was expected to rise to N973 billion by 2040 which would increase energy demand in the country.
According to some experts, if the government is able to follow through with its deal with German electricity giant, Siemens Group signed in 2020, much progress could be achieved in the power sector in 2022.
The deal which saw little progress in 2021 due to disagreement between government and the firm, when completed, will increase Nigeria’s electricity to 25,000MW.
Minister of Power, Aliyu said the project is being fast tracked to deliver about 7,000 megawatts of electricity before the end of next year, and would move to 25,000MW before 2025.
With so much expectations especially in the area of power generation and supply, Nigerians look forward to an improved power sector come 2022.