Waiting for Stable Power Supply

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Chinedu Nebo, Minister of Power

Electricity consumers in Nigeria are still waiting and hoping for an improved power supply situation seven months after private sector investors took over as new owners of PHCN successor companies

By Anayo Ezugwu  |  May 12, 2014 @ 01:00 GMT

SEVEN months after private investors took over the generation and distribution companies of the defunct Power Holding Company of Nigeria, PHCN, Nigerians are now experiencing longer durations of power outages. The situation has gone from bad to worse in most parts of the country as electricity consumers in majors cities in Nigeria often witness several days of total blackout.

Investigation by Realnews has revealed that the distribution network which the core investors inherited from the PHCN had totally collapsed and that its revamping would take some time and more funds to bring it to the expected level. Without this, it will be difficult for the distribution companies to distribute power to the consumers.

Worried by this development, the federal government has directed all contractors handling the National Integrated Power Projects, NIPP, to hand over their projects whether completed or uncompleted in the first week of June this year. Those completed will be commissioned immediately to increase power supply in the country. Projects taken back from failed contractors will be evaluated and re-awarded while the affected contractors will be blacklisted and banned from handling power contracts anywhere in the country.

Although the federal government is working behind the scene to improve power supply situation in the country, it is very difficult for some Nigerians to appreciate its efforts because they are anxious for quick action based on repeated assurances from the government that power generation has improved. Realnews investigation has revealed that even if power generation has improved, the effect cannot be felt if the distribution network still remains comatose.

The power sector had, in Apri, l admitted that the current epileptic power situation in the country cannot be addressed within the coming months, as it is currently handicapped by a lot of challenges. The obviously worsening power situation, made the federal government to give power distribution contractors 60 days to complete their various power project contracts or risk the termination of the contract. Namadi Sambo, Vice-President, on April 4, made the position of the government known when he met with key officials of transmission and distribution companies at the presidential villa in Abuja.

He also mandated James Olotu, managing director, Niger Delta Power Holding Company, NDPHC, to communicate to the contractors the need to fast tract work on the projects or face the consequences. Sambo equally disclosed that government was ready to assist the new owners to acquire transformers to enable them distribute power if the need arises.

He said the companies would buy the transformers from the ministry of power, while payment would be spread over a period of fifteen years. He directed stakeholders to also submit their plans on delivering energy metering within one week. According to Sambo, the meeting was conveyed to review the power supply situation in the country and essentially to work out strategies through which government’s investment through the NDPHC in terms of various assets at the distribution level could be completed and transferred to the discos at a price to be determined later.

Sambo
Sambo

In order to solve most of the challenges confronting the new owners, the vice president directed the transmission, distribution and Niger Delta Power companies to meet and solve the problems facing their operations, especially that of load shedding in  parts of the country. He decried the vandalisation of gas pipeline which, he said, was an act of sabotage that has resulted to power outage being experienced nationwide.

Apart from poor distribution network, frequent drops in power generation capacity have also complicated the epileptic electricity supply situation in the last few months. For instance, in the first quarter of 2014, power generation dropped to as low as 2,900MW from about 3,200MW, which was obtainable as at last year.

Meanwhile, the Presidential Task Force on Power, PTFP, has said that the country may lose 1,200 megawatts this year if the contractor handling the three key National Integrated Power Projects fails to meet the stipulated completion target in the third quarter of the year,. Although the PTFP had given marching orders to the contractor, Rockson Engineering Limited, it explained that unless the projects were inaugurated and put into commercial use, the target of 6,000MW electricity generation by December this year might not be realised.

Beks Dagogo-Jack, chairman, PTFP, had on Tuesday, April 1, held a meeting with the contractor executing critical generation and transmission projects located in the eastern axis of the national gas grid for the NIPP. He said the meeting focused on three power generation projects located at Alaoji in Abia State, Omoku in Rivers State, and Gbarain in Bayelsa State.

Dagogo-Jack noted that a major transmission project, which provides the key evacuation corridor for wheeling power from the plants to connect to the national grid at Onitsha, was also being handled by the same contractor. “Accordingly, unless these projects are inaugurated and put into commercial operations by the end of quarter three of this year, we shall suffer a serious shortfall in our power supply projections by as much as 1,200MW. This will significantly impact our set national on-grid supply target threshold of 6,000MW by December 2014,” he said.

Dagogo-Jack explained to the contractor the critical importance of the projects to the overall power growth projections of the federal government. The PTFP chairman said while there were acute gas constraints in the western axis of the gas grid, there were currently some appreciable gas volumes on the eastern axis awaiting the completion of the eastern power plants.

Speaking at the seventh Lagos Economic Summit 2014 in Lagos, the new private sector operators said Nigerians should exercise patience as fixing the decay in the power sector will not happen overnight. According to the operators, they were beset with myriad challenges of power generation, infrastructure, revenue collection, appropriate pricing and gas supply, among others.

Funke Osibodu, chief executive officer, Benin Electricity Distribution Company, BEDC, said that Nigerians have to realise that the change that is expected would require the assistance of everyone. She noted that the operators were aware that Nigerians were fed up with the power situation and wanted to see a change.

According to her, fixing the problems in the power sector was a long term effort. “Nigerians should be made aware that infrastructure is not power. The government and some politicians will donate transformers to a community and they will think their power problems are over. We should know that transformer is not power. Power has to be generated first before the transformer and other equipment can distribute,” she said.

Sam Amadi, chairman, Nigerian Electricity Regulatory Commission, NERC, who was represented at the summit by Eyo Ekpo, commissioner in charge of market rates and competition, NERC, called for patience among Nigerians while giving an assurance that the problems bedevilling the sector would be addressed soon.

On his part, Muda Yusuf, director-general, Lagos Chamber of Commerce and Industry, LCCI, called on the NERC, to urgently address growing concerns over the issue of outrageous bills to consumers, particularly the Small and Medium Scale Enterprises, SMEs, noting that most time, these firms never received the power supply they are compelled to pay for. According to him, the problems stem from the fact that there was apparently an underestimation of the challenges of reforming the power sector, labour issues, gas availability, transmission capacity, generation capacity, quality of assets, security of assets, and manpower among others.

“To make progress in the power sector reform, labour issues should be comprehensively addressed; risk mitigation provisions in the reform process must be reinforced and reaffirmed to inspire investors’ confidence. Gas sector reform must be put firmly on course to ensure the sustainability of the gas to power programme; security in the Niger Delta that would ensure regular access to gas supply. Government should realise that the power sector is not just a business issue, but also a development issue. It has implications for job creation, welfare of citizens, growth of small business, poverty alleviation, agricultural development, sectoral linkages among others. Government still needs to provide support to investors in the sector because of its strategic importance for development. Government should support the investors to further mitigate the risk of the various investments in the sector,” he said.

The current situation in the power sector is a confirmation that Nigerians will continue to live in darkness, to which many have become accustomed to. As it stands, Nigerians’ hope of enjoying improved electricity supply in the near future in line with promises by the President Goodluck Jonathan’s administration following the takeover of the distribution and generation sub-sector, have been dashed.

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