The Nigeria’s electricity industry since its privatisation in November 2013 has been bedevilled by a plethora of challenges, which have hampered regular power supply to homes and businesses.
Expectations were that the power privatisation would address holistically the tepid electricity situation in Nigeria, and usher in a new era of steady power supply, but, these expectations have not been met as electricity is still in short supply, more than five years after power sector privatisation.
It turned out that private investors who bought the assets of the defunct Power Holding Company of Nigeria (PHCN) under the federal government’s power privatisation programme were mostly cronies of the then government in power, who lacked both technical and financial capacities to operate, manage and ramp up value for the assets they purchased.
With their hopes dashed, business owners and other Nigerians now rely solely on generating sets and alternative energy sources, even as major stakeholders in the electricity value chain have resorted to buck passing, which can only worsen the already bad situation.
Amidst the low levels of electricity supply, electricity distribution companies have continued to issue outrageously high levels of estimated electricity bills to customers despite repeated sanctions by the sector authorities.
Last month, the Transmission Company of Nigeria (TCN) announced that the nation’s power generation had dropped to 2,290MW, from 4,500MW, following a loss of 1,598MW, owing to gas pipeline vandalism. Generation, which rose to 3888MW after authorities fixed the problem, dropped to 3,838MW between July 12 and 18.
The report also revealed that about 2,990MW could not be generated owing to inadequate gas supply, poor distribution facilities, transmission network limitations and water management constraints, while a total amount of money lost on account of this was put at N12.171 billion.
With the recalcitrant attitude of the investors and seeming inability of power sector authorities to get the investors adhere to the terms of agreement reached with the government, the question on the lips of Nigerians is when will this energy crisis, which has become a major hindrance to economic growth and development be resolved.
Whereas the federal government has constantly accused the investors of failing to adhere strictly to the conditions stipulated in the power privatisation programme, the investors on their part, insist that the government has failed in its responsibilities especially in the area of gas supply and grid instability caused by weak transmission infrastructure.
Also, the Transmission Company of Nigeria (TCN), which is still under the control of the federal government, accuses the Discos of rejecting power allocated to them. But the Discos in turn blame their inability to deliver steady electricity to consumers on huge indebtedness by electricity users, particularly government establishments, stealing of electricity, vandalism and poor quality of infrastructures to mention but a few.
Similarly, the Gencos claim the Nigerian Electricity Bulk Trading Plc (NBET), do not pay for the power generated, while the NBET on its part shifts the blame to the recalcitrant financial attitudes of the Discos to statutory payments for electricity it sold to them. The bulk trader claims it owes the Gencos because the Discos fail to pay it for electricity sold to them. The amount owed the NBET is said to be in the region of N800 billion.
At a meeting in Abuja last year, convened by the Market Operator of TCN, major stakeholders, who were in attendance, had resolved to put the blame game behind and start appropriate action that will build robust synergy towards delivering improved electricity to homes and businesses. Recent developments, particularly the last week’s media war between the power minister and the investors is a pointer that the blame game is far from being over.
Apparently pissed off by the sector’s abysmal performance, Minister of Power, Works and Housing, Mr. Babatunde Fashola, recently charged all stakeholders to eschew blame game and instead adhere strictly to all conditions in their contract with federal government, as failure to do so will attract sanction.
Fashola, who also reminded the investors that they were well aware of opportunities and challenges before entering into the agreement with federal government, said the government was prepared to implement all conditions stipulated in the contracts, it signed with the investors in the sector.
On the issue of un-utilised load, which had been identified as the cause of high system frequency on the national grid, stakeholders at the meeting had resolved to take necessary steps to address the problem.
To that end, the TCN had pledged its commitment to expanding transmission infrastructure and improving its operation and performance within the power sector value chain. The Nigerian Electricity Regulatory Commission on its part, vowed to be fair but firm in its regulatory duties by enforcing Discos’ metering commitments, prepaid meters for MDAs, centralised management of market revenues collected from all customers, among others.
Also, at a recent meeting with power sector operators in Jos, Plateau State, the minister, apparently dissatisfied with the Discos’ poor performances, again reminded the firms that government did not force the assets on them.
Fashola said: “You must do more to improve service, rather than complain about old infrastructure. I wish to remind you that nobody forced you to buy those assets and you knew what you were buying. “The N701.9 billion intervention fund is consistent with government’s policy and determination to enable businesses flourish, and it was intended to save the Gencos, the gas companies and their financiers who were providing service, from collapse.”
Fashola had also berated the distribution companies’ media campaign against the government’s support at ensuring a vibrant power sector.
“Your statement did not tell members of the public that these companies were not getting paid because you were not remitting all you should remit to NBET and the market operator, admittedly because of reasons that are partly and not partly your fault”, he said.
Fashola’s assertions had pitched him against the power distribution firms. For pointing out the lapses on their part, the 11 Discos, last week launched a media campaign against the minister, accusing him of “consistently promoting policies that had resulted in sector-wide confusion, infringed on the responsibilities of the various sector players.”
But in a swift response, Fashola said the Discos’ media attack on him, followed government’s resolve to get them to live by the terms of their service agreements.
The minister said in a statement he personally signed that the Discos were particularly aggrieved that he directed the NERC to take up regulatory actions to get the Discos to do their jobs.
Also, the minister lambasted the Executive Director, Research and Advocacy of the Association of Nigerian Electricity Distributors (ANED), Mr. Sunday Oduntan, who he called an interloper.
“My directives on improved service delivery in the power sector went to legal entities, not to an interloper”, the minister had said.
Apparently not deterred by the discos’ media war, the minister urged them to consider the merits of his directives and not consider his person in their consideration of the development.
He asserted: “My directives seek to rectify these problems because I believe they can be rectified. If Oduntan truly speaks for the Discos, which I doubt, he should ignore the messenger (Fashola) and advise those for whom he acts as surrogate, to focus on the message.
“The message is simple: electricity consumers (which include Fashola), want better service; NBET wants its money – about N800 billion, so she can pay Gencos. If Discos can prove that FGN owes more than what we admit, they should deduct N72 billion from N800 billion and pay the remaining N728 billion which they owe NBET.
“Discos should respond to the query from the Ministry of Power, Works and Housing as to why 408 feeders, which have a capacity to deliver 5,756MW of power to consumers only carry 444MW because of faulty lines, bad equipment and load shedding?.”
But industry watchers have expressed their dismay at this ugly development, positing that the notion that Nigeria’s electricity sector problems can be solved by placing blame is unproductive at best and detrimental to success at worse.
The blame game seeks to remove responsibility from one stakeholder and place it squarely on the shoulders of another. This impairs the discourse about how to move the sector forward. Once we remove the compulsion to point fingers, we can get to the real work of fixing what is broken.
PETAN Chair Harps on Gains of WAIPEC
Chairman of Petroleum Technology Association of Nigeria (PETAN), Mr. Bank-Anthony Okoroafor has described the West African International Petroleum Exhibition and Conference (WAIPEC) as an integrated platform that combines plenary conference programmes with a series of solutions to ensure that all participants in the Nigerian Oil & Gas community can continue to share views, develop partnerships and attract investment
The third edition of WAIPEC), the widest and largest gathering of oil industry players in West Africa will hold from 23-24 January 2019.
PETAN said in a statement that the choice of Lagos as venue of the conference followed the huge positive feedback from the second edition which took place in February last year.
“WAIPEC stands as not only the largest event in the centre of Nigeria’s oil and gas hub, but also the only truly industry-led event, held in partnership with the country’s petroleum sector, a statement from the organisers read.
It added: “Its content and proceedings are driven by an esteemed steering committee and speakers, representing a cross section of key stakeholders and the most senior representatives from the West African oil and gas industry, delivering high level strategic sessions and discussions on game changing solutions, combined with an international exhibition.”
Now the biggest industry event for the region, more than 6000 visitors with business interests throughout Nigeria and the West Africa region took part in the 2nd WAIPEC in 2018. The world-class conference fielded 50 industry leaders and global experts on an insightful programme which was held alongside the exhibition with 83 companies showcasing their products and services and generating meetings with thousands of invested industry professionals.
“WAIPEC’S mission is to promote the region’s oil and gas industry, seek best practice, explore new technologies and develop commercial opportunities for business and international investment.
Building on the success of its previous two editions, the programme will again be driven by an esteemed steering committee of key stakeholders from across the industry.
Through topical debates and speaker sessions, WAIPEC 2019 will offer direct access to the primary stakeholders and key players in Nigerian and West African supply and value chains. Across two days, speakers and delegates will have the opportunity to participate within business, technical and special focus sessions, providing critical insights into Nigeria and West Africa’s hydrocarbon businesses.”