Power sector: Issues FG must resolve in 2023
An analysis by Yusuf Yunus
The year 2022 was far from rosy for the power sector as it was characterised by stunted growth and the well documented failures of the transmission, generation and distribution sub-sectors.
It was glaring to all that he power sector failed to record appreciable progress, due mainly to lack of investment and managerial competence.
Needless to say that there is a nexus between the power sector and industrialisation, as adequate electricity supply is sine qua non to the growth of businesses, especially Small and Medium Enterprises (SMEs).
Nigeria’s power need is mammoth, ranging from 25,000 to 40,000 megawatts (MW) to serve its 218 million population.
However, currently the installed generating capacity is about 12,522MW, while transmission and distribution infrastructure can only deliver an average of 4,000MW to businesses and homes.
Checks by the Business Intelligence (TBI Africa) reveal that on-grid electricity supply has not reached 5,000MW despite concerted efforts by the Nigeria Electricity Regulatory Commission (NERC) to boost power supply in the country.
It will be recalled that NERC in July 2022 activated a partial power agreement with key participants in the Nigerian Electricity Supply Industry (NESI) to raise power supply to 5,500MW.
Despite that initiative, generation has remained within the 4,000MW threshold, while distribution is even lower than that.
The country’s per capita electricity usage is 136 KW/h, one of the world’s lowest. In Libya, it is 4,270 KW/h; India, 616KW/h; China, 2,944KW/h; South Africa, 4,803 KW/h; and Singapore, 8,307KW/h.
All through 2022, Nigeria’s Power industry ingloriously experienced incessant national grid collapse, Electricity Distribution Companies’ liquidation crisis and the unsuccessful National Mass Metering Project (NMMP).
Although NERC is yet to compile data on system collapse for 2022, the grid’s performance and various updates from DisCos showed that Nigeria’s power grid had collapsed about eight times by September 2022.
For instance, on Sept. 25, 2022, grid collapse occurred when power generation on the system crashed from over 3,700MW to as low as 38MW.
On July 20, 2022, Nigeria’s power grid saw the sixth collapse in 2022, while on June 13, it was also reported that the grid collapsed.
The nation’s power system collapsed twice in March (the same period TCN said it recorded a peak of 5,615.40 MW) and twice again in April 2022.
To arrest the myriad of challenges besetting the power sector, the Senate passed the Electricity Bill 2022 in July; however, President Muhammadu Buhari is yet to give assent to the bill.
Sen. Gabriel Suswam, Chairman Senate Committee on power, said the bill sought to provide an ideal legal and institutional framework for the industry, and correct the imbalances in the existing transmission infrastructure in Nigeria.
Among the power value chain, stakeholders have fingered the power distribution companies (DisCos) as most culpable in enthroning a regime of darkness in the country.
Most of the DisCos are writhing under a huge debt burden, poor balance sheet and lack of investment.
This was confirmed by the Minister of Power, Mr Abubakar Aliyu, who said nine out of the 11 DisCos were on the verge of bankruptcy.
Aliyu explained that the situation had forced the Nigerian government to mandate banks to find serious investors interested in buying its 60 per cent equity in Abuja, Kano, Kaduna, Benin, Ibadan and Port Harcourt DisCos.
Even the National Mass Metering project project, introduced in 2022, through which the Federal Government promised to provide Nigerians with free meters is yet to achieve the desired objective.
The Governor of the Central Bank of Nigeria (CBN), Mr Godwin Emefiele, had stated that the bank disbursed N47.8bn for about 865,956 meters across the country.
However, the implementation of project by DisCos and Meter Asset Providers (MAPs), has not achieved the expected result.
To change the negative narratives of the power sector, Nigerians expect the Federal Government to initiate new policies to improve power supply in 2023.
An energy expert, Mr Adamson Saliu, said to redress the colossal failure suffered by the industry in 2022, electricity transmission should be localised.
“The power sector in 2022 was a colossal failure. We have never experienced this amount of national grid collapse in Nigeria.
“It was as if the national grid was a switch that got turned on and off.
“The Transmission Company of Nigeria should be disbanded, and electricity should be localised.
“We are wasting material and financial resources in running the TCN,” he said.
Saliu said: “Why are we struggling to generate more than 5,000MW? The answer is simple.
“Mini and small electricity generating companies should be encouraged and given necessary financial assistance towards ramping up generation.
“Imagine a situation where by 2,000 mini and small companies are generating from 200MW to 2,000MW across the length and breadth of Nigeria – using the sun, water, wind and other resources.
“Regarding distribution, let the government revisit the privatisation of the DisCos one more time.
“Let competent organisations come on board, and the narrative will change drastically.
“See the telecommunication sector as a reference point,” he added.
According to him, “The DisCos are doing what they like because NERC, as the regulating body, is not effective and efficient.
“The war will continue between consumers and DisCos due to the dog-eat-dog situation between them.
“Why on earth should consumers buy poles, meters and transformers for DisCos?
“On the whole, the government should declare an emergency in the power sector and bring reputable international power generation and distribution companies to step into this critical sector.
“Without electricity, we are doomed as a nation,” he explained.
Saliu also stated that local manufacturers would continue to wallow in pain, and the economy would continue to nose-dive if urgent steps were not taken to salvage the power sector.
Mr Kola Balogun, Chairman, Momas Electricity Meter Manufacturing Company (MEMMCOL), canvassed local manufacturing and installation of prepaid meters in the second phase of NMMP, which he said could create 500,000 jobs for Nigerians.
“The President Buhari administration must be commended for initiating the NMMP because there is an urgent need to bridge the metering gap in the power sector.
“I want to appreciate the government because the intervention that came to manufacturers under the phase zero was a huge success.
“It gave manufacturers the opportunity to have a tested process in place to know their capability and capacity and what they can give to the market.
“The volume given to us was tested against the equipment, manpower and why we need to upscale further,” he said.
Mr Sina Odugbemi National Coordinator, WhereIsTheLight, advised government and the electricity regulatory bodies to be alive to their responsibility of protecting citizens from regular exploitation and take back the national assets sold to the DisCos.
“DisCos may be difficult to advise because it may be a waste of time to advise those who exploit consciously and make free money from providing no meaningful service to the majority.
“My advice to customers who are the direct victims of DisCos is to lawfully resist further exploitation through mass actions.
“Pay for services rendered and refuse to pay for darkness,” Odugbemi said.
As things stand, Nigerians can only hope that the