June 15, 2011

Power: Again, Lagos sets the pace in IPP

By Yemie Adeoye and Charles Kumolu

Before 1999, the National Electric Power Authority,NEPA, had the sole monopoly of power generation and distribution in Nigeria. While there were suggestions on how to break that grip, Lagos State became the first state to do so with the initiation of Enron Power Project on August 1, 2009.

Consequently, the Bola Ahmed Tinubu administration, Yinka Folawiyo Power Limited and Enron Corporation of the United States signed an agreement for an Independent Power Plant, IPP, with the Federal Government as the guarantor.

The barge-mounted electricity generating plant was to be located adjacent NEPA’s Egbin Power Station, Nigeria’s biggest power plant.

This idea later became contentious following claims that the power generated was being transmitted to the National Grid for the use of the entire country, instead of only Lagos and this bordered on alleged failure by the parties to honour contractual and business obligations.

Despite the controversy surrounding the Enron power project, the Federal Government accepted the wisdom in breaking the monopoly of NEPA, which has since rechristined itself the Power Holding Company of Nigeria, PHCN. Hence the massive construction of power plants across the country and the planned privatisation of the ailing utility giant.

The impetus for this must have been the sustained calls for uninterrupted power supply in the country. Indeed not a few Nigerians have become impatient with the government over this highly embarrassing subject matter and this anger can only be felt with a short walk through the streets of major cities and towns across the country.

Angry mobs have attacked PHCN (the nation’s power utility company) stations in the past; some have waylaid and attacked official vehicles and personnel of PHCN, some have even killed staff of the utility company over electric power interruption during football matches. The list is endless.s

Faced with a situation that has seemingly defied every proposed solution, even as they keep paying for non-existent electricity supply they can only vent their anger on these innocent government workers who apparently are also experiencing incessant power outages in their various homes.

Assurances by the Federal Government at different times of planned improvement in the nation’s power generating capacity have all ended on a note of disappointment. Lanre Babalola, a doctorate degree holder was saddled with the responsibility of overseeing the Ministry of Power under the late President Umaru Yar’Adua administration. The very articulate, soft-spoken minister told the nation that there would be available to Nigerians before the end of December 2009, 6000 megawatts of electricity. That was never achieved before he got the boot after the demise of the President. Now the Goodluck Jonathan-led Federal Government has assured Nigerians of 13,000 Mw by 2013. But if the prevailing feeling is anything to go by, only few Nigerians have any confidence that the promise in this respect will ever come to fruition.

But the Lagos State government under the leadership of Governor Babatunde Fashola has decided to join the fray by embarking on an ambitious independent power project, with a targeted delivery time of about 18 months. According to the Governor, the target time frame “makes it the fastest ever executed Independent Power Project in Nigeria”.

The project which was done in conjunction with the Negris group immediately puts out of use a minimum of 30 diesel generating sets of between 100–1,000 KVA each, eliminating the inevitable pollution, noise and carbon monoxide caused by generators.

Speaking during the commissioning, Governor Fashola noted that the regulatory framework in the country had earlier made it difficult for state participation in such projects. “As you may be aware, the regulatory and statutory framework until recently restricted the involvement and participation of state governments in the provision of electric power. This constraint extended to both generation and distribution of electricity. Happily, as from the enactment of Electric Power Sector Reform Act, ESPRA, state governments and private investors alike may now partake in the business of provision and supply of electricity.

“With the change in the legal order we are able to use our innovative abilities to discharge our responsibility as a government to provide an enabling environment for the advancement of quality life style, trade and commerce, law and order, essential social services and the growth of small scale businesses, a crucial limb to the continuous development of any economy.

“In Lagos State today, industrialisation and general improvement in income and living conditions have resulted in increased demand for electricity. Recent date reveals that the power requirements of Lagos today is estimated at about 10,000-12,000 MW. This is in sharp contrast to the less than 1,000MW available to Lagos State from the national grid.

“The death of electricity has propelled our citizens to self-help, compelling them to be generators of their own electricity, resulting in emergence of all manners of domestic power generating sets. This has resulted in very high cost of electricity which unfortunately accounts for 30 per cent of operating costs of any business.

“This has many adverse social costs that are almost limitless in their dimension, erosion of disposable income for fuel to provide power, frustrations, health hazards, security failures, unemployment and so much more. Unfortunately, the provision of electricity and the management of power remains regrettably a matter of responsibility for the Federal Government which it is yet to discharge satisfactorily.

“As a Government that cares, we have refused to fold our arms. We have constantly kept to our promise to deliver; to continue to provide for the needs of the people of Lagos State. It is in keeping to this promise and the necessity to provide a platform for the promotion of the socio-economic well-being of the people that we commissioned the construction and development of this power plant,” he said.

An elated Governor Fashola further informed that this was the third Independent power plant following the 270MW at Egbin, and the 12.5MW at Iju that the Lagos State Government is undertaking.

“As the bedrock of any development agenda, this administration has always considered the provision of stable power supply as being of the utmost priority. The provision of potable water, functional telecommunication services, security operations, traffic management, healthcare and education are all dependant on the availability of constant and stable electricity.

“Without recourse to any scientific analysis, it is without doubt that the demands for all of these services have tremendously increased in Lagos State, although we have had to improvise to provide power for their services. We have therefore by necessity become the laboratory for evolving home-grown solutions, through thinking and planning for our domestic challenges.

“We thought through the problem of powering critical public facilities like court houses and hospitals. We searched diligently for practical solutions. We subsequently found and collaborated with a reputable independent power producer. The result of that partnership is this 10MW electricity generating facility, the Island Power Project.

“The initiative of this project was induced by the necessity to consolidate the Justice Sector Reform agenda of the Lagos State Government. It was originally designed as a scheme which we tagged, “Powering Justice” proposed to supply electricity only to the Lagos State Government Court facilities in the Lagos Island axis, that is: High Court (Igbosere and Annex at TBS) and JIC Taylor Court House at Igbosere. The project was subsequently expanded to accommodate government health facilities and street lights on 20 streets along that corridor.

“This facility, built to highest global thermal operating plant standards will now provide 24 hours constant power supply to public facilities within the Lagos Island axis. The project, which includes an 18km dedicated underground distribution network, will supply power to the General Hospital (Lagos Island), the High Court, High Court Annex (TBS); JIC Taylor Court House, Igbosere; Maternity Hospital and the State House (Marina).

“The power plant will also provide electricity for the street lights on Broad Street, Tinubu Square, Bamgbose Street, Igbosere Road, Lawson Street, Moloney Street, Strachan Street, Okesuna Street, Hawley Street, Catholic Mission Street, Ganiyu Smith Street, Glover Street, Mobolaji Bank-Anthony Street, Brook Street, Joseph Street, Campos Street, Campbell Street, Ajele Street, Odunlami Street and Kakawa Street. In order to achieve this, the street lighting furniture on all of these 20 streets has been refurbished. The plant is powered by gas engines with diesel engines as backup.

“The commissioning of this plant immediately puts out of use a minimum of 30 diesel generating sets of between 100 – 1,000 KVA each, eliminating the inevitable pollution, noise and carbon monoxide caused by generators. This plant also has a vast cost-saving component to the state government of 46 per cent over project whole life cycle.

“An obvious benefit of the Island Power Project is its ability to drastically improve the reliability of power supply to the above mentioned government facilities from 35 to 100 per cent with the corresponding reduction in the operating costs and increased efficiency in this government facilities. It will also significantly improve the delivery of essential social services to the people of Lagos State.

“In a study recently carried out in the United Kingdom, it was demonstrated that street lighting is a more effective strategy of crime prevention as compared to CCTV. We expect therefore that since street lighting is an essential ingredient for improving security of any society, those streets covered by this project will only become more secure. The underlying advantage, however, is the improvement of law and order and the rejuvenation of night life economy in the axis.

“Cumulatively, the Island Power Project will be powering over 230 street light installations, 40 court rooms, eight operating theatres, a 153 chamber mortuary, 16 clinics/centres which include two HIV/AIDS clinics, two emergency centers that harbour three fully-equipped Lagos State emergency ambulances and a special babies unit.

“This project from conception to its commissioning today was undertaken in less than 18 months. This makes it the fastest ever executed Independent Power Project in Nigeria. It is also a further demonstration of the appreciation and commitment of the Government of Lagos State to the procurement and provision of infrastructure using the Public Private Partnership model.

“An interesting innovation of this project is that it comes with a 24 hour dedicated call centre for street light queries. This will ensure the immediate attention of relevant officials to issues relating to the street lights leading to the optimum utilization of the infrastructure.

“The people of Lagos State have been deprived of one of the essentials of decent living: constant, uninterrupted, affordable and clean electricity power supply for too long. This problem has its roots, amongst other things, in the lack of accurate data as to the actual power/energy requirements of the people of Lagos State. It is in view of this that the present administration in Lagos State has now embarked on a comprehensive state-wide power audit programme.