Power supply decline in industrial zones takes centre stage

The poor power supply situation in many industrial zones is biting hard on local manufacturers who keep asking the new electricity managers when the proverbial ‘light at the end of the tunnel’ will move from mirage to reality.

The Manufacturers Association of Nigeria (MAN) recently reported in its July to December 2013 Economic Review that power outage in industrial zones rose to 8.3 hours per day in the second quarter of 2013 (H2 2013), from 7.8 hours per day reported in the first half of the year (H1 2013).

Already, key manufacturers say energy costs on low-pour fuel oil (LPFO), gas and diesel occupy between 25 percent and 50 percent of their operating costs.

Consequently, MAN Apapa branch held a luncheon for chief executive officers (CEOs) last Thursday, with a view to understanding exactly what the new electricity managers, made up of generation and distribution companies as well as regulators, are doing to assuage their plight.

Babatunde Odunayo, chairman, MAN Apapa branch, began by raising a few questions to Sam Amadi, chairman, Nigerian Electricity Regulatory Commission (NERC).

“How do we determine 15 days of non-supply of power to the consumers, at which point the fixed charge does not become payable by the consumer? Is it cumulative? If so, who takes a record of outage? Is it for 15 consecutive days?,’’ he queried.

According to him, the general feeling is that the fixed charge should be abolished, until generation and transmission systems rise in the power delivery value chain. As many manufacturers are yet to have meters, Odunayo asked if consumers should still look for funds to make advance payment for meters when a large metering gap exists in the nation.

He thus advised the NERC to request the discos to look for funding for this purpose, to provide a platform for plugging the revenue leakages in their areas of operations, pointing out further that in spite of the rebasing, which has seen Nigeria grow to become the largest in Africa, the country had the lowest per capita energy consumption (40kw/000) in comparison to some of its peers such as Indonesia (120kilo watts (kw)/000) and South Africa (270kw/000), and that the manufacturing sector could have made more impact on the GDP if power supply had been regular.

With 660 to 700 mega watts (MW) of electricity remaining ‘stranded’ as it cannot be evacuated into the National Grid, he wondered how the country could achieve 20.3 giga watts (GW) power generation capacity by 2016 given the present unsupportive state of the transmission system.

Sam Amadi, CEO, NERC, said the present poor power services had led to insufficient job creation levels and made governments at various levels biggest employers of labour, but added that the present Federal Government understood the integrated nature of infrastructure development as against targeted development.

He reassured manufacturers that now that NERC was at advanced stages in the implementation of the National Electric Power Policy (NEPP) 2001 plan, inhibiting factors will be surmounted, leading to taking full advantage of abundant local energy sources.

Mike Uzoigwe, CEO, Egbin Power plc, wondered why the country was yet to tap into alternative energy sources, notably coal, adding that poor metering, population explosion, which leads to unplanned expansion of the grid network and system overload, as well as low transmission capacity and obsolete equipment, are key challenges facing the sector. But he assured manufacturers that with the efforts by all the players, there will soon be a remarkable difference.

ODINAKA ANUDU