On September 12 this year (2017) Nigeria’s power production reached an all-time peak of 7,001 MW, indicating that Africa’s largest economy now has the capacity to produce more power than it can distribute.
In May last year, Babatunde Fashola, minister of Power Works, and Housing, unveiled what he called an incremental power policy as a roadmap for solving Nigeria’s intractable power crisis. The objective was to add incremental power wherever it could be found, to achieve steady power before ensuring uninterrupted power supply.
In a keynote speech at the Guardian Power Summit, held yesterday in Lagos, Fashola said that the reforms embarked on in the sector were now yielding positive outcomes, and that the next stage is to reconstitute its representation in boards of the DisCos to enhance governance.
“The result is that as at 4 September 2017 the available power that could be put on the grid was 6,619 MW (the incremental power we sought to achieve from 2069 MW in 2015); the transmission capacity was simulated at 6,700 MW (up from 5,000 MW in 2015) but the distribution capacity was 4,600 MW which was what was put on the grid. On September 12, 2017, production of power reached an all-time level of 7,001 MW,” said Fashola.
The minister said this is evidence-based progress, “because we now produce more power then we can distribute. This does not mean that we have enough yet. It means that policies are working, but all the problems are not resolved.”
However, for Nigeria with an estimated population of 180million, 7,000MW of generating capacity scarcely seem like an achievement, especially when South Africa, with less than 50 million people generates close to 40,000 MW. But Nigeria’s power generation was at abysmal 2,000MW levels when this administration came on board in May 2015.
“The distribution capacity existing at around 750 33/KV trading points, from where power is received by the DisCos and sent to us, was about 4,000 MW. Clearly, the power then being generated at 2,690 MW was not up to the transmission capacity of 5,000 MW and was insufficient to fully optimise the distribution capacity of 4,000 MW,” Fashola said.
Fashola also listed other achievements of the government as including engagement with aggrieved communities where attacks were taking place, to restore peace, repair of damaged gas pipelines and gradually restoration of gas supply.
The former Lagos State governor’s management of the power ministry had been one of the most tumultuous. Barely three months in the saddle, power generation rose to 5,000MW which was attributed to President Buhari’s body language.
In the same months, Niger Delta militants, calling themselves, Niger Delta Avengers, blew up the Forcados pipeline and knocked out about 3,000MW of power, along with over 250,000 barrels per day supply of crude oil. Nigeria was thrown into darkness, the economy sank into a harrowing recession.
Worse still, the DisCos began to flagrantly violate market rules, failing to pay other operators in the value chain.
“The biggest challenge in the electricity market is that the rules are not being followed, the DisCos are violating the rules and NBET, which is the market operator, has failed to call them to order,” said Chuks Nwani, an energy lawyer, in a previous comment to BusinessDay.
The core investors who bought power assets, failed to invest in the distribution network and could not even provide meters. GenCos could not pay their gas suppliers, who turned off the taps and the nation began to marinate in darkness.
In March, the Federal Government draw up a Power Sector Recovery Implementation Programme (PSRIP) to raise $7.6 billion funding over the next five years, through loans from the World Bank Group, the African Development bank (AfDB) and sale of the National Integrated Power Plants (NIPPs) to rescue the ailing power sector and reverse an economic loss of $29.3 billion yearly, due to inadequate power.
The PSRIP highlights a series of policy actions, operational and financial interventions to be implemented by the Federal Government of Nigeria to attain financial viability of the power sector and reset the Nigerian Electricity Supply Industry (NESI).
Fashola said that since the launch of the PSRIP, the government had been working to implement policies that will improve liquidity in electricity market, has declared eligible customer and is awarding contracts to expand the transmission grid.
“Therefore, one of the decisions under the Power Sector Recovery Programme, is the enhancement of governance, like the constitution of NERC, who have issued regulations to guide the development and deployment of mini grids of 100 KW -1 MW which will help distribution as they come on stream.
“Another decision is to strengthen the governance of DisCos by reconstituting our board representation in all the discos, a process that is also underway. Next, is the implementation of eligible customers, which is awaiting the finalisation of regulations by NERC, based on consultations with stakeholders.”
Fashola said the government is looking at licensing some private power plants which have generation licenses and excess power, but no distribution license, to grant them permits to willing buyers, especially in industrial clusters, under regulations made by NERC,” said Fashola.
ISAAC ANYAOGU
