subjected to a forensic audit by the Federal Government. Besides,
governors have invited Minister of Power Sale Mamman to provide details
of the ongoing work at the $5.8 billion Mambilla Hydro Electrical Power
Project which will supply 3,050 megawatts on completion.
The National Economic Council (NEC), has said the recommendation by the
Nasir El-Rufai committee on the review of the ownership status of the
DisCos on forensic audit was adopted. Edo State Deputy Governor Philip
Shaibu told reporters after the meeting, that the forensic audit of all
DisCos’ accounts would ascertain the level of investment into the
assets they acquired. According to him, the El-Rufai committee requested
for another two months so, it could tidy up issues surrounding the task
given it, one of which is getting state governments to come up with
their expenditure on the power companies. “NEC received an update on
the review of the status of the ownership structure of the electric
power distribution companies. The Kaduna State Governor, Mallam Nasir
El-Rufai, briefed NEC on the progress so far made and responses so far
received from the general public. “He also told NEC that forensic
audits will be carried out on all the bank accounts of all DisCos and
also that the state governments are to provide details of their
investments in the electricity distribution companies.
The Nigerian Governors Forum (NGF) meeting recently, decided to seek
more information on the Mabilla Power Project according to the
communiqué read by its chairman, Ekiti State Governor Kayode Fayemi. He
said: “The forum received a presentation from Hypertech Nigeria Ltd on
the 3050MW Mambila Hydro Electric Power Project (MHEPP). The team
highlighted that the project was executed between the Federal Government
of Nigeria and China Gezhouba Group Corporation (CGGC). “The team gave
an overview of the huge potential that is lying fallow in the Mambilla
region which governors appreciated, but insisted that a presentation by
the Ministers of Power and Water Resources would provide more granular
pathway to what needs to be done.”
The Power minister said he had submitted a report to the Federal
Executive Council (FEC) that the DisCos are the weak link in the power
chain. According to the minister, while about 13,000 megawatts are
generated, about 7,000mw are transmitted but the DisCos are only able to
take about 3,000mw. But the DisCos rejected the minister’s claim,
saying the Transmission Company of Nigeria (TCN) cannot wheel 7000mw.
A 2015 report of the Good Governance Initiative (GGI), a
non-governmental organization advocating uninterrupted power supply in
the country, says Nigerians spend N3.5 trillion on fuelling their
generators annually. Its President, Mr. Festus Mbisiogu, said intensive
research conducted by the body to ascertain the negative multiplier
effects of unsteady power supply last year showed that the
manufacturing sector spends over N800billion yearly on generators. He
added that this is apart from about N2 trillion spent on running
generators by over 17 million Small and Medium Scale Enterprises (SMEs),
banks, other corporate entities and traders across the country. He
explained: “In the banking sector, each branch spends over N4million
on diesel in a month. When you multiply that figure by the number of
bank branches in Nigeria, it could be colossal. An average family man
spends between 60,000 and N100, 000 in a month on fuel, apart from the
maintenance. “With over 6,133 bank branches and each expending
N4million on diesel a month, N48million will go down the drain in a
year, and this will amount to N294.4billion per annum across all the
branches. This means that not less than N1.5 trillion must have gone
into diesel purchase in the past five years. This is outside the amount
spent on powering ATM points located outside banking premises and
maintaining the generators, among other critical banking
infrastructure”, he stated.
Financial experts say the amount spent on fuel and generators by
manufacturers and SMEs will increase remarkably this year as 2016 is
clearly the harshest since the 2008 global economic meltdown. The rough
business climate has forced many companies to close shops, while the
surviving ones are retrenching workers daily. Recently, the Organized
Labour raised an alarm that the food, beverage and tobacco sector of the
nation was on the verge of shutting down and that over three million
jobs were at risk due to the inability of companies to meet the
crippling cost of production.
The National Bureau of Statistics put the total number of SMEs in the
country at over 17 million, many of which rely on generators to run
their businesses as the country continues to grapple with abysmal power
generation. Looking at his own sector, the Chairman of Toiletries and
Cosmetics Manufacturers Group, Mr. Ikpong Umoh, said ‘ hopes were
dashed following the inability of the power generation companies
(Gencos) and Distribution Companies (Discos) to provide the power
supply needs of the citizens two years after the privatization
exercise. He observed that the role of manufacturing in a developing
country like Nigeria cannot be trivialized. He called on President
Muhammadu Buhari led the government to urgently save the manufacturing
sector from total collapse by providing constant power supply.
At the time of the inauguration of President Muhammadu Buhari on May 29,
the available electrical power in Nigeria was about 2,500 MW. But in
less than six months it has almost doubled. The Nigerian Ministry of
Power attributes this to the enhanced supply of gas to the nation’s
newly constructed gas power plants. Many Nigerians, however, believe
that’s only part of the explanation. The new owners of the electricity
generation and distribution entities that were part of the government
monopoly before the liberalization of the electricity industry had to
sit up in view of the well-known no-nonsense disposition of the new
president.
Nigeria’s National Population Commission reports there are 178.5
million people in the country. Electricity supply of 5,000 MW is grossly
inadequate for that many Nigerians. Even though access to electricity is
available to only to about 55 per cent of the people, load-shedding for
rationing electricity is widely practised all over the country —
despite the big jump in the supply figure noted above. Much more than
5,000 MW of electricity is required for the socio-economic growth of the
nation. Energy planning experts using modern energy modelling tools
estimate that for the Nigerian economy to grow at a rate of 10 per cent
the country’s electricity requirement by 2020 will be of the order of
30,000 MW, and by 2030 it will be 78,000 MW. A greatly expanded
electricity supply regime for Nigeria will require a detailed assessment
of the recent privatization of the nation’s electricity generation and
distribution infrastructure. The energy mix for electricity supply will
need to be broadened from the current two of hydro and gas sources to
seven sources: hydro, gas, solar, wind, biomass/biofuels, coal and
nuclear. Additionally, there will be a requirement for the strengthening
and expansion of the national grid along with improvement of
distribution systems as well as promoting the development of fuels for
gas, coal and nuclear power plants. There is also the need to update
both the National Energy Policy and the National Energy Masterplan and
pass them into law.
For enhanced security of electricity supply, there is the urgent need
for expanding energy sources, from gas and large hydro to gas, hydro,
solar energy, wind energy, biomass/biofuels, coal and nuclear. The new
power plants can be built on the basis of public-private partnerships.
The Government would then divest its involvement after some years in
line with the current policy of getting the private sector to handle
generation and distribution systems. Many advanced countries, along with
the International Renewable Energy Agency and the Energy Commission of
Nigeria, will guide the development of the large-scale renewable
energy-based power plants. The Ministry of Mines and Steel Development
would guide the development of clean coal power plants, while the
International Atomic Energy Agency and the Nigeria Atomic Energy Agency
would guide the development of the nuclear power plants.
Projects of the embedded generator type should be vigorously promoted at
distribution networks to close the gap in local demand and supply of
electricity. One way of doing this is to invite investors to be part of
pre-packaged pilot projects in all the distribution companies. State
governments should take interest in embedded generation, as is already
the case in Lagos State. It is observed that despite the government’s
proclaimed desire to deploy renewable energy sources (RES) in the
nation’s energy mix, there is no supporting legislation to support the
stated position. Government, rather, advocates “some limited
involvement” in financing renewable energy technologies, mainly in the
form of differential wholesale tariffs rather than direct capital
injections. Government should as a matter of urgency embrace the current
trend where many developing and emerging economies are vigorously
promoting renewable energy efforts through direct policy initiatives and
incentives.
Solar power generation which seemed neglected is now receiving huge
attention, forming the centre of many power generation-focused
conversations in Nigeria. Power problems in the country mirror that of
many energy markets in Africa. Nigeria’s power ministry estimates that
about 40,000 MW of electric power is required to satisfy the country’s
industrial demand but Nigeria only has about 12,000 MW of installed
generation capacity, of which around 3,500 MW is supplied by gas-fired
plants and hydropower systems. The majority of the gas-fired power
plants are now burdened by problematic gas supplies, arising from
pipeline vandalism by militant groups operating in the gas-producing
region of the Niger Delta. The Renewable energy program of the Nigerian
government says “about 600,000 MW of electricity can be generated from
just one per cent of Nigeria’s landmass.” This implies that Nigeria
can procure 100 per cent of its power from a renewable source such as
solar. Nigeria has the potential to lead in utility-scale solar power in
Africa, given its well-structured regulatory frameworks, the standard of
which is mostly absent in many other African countries.
Nigeria has often been heralded for overcoming numerous systemic
obstacles but there remains one obstacle which many believe holds the
country back: a chronic shortage of power supply. With about 90 million
Nigerians living without power, citizens are forced to live on
expensively maintained generator sets. The effect of the lack of
electricity is significant as it continues to hamper economic growth and
hurts investor confidence. However, a partnership between the World
Bank, International Financial Corporation as well as local banks and
energy firms in Nigeria could help assuage the pressing issue. The
Lighting Africa Project, as it has been tagged, will focus on helping to
develop a private sector that will provide electricity, using solar
power, to up to a million households in Nigeria. The project will target
households without access to the national grid in rural communities over
the next five years.
To make this happen, the World Bank will play a key role as it will
provide low-interest financing for investors and energy firms involved
in the partnership. One of the major goals of the project is to reduce
the heavy dependence on kerosene lamps and gasoline-powered generators
which pose various health and environmental risks. Exploring solar
energy could be a more realistic option to fix some of Nigeria’s power
issues since building new national grids could cost billions of dollars.
In the long-term, alternative clean energy will also help the country
meet its ambitious plan to down emissions by as much as 45% by 2030 as
part of the landmark climate change deal reached in Paris. In line with
this, Nigeria recently announced a ban on low-cost generators citing
health risks caused by emissions and fire hazards.