NIPP intervention and challenges of electricity privatisation

By Prince Okafor

Nigeria’s electricity challenges continue to worsen, as power generating, transmission and distribution companies suffer from inadequate capacity, despite investments totalling N1.5 trillion sunk in the sector since the privatisation exercise.

According to leading labour centres in the electricity sector, this staggering amount has done nothing to add a kilowatt of electricity to existing capacity since 2013.

For instance, households across the nation still experience blackouts for days, weeks, months and even years, as the eleven electricity distribution companies still reject power load, while the power sector is yet to maintain adequate spinning reserves, thus leading to persistent system collapses.

An x-ray of the nation’s power grid stability, which is a pointer to the current challenges, shows that from 2013, when the electricity privatisation process was completed, till date, the country has witnessed 131 grid collapses; a situation that experts and operators said would persist.

A breakdown shows that the nation witnessed 72 total system collapses and 52 partial collapses.

In addition, it has been tales of woes across the country, as it was gathered that power evacuation, especially in the Eastern axis, constitutes great challenges as bulk power is usually stranded within the region, mainly due to lack of adequate line capacity to evacuate Ibom and Gbarain power generation.

The Adiabor-Itu 132kV line has been out of operation for reconductoring for more than a year now, and is yet to be completed.

There is a load limitation of more than 100MW on Aba/Itu 132kV line. This calls for urgent attention.

Replacement of burnt relay/control room at Afam V 330kV T/S to enable the evacuation of power from 2 X 138MW GT19 and GT20 Afam V GS units, replacement of damaged Benin/Delta 132kV towers (Nos 41 & 42) and 150MVA 330/132kV inter bus transformer at Delta Ts that has excluded Delta 132kV and Effurun 132kV Ts from the national grid are highly recommended.

Also, Delta/Benin 132kV line needs to be provided with a turn-in/turn-out capability to enable a reliable supply of power to Amukpe 132kV T/S.

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InvestmentsOn the contrary, evidence shows that the power sector has not lacked investments across all its value chain over the years.

A breakdown of investments in the sector since 2010 shows that the World Bank, in 2010, advanced a loan of $300 million (N108.6 billion) to the country, for the Nigeria Electricity and Gas Improvement Project, NEGIP, which ended in December 2018.

The Japanese Agency for International Cooperation, JICA, gave 1.317 billion Japanese Yen or $12.4 million (about N4.5 billion) grant for the Transmission Company of Nigeria, TCN, to install capacitors and switch gears at the Apo (Abuja) and Keffi (Nasarawa State) substations in April 2018, which have been inaugurated.

The TCN also raised another $1.661 billion (N601.3 billion) multilateral loan to increase capacity through the Transmission Rehabilitation and Expansion Programme, TREP.

Irrespective of the amount spent, so far, former Executive Chairman and Chief Executive Officer of Nigeria Electricity Regulatory Commission, NERC, Dr Sam Amadi, warned that Nigeria would still suffer more system collapses because the system is irregular.

In a chat with Vanguard, Amadi said: “The national grid will always collapse from time to time, since power supply goes off and on due to several external factors.

“System collapse can only end if the necessary attention is given to it. The power system is frail and taken for granted by the regulatory board, so once there is a disturbance, collapse happens.

“Because the system is frail and it does not have enough spinning reserve to carry power when something goes off, or when everybody is on one network and there is a breach on one end, it collapses.

“It is a matter of incapacity. We do not have enough spinning reserve and redundancy, except this is fixed and we create a robust system.”

Amadi noted that there is no clarity on the total cost of system collapse. He said: “Basically there is no clarity on the accountability of system collapse, but what we planned before we left was to fix the system such that individuals bear the cost of fixing the system.

“For example, if the power system collapses due to the inability of a particular DISCO not able to take load properly, they would have to compensate other parties in the power chain for their losses.

“At this point, there is no clear monetary or financial clarity of system.”

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196 million Nigerians lack access to electricity reaching to the state of the nation’s power sector, Secretary-General of the National Union of Electricity Employees, NUEE, Joe Ajaero, lamented that the country is currently generating 4,000 megawatts, MW, or a little above that.

The global index is a million people to 1,000MW, and the people that fall under that are classified as suffering from power poverty.

If we take four million people by the global index; say 4,000MW for four million people, what we will be having is 196 million people without access to electricity.

“Former President Olusegun Obasanjo’s government spent over $16 billion trying to revive electricity.

“Then, globally, with a billion dollars, we could have 1,000 megawatts. That money could have ordinarily given Nigeria 16,000MW, assuming we did not have any pole, line or anything. But we missed it.

“Then we now moved into the Energy People Projects, EPP. At a stage, almost $11 billion was spent, down to President Goodluck Jonathan’s era. We did not have the desired results.

“After privatization in 2013, the Federal Government of Nigeria has pumped about N1.5 trillion into the private sector, as grants.

“You sold your house, and you are giving money to the buyer to paint it? N1.5 trillion, no matter how we think of it, could have given us over 20,000MW.

However, in a chat with Vanguard, the former managing director, Transmission Company of Nigeria, TCN, Mr Gur Mohammed, disclosed that the privatisation process was built not to work, as the nation sold its 60 per cent stake to unqualified investors that have no record of successful projects in the past.

According to him: “I was part of the team that started the Power Sector Reform Programme in 2007, and I was called to be the secretary of the team during President Umaru Musa Yar’Adua’s administration.

“I declined the offer because I already knew the programme would never work.

“The DISCOs accuse the TCN of being the weak link in the power chain, and its wheeling capacity was around 5,000MW but, currently, it can boast of a wheeling capacity of over 8,000MW, why are we still witnessing load rejection as inadequate poor distribution to households?”

On his part, Managing Director of Meiracopp Nigeria Limited, Dr Chijioke Mama, argued that the state of the power sector had hindered Nigeria’s manufacturing sector from attracting huge investment opportunities.

He told Energy Vanguard that “what we are seeing in Nigeria is a regrettable derailment from a previously promising trajectory, which was clearly headed towards industrialisation but, subsequently, marred by hordes of challenges and limitations.”

Vanguard News Nigeria


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