Nigeria’s electricity crisis: Is FG overwhelmed?

Nigeria’s power generation has continued to dip. In May alone, power generation fell to zero megawatt six times. This means that on those occasions no power was generated in the country.

A report released by ESI Africa, a journal that focuses on power investments in Africa, citing industry data stated that power supply to households and businesses recorded the worst output in Nigeria’s history last month.

The national grid collapsed 11 times in the first five months of 2016, compared to six and nine times for 2015 and the preceding year, adding that generation system was failing to deliver. It stated that the most recent total system collapse was recorded on June 1.

In May, Nigerian Electricity Regulatory Commission reported that only 5 out Nigeria’s 23 power plants were operational.

Nigeria’s power generation has toppled off a peak of 5,000 megawatts to less than 2,000 megawatts. Several factors have been blamed, the most common being frequent attacks by militants on gas pipelines, weak transmission lines, and poor distribution infrastructure.

There are merits in these arguments as a hybrid mix of gas to power shortages and pipeline vandalism in the Niger Delta crimped over 4,000 MW from Nigeria’s power generation in recent times.

However, some sections of the populace have begun to wonder if Babatunde Fashola, minister of power, works and housing, is not overwhelmed by the demands of three critical sectors of the economy.

In view of this, a socio-political group, Rescue Nigeria Economy Project, has advised the Federal Government to break up the Ministries of Power, Housing and Works to allow the minister focus on one.

“The president should in the interest of Nigeria do away with the idea of having a super minister. From what we have seen so far, Fashola is overwhelmed with the challenges of managing the three ministries,” said Denis Alamu-George, its executive secretary.

Recently, the Senate Committee on Power charged Fashola to live up to his responsibility. The committee expressed outrage that after forcing down a tariff increase on consumers in February that was touted as solution to the electricity crises, things have actually worsened and they are calling for a reversal of the tariff hike.

However, industry experts agree that a cost-reflective tariff is crucial to achieving reliable energy. At different forums, experts have charged the minister to focus on building institutional framework, carrying out monitoring of the activities of the industry players to ensure they operate according to extant rules.

Many argue that the power distribution companies have no moral right to demand for increased tariffs when the much-celebrated investments they promised in the sector are still a mirage. Others are calling for a revisit to the power sector reforms to renegotiate terms and agreements and restructure the process as it would seem that those who acquired the assets were better at political showmanship than the business of managing electricity.

At a recent book presentation by Opeyemi Agbaje, renowned public affairs analyst, in Lagos, Fashola unveiled his roadmap to incremental power.

He said the plan was attaining incremental power wherever it could be found, achieving steady power and ensuring uninterrupted power supply.

“We must first agree the power we have is not enough. So we need to get more. That is where we have decided to start. The people who took over the concession are maintaining and repairing the broken gas turbines and fixing aging power assets. This is first route to incremental power, overhauling the assets,” Fashola said.

He stated that government’s strategy was untangling all contractual and maintenance issues with power plants so they add to power supply available.

The next action, he said, was to ensure that power plants are located close to power sources to achieve steady power, and paying a competitive tariff required to build pipelines that will take gas to those sited far away.

He said it would be followed by diversifying Nigeria’s energy mix to achieve uninterrupted power supply.

“We have 26 power plants (including the AES plant); three of the plants are powered by water, the hydro power plants in Jebba, Kainji and Shiroro. The remainders are powered by gas.

“We have 140 turbines with installed capacity of 12,341 megawatts but at the best of times, only about 78 turbines are generating power, which gave us our peak of 5,074mw,” Fashola said.

“The problems have been identified as either damaged, unmaintained or unserviced turbines in the hydro power plants; and in the cases of gas plants, it is largely non-availability of gas, coupled with lack of maintenance,” he added.

The extent of the problem facing the sector as well as the place of strategic thinking in problem solving are clearly not lost on the minister, but mapping strategies for revamping the power sector have been a recurring decimal with every new government.

The administration of former President Goodluck Jonathan came up with a ‘Roadmap for Power Sector Reform’ that promised Nigerians 40,000 MW in six years. Fashola’s roadmap is now dangling 20,000 MW of power generation within five years at Nigerians. In the interim, Nigerians endure 1 million MW of darkness.

“Fashola’s roadmap is silent on the level of funding (including private-sector-led and other direct foreign investment) that the power sector has so far attracted. Is this data unavailable or is this a case of inability or unwillingness to gather and process data? For such vital information is a critical compass of sorts with which an interested public monitors progress in an industry,” said Calixthus Okoruwa, a public affairs analyst.

Fashola’s roadmap also did not specify how huge debts by government ministries and departments running into billions will be sorted.

“Since November 2013, PHED has supplied 4 billion kilowatt hours to customers. Sadly only 55% of this power has been paid for. More than N36billion has been lost due to non-payments,” lamented Jay McCoskey, chief executive officer, Port Harcourt Distribution Company.

“This is money needed to pay for gas supply, power generation and transmission to make electricity available to our customers. Only if all electricity supplied is paid for will the power sector survive,” said McCoskey.

According to the Association of Nigerian Electricity Distributors (ANED), the worst debtors are Federal Government and MDAs who owe close to N60bn in the debt profile released last month. Sunday Oduntan, executive director, research and advocacy of the association, gave the breakdown of the debt profile of the Nigerian Army to the distribution companies.

The Nigerian Army tops the list of debtors owing 8 out of the 11 power distributors a sum of N15 billion, much of which dates back to 2013. A breakdown shows that as at 31st December, 2015, the Army owes Benin Disco N2.3 billion, Eko Disco N1.9 billion and Ikeja Disco N1.6 billion, Jos Disco N2 billion, Kaduna Disco N6.6 billion, Kano Disco N301 million, Port Harcourt Disco N1.3 billion, and Yola Disco N435 million.

While the Central Bank of Nigeria’s support to the sector has been well received, there are critical issues in the sector but government will have to plug the gaps in the areas of capital inflows into the industry, institutional framework, compliance and investments if Fashola’s roadmap will leave the paper on which it is written.

ISAAC ANYAOGU