Continues from last Friday
WHAT I do is to round geo-political zones, work will national orientation agencies, civil society organizations. I have been to Lagos no fewer than six times.
It’s either we have power consumer assemblies or we are convening special meetings with estate developers and residents for making enquiries into this issue of estimation because it’s one of the biggest issues.
We use this information as feedback to go and sit with our colleagues in Abuja to design policies and one of the policies we designed is pre-paid meters. The preferred means of metering is pre-paid meters because if you don’t have light your meter will not run.
Cost of metering
Nobody will come and cut your light. We have given a target of eighteen months from June 1 this year and the cost of metering has been factored in. We brought all the distribution companies to Abuja, asked them to show us how they are billing people and there is no standard way even officially talk less of on the lower level where they are planning bills anyhow.
If you pay them something next month then your bill will come down and when the guy is broke he will come with a bigger bill. There is a standard methodology for which any customer will be billed or does not have a meter and you can challenge it. We are opening offices for customer complaints. We had opened an office here in Alausa in September. Even the governor was with us.
It’s called the Forum Office. We have one in Eko, which has been in existence for a few years. People that felt their complaints have not been addressed can go to the forum and I can assure you membership is independent, credible people from the area.
We have membership from the Manufacturers Association of Nigeria, representative of the Chambers of Commerce, Nigerian Society of Engineers, an NGO and another nominee who is resident there. We are hoping we can have them across the country
Customer service is a key aspect of any service you are giving. Out of the power generated in Nigeria about 25%of the very little comes from natural gas like Egbin which is the biggest in the country generating to full capacity about 1, 320MW but as at yesterday they were only able to generate about 500-600MW so you can see the inefficiency but there is another company, a private company with installed capacity of 200MW. There is no day I open my chart they don’t generate more than 200. Egbin hardly meets 50% of capacity.
Hence your belief in private sector intervention.
Exactly. If you look at Shell they have a 660MW plant at Afam. Constantly they are generating about 490MW everyday and they are not able to make it to the grid because they don’t have the lines. Agip has 250. If you look at their track over a year they generate almost that 250 throughout. If you look at our own station it might not be operative even for one year because of inefficiency and corruption.
Coming back to you Abel, we have issues with Kainji because we do not control the waters that come in. In the whole world today apart from Germany, Nigeria has the best wholesale tariff/trailer power generation.
For Egbin, 9,600/MW is what they get when they generate a hundred MW. If you install a solar plant for every MW you will get N57,000. So having a balance of energy- gas, hydro, solar, wind- is what a country would want but we are a country that has abundant natural gas. We can utilize that gas to generate electricity for ourselves but we don’t have sufficient turn out.
There is a huge, huge gap as Seye mentioned and no government can resolve it on its own. It requires other stakeholders’, a lot of private capital which is not even available in Nigeria so you must have the right kind of environment to attract foreign direct investment.
Does that answer your question?
It throws more light on the direction. There are enormous opportunities. We have cost efficient solar power systems. You consume from what you generate. If you generate excess you can always channel back
As Mr. Bassir said there is a lot of waste when people are generating electricity for themselves and it is important to have community projects whereby these wastes can be minimized.
Let’s talk first of the commercial, what percentage of your business cost comes from power?
From the feedback we receive it is about 30%
Engr. Alomo and Mr. Kayode, do you really believe alternative energy is cheaper realistically?
It’s not cheaper . Relative to conventional energy that is NEPA
Even now with the increased tariff?
Yes. The cost of battery, which is approximately 50,000 per 12V 200amps. One of the reasons that it is so high is the cost of duty.
If government can cut down on cost of duty…bringing battery from either Asia should attract less duty if we want alternative energy to be encouraged.
Kayode, I don’t quite agree with you that alternative power source is not relatively cheap. I will take it from this angle. Looking at either wind, solar, biomass- they are still the major options. Here in Africa what we see of alternative power source is majorly demonstration or just mere deployment while in advanced countries it is renewable technology development.
There is a huge gap between Renewable Technology Development (RTD) and demonstration or mere deployment. A lot of people are not aware of RTD at all. Take for example a research commissioned by the European Union for over 74 countries across Asia, Latin America, Africa and other parts of the world revealed that in Africa we only indulging in demonstration. The solar radiation on a daily basis if well harnessed is more than the energy we require in the whole world for annual consumption.
But we are talking about cost.
Yes. Take for example I-beta-pass-my-neighbour. 1000W. If you use an average of N300 to N500 fuel on a daily basis. If you must run that generator for 365 days what does it amount to? If you have a 1KVA inverter and rechargeable 200W solar panel with just normal 200W battery will consistently give you 24/7 equivalent load which you use the I-beta-pass-my-neighbour to run for more than two, three years.
I thought you were going to talk about the initial cost.
If you calculate the cost factor of N300 of daily fuel consumption for 365 days and the cost to produce just a 1KVA inverter.
Let me give you an analogy. It is like somebody who wants to live in Ikotun and somebody who wants to live in Surulere.
The amount of money you use to come to work here can even be less but you might not have the money to get a house in Surulere immediately. That is the same thing.
He has a very good point because we are also not looking at the after effects of these things we are putting in place: pollution. The pollution effect of using the generator outweighs the advantage and the after effects. We are talking about cancer.
The fact remains that it will give you far more benefit than the normal generator. There are so many ways to it. You can divide the cost.
An area that is of particular interest to me in this discussion is that of government policy regarding being able to generate electricity. We all generate electricity, anyway. An example is the Enron matter with the Tinubu administration some years ago which caused a huge furore which was to be the beginning of the political cold war between the administration and the then Obasanjo administration. Is there really an active policy in place.
We have a regulatory framework which is one of the best in the world that encourages renewable energy development in Nigeria. Government will come up with the Renewable Energy Master plan just as we have been talking about gas master plan in Nigeria. I agree renewable energy will be cheaper on the long run not medium term because of the high capital investment required.
If we had a single digit people can borrow over a long term and it will be more competition. If we look at places like Canada, I have been to a house where they have solar panels, they have what they call a smart grid. When energy is generated they utilize in the house. When they don’t utilize it goes back to the grid and they sell it. Sometimes they utilize everything. Sometimes they even earn money. Our grid is not yet even standard talk less of being smart but we hope with the private sector-led part of it we will start improving. It is the story of telecoms.
When we have PHCN as we do today, the biggest challenge is that of inefficiency and corruption. Wherever they can hide and make more money they will, we know that. There is a rule making process that everybody must follow. If they try that they must answer your complaint within 14 days. If they don’t do it we can penalize them, we can sanction them.
Just like CBN.So also will be the new operators. The company must have certain number of years, the back ground , the experience, key management. We are what NCC is to telecoms and CBN to the banking sector.
We need decentralization. I for one think that energy should be decentralized and businesses should be allowed to have a framework of their own because you are not talking about a country like Togo or Ghana. Nigeria is a very big country and in order to try and get to the nooks and crannies of this country we need decentralization.
When you are talking about gas flaring, Nigeria at one time gave the multinationals a date to stop and that was not the case. They are still flaring. Why can’t they sanction them? Go to all the filling stations; it’s N97, but some people are selling it for 110. I’ve just put up a petition to DPR against about three filling stations but the thing is that DPR itself is not even helping matters. .
Wale, I must tell you clearly the electric power sector reform is very different. We are not as big as America, which has what we call FERC (Federal Energy Regulatory Commission). If you go to the US each state has its own utility regulatory commission. If you go to DC they have the DC Public Utilities Commission.
They regulate telecoms, water, gas, sometimes transportation all in one. You mentioned gas flaring. The petroleum industry in Nigeria is a different animal on its own. DPR as far as I am concerned is part of the ministry of petroleum. We are not part of the ministry of Power; we are independent, we were appointed by the president, we have five-year term. We were screened and cleared by the National Assembly, we report to the National Assembly and the president.
That’s why if we don’t agree with the position of any minister we can come out and say so and that’s the way an independent regulatory agency should be run. DPR Director can never come and say “no” to the minister- the next day the person is out and they are supposed to be the regulators of the petroleum sector.
The worry about regulation is I think quite valid also from the perspective of the private sector from the investing community or the investing class. There will be minor reviews every six months and major reviews and the tariffs will be revised upwards or downwards as necessary. The downward, we will wait for.
We won’t know the effectiveness of the regulator until the regulator has to raise the tariff and the president makes a strong political push against it because it might not be in the government’s interest. It is only when we get to that point that we will know the value of the regulator. Judging from the quality of Dr. (Abba), I know Dr. Amadi, I know quite a few of the people there, they are very well trained, international class, the rules are quite clear, they conduct themselves in a very good way.
We should be reducing by a little before the end of this year. Where we needed to say no to even the powers that be I can assure you we said no and we will continue to say no and we know nothing will happen because of the nature of independence.
Nature of independence
If nobody I can vouch for my chairman. He is renowned, he is in the media, a very vocal person; and so far even in the media I have never heard anything negative and that’s the culture of the commission.
We have expended a lot of resources in training our staff. No matter what we are going to do the right thing for this country. It affects our families. Even the NEPA people, the things they are doing affect us.
If we don’t get it right now I don’t think we can get it right. There is this issue of the states partnering together to bid and at the end of the day it was given to some private individuals and the states started shouting that they were outsmarted. I felt that states coming together to bid should be in the interest of government because it will be their own.