Date Published: 07/09/09
Unity Forum (Peace, Unity and Progress Association)
Suite 207, APC Plaza, Nr. 13 Cape Town Street, Off IBB Way, Zone 4, Wuse District, Abuja
NIGERIA POWER PROBLEMS CAN BE SOLVED – UNITY FORUM
At its meeting of Wednesday July 2, 2009, the Unity Forum reviewed the persistent power problem in Nigeria including the efforts of various regimes, various policies, programmes and projects involving enormous amount of money. The Forum further reviewed the maiden speech of Mr President, the Seven-Point agenda and the promised declaration of a state of emergency on power. It came to the conclusion that the public sector alone has limitation as the sole source of the solution. The existing structure is inadequate and needs to be expanded on a continuous basis for a period of time to come. All sources that will augment the generating capacity, which is currently far from adequate, must be explored. Our transmission capacity is weak with considerable grid waste. Lots of energy is lost from the distance generating points of Kainji, Jebba and Shiroro Dams or the Delta, Afam, Egbin and other Gas plants. They are located hundreds of kilometres away from our mega cities and industrial centres. The distribution infrastructure is porous. The pricing is inappropriate and peoples attitude wasteful.
To achieve any meaningful progress, government has set up the appropriate framework and the institutions that will facilitate and regulate private sector involvement. The government has hastened the implementation of the power reform act by establishing the National Electric Power Regulatory Agency and the Rural Electrification Agency. The Power Holding Company of Nigeria has been unbundled and the components are positioned for privatisation or commercialisation. Generation plants are slated for privatisation so that they can be efficiently run and maintained. The distribution networks are prepared for concessioning while the state for now would retain the transmission grid for security and strategic reasons.
Inspite of all these efforts, there seems to be no visible progress. The Unity Forum therefore looked into so many options including medium and small scale power plants that will generate between 15 and 45 mega watts localised off-grid systems. These plants are small in nature, easy to manage, pollute less and environmental friendly. In localised generation consideration must be given to proximity to the consumers, available raw materials and local factors to decide on the nature and type of power plant to be put in place. Modern technology makes it possible to derive energy from solar, wind, thermal (using wet gas, treated gas and wet fuel), waste and sewage.
The Forum further looked into the Danish model where farmers are encouraged to produce electricity for their requirement and sell the excess to the grid, this will improve power gap at least at the rural level. In doing so, they do not only produce electricity, but produce fertilizer too, which help in retaining the top alluvial soil without the negative impact, associated with chemical fertilizer, to the environment. This will also bring about economic empowerment to the Nigerian farmer and his locality. Waste from cities like Abuja, Port Harcourt, Kano and Lagos can come in handy and can augment 20% to 40% of the electricity demand. This will be in addition solving the problem of environmental sanitation by recycle waste, producing kerosene, fertilizer, and other bye-products for sale in the local market.
With a population of over 120 million, about 10 million households and an ever-growing industrial and commercial environment, Nigeria provides an attractive abode for genuine private investors in the energy market. Furthermore with the pooling of the West African power (WAPP), the enormous hydro, solar and wind energy potentials and the abundance of affordable natural gas, makes Nigeria attractive in the power business venture. The captive markets will not only be the huge Local demand but also the West African sub-region as a whole. It is expected therefore that the private sector should be encouraged to come in and complement government’s effort initially and eventually take over the electricity market.
The government, in addition to the current effort, should do the following;
- Review and modify the laws governing power production, distribution and marketing in Nigeria. The changes will encourage foreign and local investors who are willing to bring in their capital and technical know- how in a Public Private Partnership (PPP) or direct investment projects.
- Liberalizing the electric power market, encouraging private funding by lowering market entry point, effect the unbundling of power company and introduction of cost reflective tariffs payment.
- Continue the rehabilitation and the expansion of the critical infrastructure for the next few years. This is because over 80% of the existing infrastructure is aging (over 20 years old). This can be disposed off to interested private investors at the appropriate time.
- Give additional incentive to interested private players by introducing a level play field and others like tax holiday etc to encourage new entrants. The current supply is between 20% and 25% of the actual demand, indicating a huge market.
- Develop national gas grid to decongest the new generation capacity, which is currently clustered around the gas wells in the delta region instead of the consumption centres. This will ease the setting up of plants around markets, consequently easing evacuation of power from generation to consumption points.
- Encourage the construction of the Mambila Hydro plant with a potential capacity of about 4000 MW, Zungeru and Gurara Hydro plants with capacity of about 350MW each and other renewable means of generation to secure a balance in the generation portfolio between gas, hydro and other means.
- Mount a campaign for responsible and efficient use of electricity by the citizenry and entrench discipline in the collection of tariffs payment.
- Commit additional investment (through budgetary support) especially in the transmission network by changing the current radial structure to web. This will also enhance the quality of power received at the consumption point and reduce technical and distribution losses.
- Encourage States and Local Governments to embark on massive rural electrification programme especially employing medium and small scale power plant that will generate between 15 mega watts and 45 mega watts localised off-grid systems. This enhances social and economic development, alleviates poverty and discourages rural–urban drift.
- Develop safety and protective mechanism for power infrastructure to deter vandalisation especially in the Transmission and distribution sub-sectors.
- Allow appropriate pricing to prevail for commercial, industrial and urban and rural domestic consumption.
With these among others, the sector, as viable commercial concern, will thrive and prosper, attracting local and foreign capital, creating direct and indirect jobs and providing the appropriate and enabling environment for efficient social and economic growth and development in the country and the sub-region. These should eventually lead to total disengagement by government, as the sector would have stabilized enough through total deregulation.
M.M. Abdu (signed)
Chairman
