'POWER DISTRIBUTION COMPANIES MUST METER NIGERIANS TO BOOST REVENUE PROFILE'
Dr. Chukwueloka Umeh, the Chief Executive Officer, Century Power Generation Limited, in this interview with MOHAMMED SHOSANYA, discusses the prospects, challenges of Nigeria’s power sector and why his company veered into it. Excerpts:
There are concerns over the relevance of the privatisation of the power sector by the federal government. What is your take on this?
The government has done a good job, by unbundling the assets of the Power Holding Company of Nigeria (PHCN) and thereafter sold them to the private investors in line with the terms and conditions stipulated by the Bureau of Public Enterprises (BPE).
The government has sold the assets to the investors and what the investors need to do is to optimise the assets they bought from the government. By so doing, investors would be able to make money in the sector.
Why is power supply erratic in Nigeria inspite of the measures taken by the federal government to fix the sector?
The reasons behind acute power shortage in Nigeria are many. First, the federal government has failed to give the sector the attention it deserved.
Power is key to the growth of any economy, and as such it must be given priority by any government that wants to record success. In Nigeria, it is a different case entirely.
The government has failed to give the sector the attention it deserves. Let me, at this juncture; say that the government has misplaced its priority by giving prominence to some issues to the detriment of the power sector. Instead of putting measures, which would enable power plants access gas for production of electricity in place, the government did not.
The government did not deem it fit to provide infrastructural facilities that would aid the transportation of gas from marketers or suppliers to the power plants. That is why plants are complaining of being starved with gas, which is the feedstock they need to generate electricity. Though the country has enough gas, as it is reputed to be the largest ninth gas producer in the world, the nation’s poor and ageing infrastructural facilities have become a source of concerns in the industry.
Secondly, the country lacked strong distribution networks, a development, which has hindered the distribution of electricity to the consumers by the firms approved to undertake such responsibilities.
Don’t you think the country has no business with power deficit given the fact that Nigeria has one of the highest gas reserves globally?
There is no doubt about that. I would give a simple analogy to explain this fact. We have resources, which we cannot use in order to meet our needs.
This is why Nestoil and its subsidiary, Century Power Generation (CPG), have invested in the widening oil and gas space.
This is a company, which is owned by Nigerians and run by Nigerians. Nigeria is the only home we have. This implied that we have no other place to run to. So, if we are going to live here, do business here, we have no choice than to fix the problem(s) in the country.
Why do you think power distribution companies (Discos) are challenged in distributing enough electricity to consumers?
The reason is not far-fetched. The stakeholders such as the power generation companies (GENCOS), the DisCos, the Transmission Company of Nigeria (TCN), the Nigerian Bulk Electricity Trading Company (NBET) and others in the energy value chain are not doing what they are supposed to do. The value chain is broken, and as a result, there is no cohesion among the stakeholders. Let us say Nigeria has installed capacity of over 12,000 gigawatts and there is problem with the distribution, how can the country provide uninterrupted power supply? The problem with the Discos, started during the privatization period.
Then, the Federal Government gave numbers that they thought was the Aggregated Technical Commercial and Collection Losses (ATCCL).
There was an air of uncertainty surrounding the sales of the power firms. That is why the power firms, especially the DisCos, are still battling with the issue of collection of tarrifs from consumers. Recalled that there was not enough meters, coupled with the issue of poor power supply in the sector. Many networks are not metered, and as a result, consumers are not ready to pay bills that they did not incur. This made it difficult for the DisCos to pay debts, they owe the power generation firms.
The problems in the industry can be likened to a cycle. The problems are from one entity to another. The major problem facing the power distribution companies is shortage of meters and government has not been able to address the problem.
Aside this, is the difficulties in supplying gas to the power generation companies for use. The pipelines are old such that they cannot transport enough gas to the GenCos, a development, which has made it the difficult for Nigeria to provide enough electricity for its citizens.
What was the position of Nigerian Electricity regulatory Commission (NERC) on this issue?
NERC was not ready to solve the problem of metering, until 2018, when the Commission in conjunction with the Ministry of Power, decided to introduce a new metering arrangement, which gave birth to the approval of Meter Asset Providers (MAPS) that are going to start operation anytime from now.
Two years ago, NERC through its Chairman, said that only 30 percent of the households are metered.
Under this scenario, how can the Distribution Companies make money? So we need to find a way that the Discos can provide meters to every household, every business that needs power. When meters are evenly distributed to consumers, DisCos would be able to make enough money for their operation.
How can the government stabilise the power sector?
The government should try and provide infrastructure, a development which will facilitate the production of electricity in the country.
Also, the government should put in place a market that would guarantee the sales of electricity by the operators.
What influenced your company’s participation in the Nigerian power industry?
Issues in the Nigerian energy sector are compelling and require solutions. Is it gas shortage are we going to talk about? Is it failure of the power plants to return to optimal production? Is it the failure of transmission to evacuate enough electricity to the national grid we are going to talk about? Is it the general power outage in the country? There are lots of issues that need investigation and solution in the country. I worked in the General Electric (GE), in the United States for many years.
There, I participated in the development of gas turbines for both the airplanes and power plants. If I can do that in the U.S, I should be able to do the same in Nigeria, which is my country. I forget about the fact that I was paid in dollars in United States, coupled with the fact that I was enjoying the infrastructural facilities over there, Nigeria is my country.
So, when I came back to Nigeria, it was easier for me to work in the Century Power Limited, where we are working on 1,500 megawatts power plant in Okija, Anambra State. This is a gas powered turbine that would be completed in 2022 and it would help in providing power to the people in the state and beyond.
How realistic is 2022 slated for Okija Power plant inauguration?
The date for the commissioning of the plant is realistic as Century Power in conjunction with Nestoil, its parent company, is working to meet that deadline.
However, the plant would be ready in either second or third quarter of 2020 in the event that we are able to mobilise enough funds for the project. To enable Century Power achieve this feat, governments have to come in.
A lot of things need to be done by the government in order to make the plan a reality. The government needs to approve documents to achieve this feat. We all know that things have changed in the country.
Many officials in the Nigerian Electricity Regulatory Commission (NERC) and other bodies have been removed by the government and new officials appointed to replace them. This and many other problems have delayed the achievement of these projects.
There are documents, which the Ministers of Finance, Power, Justice and others have to approve. This is the only way through which Century Power can improve funding and accelerate the construction of those projects, which are critical to the growth of the nation’s energy sector.
Failure by the Century Power Limited to get these documents signed means that the projects may not be completed. That is the why the company is seeking the support of the government on these issues. Any attempts by the government to assist the firm to complete the power projects in 2020 means that the government is indirectly working for the betterment of the lives of Nigerians.