31 December 2016, Sweetcrude, Lagos — In 2016, Nigeria’s Power sector witnessed a historically highest electricity generation, persistence system collapse; huge financial debt owed by electricity consumers, Government Ministries, Department and Agencies, MDA to Distribution Companies DISCO and meter manufacturers challenges.
Precisely, in February 2nd, 2016, Nigeria made history when it generated highest peak power of 5,074.7 Megawatt.
Deputy General Manager, Public Affairs of Transmission Company of Nigeria, TCN, Clement Ezeolisah said the System Operator department of TCN announced the attainment of the new peak generation of 5,074.7MW as well as the highest maximum daily energy of 109,372 Megawatts Hour (MWH) which it transmitted across to electricity distribution companies in the country.
Ezeolisah revealed that the new mark was attained at 9.30pm on Tuesday, February 2, 2016.
Prior before February 2nd, Nigeria’s peak generation was 4883.9MW which was achieved on November 23, 2015 while it previous highest maximum daily energy wheeled nationwide was 107,142.32MWH recorded on January 26, 2016.”
Shortly after the 5,074.7MW milestone was attained, the nation’s power generation went on a downward trend as the national grid experience four consecutive system collapse which led to zero power generation.
It was reported that the national grid experienced total outage on March 31, April 9, April 23, and April 25 simultaneously.
The Minister of Power, Works and Housing, Mr. Babatunde Fashola, blamed the low generation on shortage of gas supply to the thermal plants.
However, TCN, vowed to avert future system collapse in the power sector with adequate measures put in place to enhance improved service delivery to electricity distribution companies and consumers in the country.
TCN noted that it has the capacity to wheel maximum generation from Generating Companies, Gencos, to DISCOs, and would continue to work assiduously to further expand its grid capacity to ensure that it continued to surpass the generation curve.
Not satisfied with TCN explanation, African’s richest man and The President/CEO Dangote Group, Aliko Dangote urged the Federal Government revoke the power sector privatisation noting that it was wrongly done as the problem in the power sector has persisted despite privatisation.
Dangote said “because the buyers lack understanding of the complexities of the sector.”
In swiftly reaction, the Minister of Power, Works and Housing, Mr. Babatunde Fashola, assured power sector investors that the federal government will not reverse the privatisation exercise.
Also, The Association of Nigerian Electricity Distribution Companies, ANEDC, described the call for a reversal of the privatised power sector by the President of Dangote Group, Aliko Dangote, as reckless.
Explaining some of its challenges in the sector, ANEDC Ministries, Departments and Agencies were own DISCOs over N90 billion in pre and post-privatisation of the sector.
ANEDC Executive Director, Mr. Sunday Oduntan, said government establishments, comprising ministries, departments, military formations, security agencies, owed each distribution company as follows: Abuja DISCO, N18.6 billion; Eko DISCO, N8.6 billion; Kaduna, N8.2 billion; Enugu, N7.2 billion; Ibadan, N6.8 billion; Ikeja, N5.9 billion; Port Harcourt, N6.8 billion; Benin, N5.8 billion; Jos, N6.5 billion; Yola, N2.4 billion and Kano, N1.2 billion.
It was contended that unless this funding crisis is resolved through prompt payment of the huge indebtedness and the implementation of the new power sector tariff structure, the nation’s hope of improving power supply may remain a mirage.
Not comfortable with ANEDC style of publishing names of government debtors on the pages of newspapers, Fashola warned DICOSs in the country to stop blackmailing the Federal Government over outstanding debts allegedly owed them by its Ministries, Departments and Agencies (MDA), saying Government would not succumb to blackmail and would only pay verified debts.
The Minister also advised the DISCOs to pursue the debt issue in their capacities as Distribution Companies and not under the aegis of any association pointing out that although the Constitution guaranteed freedom of association, the privatization exercise that led to the transfer of the Distribution assets of power was not held between the Federal Government and any association but 11 individual companies.
Describing the advertorials titled, “MDA debts not yet paid” with other sidelines such as “MDA pay your debts so that we can serve Nigerians better”, as a blackmail against the Federal Government, Fashola declared, “Let me say without any equivocation that government will not succumb to this Blackmail, at least not the Federal Government of Nigeria.”
Meanwhile, the huge debt and access to foreign exchange forced the Managing Director and Chief Executive Officer, Egbin Power Plc, Mr. Dallas Peavey, Jr to declared with hold backs that Nigeria may soon be in total darkness.
: “We are owed over N86bn by the Federal Government; we have been producing but we haven’t been paid for almost six months. The last amount of money that we got was about 16 percent of the total bill for the power that we generated for the month.
“We can’t continue to operate simply because we don’t have the money to pay for materials. We don’t have the money to pay for repairs and we can’t continue to pay our employers simply because we are owed so much money. We have gone out to banks and different financial entities to borrow the money to continue to do maintenance. You know for banks, the limit is only so much and we have reached that limit.”
Beside government debt, Mr. Peavey said supply of gas and the weak transmission system are major challenges the power sector is going through.
He explained that Egbin generation capacity is about 1,320MW but are currently able to generate doing about 425MW, representing only 30 per cent of their installed capacity due to shortage of gas suppl.
Mr. Peavey described TCN as the weakest link the power sector value chain noting that the transmission system which is 37 years old needs complete overhaul as it can not accommodate 5,000 mega watts from generation companies.
Electricity Meter Manufacturers Association of Nigeria, EMMAN said only Ibadan, Eko and Abuja distribution companies patronised its members. EMMAN Executive Secretary Mr Muyideen Ibrahim said said most of its members had to retrench some of their staff because they could not sustain them due to poor patronage.
He urged the DISCOs to stop importing meters, saying by doing that, they were boosting and developing the economies of foreign countries at Nigeria’s expense.
“The Federal Government needs to intervene in order to prevent the metering industry from collapsing. Government can compel the DISCOs to buy meters from us, the local manufacturers, because we produce quality meters.
“By doing this, the government will be promoting local- content initiatives introduced to promote the growth of indigenous business operators. At the same time, government will be helping to conserve foreign exchange,’’ Ibrahim said
Meanwhile, meter manufacturers who rely on importation may close shop due scarcity of foreign exchange.
The Managing Director and Chief Executive Officer, Mojec International Limited, a meter manufacturer, Chantelle Abdul, told journalist in Lagos that “One of our critical issues at the moment is the lack of access to foreign exchange. A lot of our manufacturing inputs rely on goods abroad. My goal as a manufacturer is to produce as much of my manufacturing input here in Nigeria.”
She noted that financing still remains a big challenge for meter manufacturers adding borrowing at double digit rate will automatically increase the price of the meter.
“Already, Nigerians are struggling to buy the meters, even the electricity distribution companies themselves. So, imagine doubling the price of the meter that already costs between N40,000 and N65,000; it means that we will not be able to bridge the metering gap that already exists in the country,” she said.