‘Nigeria’s power network is not fully enabled to allow for digital grids’

Siemens Limited is systematically providing solutions to the power sector problems in Nigeria. In this interview with select journalists on the sideline of an energy management programme in Lagos, Onyeche Tifase, Siemens managing director, explains the technical solutions they offer operators and their future plans for the power sector. KELECHI EWUZIE was there. Excerpt:

In the context of the energy management for your company, how important is this to the power sector in Nigeria today?

Nigeria is facing challenges with the power sector and most of this has to do with supply and distribution/delivery of power. Siemens limited decided to put together this energy management programme to deal with the transmission and distribution of power and how we can make that more efficient and competitive.

The mandate of programme like this is to also proffer solutions that would ensure Nigeria have more intelligent, sustainable, affordable power transmission.

At the end we are hoping to basically support companies like the discos, utilities, industries and households to maintain and sustain a more profitable outcome and enhance the revenue flow space.

What is the plan for digital grids?

Nigeria is still in a phase where we are using a lot of mechanical solutions or basic automation solutions in our power networks. When we are talking smart grids, you really need to have a network that is completely and fully enabled to send and receive information.

The network in Nigeria has not being fully enabled to allow for digital communication that is why you don’t see them rolled out. It would be senseless if you are not able to send and receive information, that means you have to have being able to deploy certain devices across the entire distribution infrastructure and we don’t have that in place now.

How ripe are we for Digitalisation?

Nigeria is not matured for digitalisation. Digitalisation is critical for any country, but you have to progress towards it with a plan in place on how to enable the networks; there has to be investments made. Those investments have to be precipitated by the fact that you are making a profit and reinvesting it into developing your network.

The basic issue that the Nigeria system has its cash flow issues and this has limited the discos from investing according to their five years strategy plans on how they were going to deploy their CAPEX and OPEX.

What is the key aspect of Siemens interventions in the power sector?

At Siemens, we give value for money. If a customer wants a certain outcome, they would be able to achieve that with our solutions.

At some point, you may not be talking about money. Customers may want to digitalise their grids or they want to be fast and transparent in terms of performance of the grids, you would have to invest in that.

If there is any client who wants a grid that would last for decades, they can come to Siemens and we give them something that fits into their total cost of ownership. So this is not just about the cost of a single product, but about solutions and how they work for the clients and add value in the long run.

We are constantly dialoguing with the Discos and we have two discos where we are investing our funds in enabling transparency of the grids, power system studies where we study their networks, map them and provide a sort of an outlook for them.

With this outlook we can advise and let them know that in the next 5, 10 or 15 years, this is what these discos should do if they want to achieve a certain outcome regarding efficiency, profitability, operation ability of the grids.

We can even look at generation and suggest ways to support the companies to ramp up generation. We heard of embedded power generation. We look at how we can help by co-investing in generation and upgrading systems.

Again the issues hampering the power sector are end to end, they don’t just start with the discos or ends with them, but also the consumers. The discos are charging less for power that is produced.

What we are trying to do in Siemens is to look across the entire system and see how we can increase efficiency in the entire generation, distribution grid including metering and take it all the way down to revenue collection.

We look at how we can support as Siemens from the investment side, from technical adviser side, from a partnership side and for that we are talking to all the stakeholders along the value chain, be it the Gencos, TCN or Discos.

How do you cope with liquidity challenge?

Again, you have to look at the entire value chain, how power sector operators can optimise generation, transmission and distribution. How can they have regulations and policies that enable power sector operators make profit? When Nigeria has a policy where NERC issues a tariff that is not viable or cost reflective, then the discos is stuck with charging customers based on that.

At Siemens, we are trying to engage with stakeholders across the value chain to see where we can achieve some quick wins and areas we can support the discos to see how to resolve the liquidity issue in the sector.

Basically, what all the gencos and discos are asking from government is the right regulations and policy. The operators don’t even need money to thrive because there are people who are willing to plug fund into the discos as they are now if they know they would still be able to generate a profit.

KELECHI EWUZIE