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IWIN Editorials

The Nigerian power sector at a glance #lessTalkMorePower (Part 1)

Monday, 06 August 2018

1) Nigeria is 57 years old, and it is only for three years that engineering technocrats managed the sector (Prof. Barth Nnaji: 2011 to 2012 and Prof. Nebo: 2012 to 2015), yet we keep wondering what the issues are. Elsewhere in Nigeria and indeed the entire world:

  1. Medical technocrats manage the health sector
  2. Financial technocrats manage the finance industry
  3. Legal technocrats manage the legal profession/industry
  4. Etc.
  5. For the engineering sector, the power sector, it is an all comers’ affair: a linguist once managed the power sector. Lawyers have particularly made it a point to target the power sector; one wonders what the attraction is for lawyers in the power sector!!!

2) In 2006 we were able to achieve 3500MW. Today after 12 years, and after commissioning more than 500 distribution, transmission, and generation projects; after more than 1,500 workshops and seminars, we are still at 3500MW #LessTalkMorePower

3) 3500MW is the capacity of a generating plant for a large industry in the developed world: usually managed by one chief engineer and a few engineers/technicians.

4) With generation at 3500MW what is available for use by customers is less than 2500MW. When we juxtapose the technical losses within the transmission and distribution networks, we will need a minimum of 5000MW of generation to ensure at least 3500MW for use by the customers.

5) In 2006 when we were able to achieve 3500MW of power generation we had only one bureaucracy managing the power industry: the ministry of power. And the customer did not have to pay for it.

6) Today with an average generation of 3200MW for the whole of 2016, we have five bureaucracies managing the power the sector;

  1. NBET
  2. NEMSA
  3. NERC
  4. Market Operator under ISO
  5. System Operator under ISO
  6. Ministry of power

The customer gets to pay for four out of these bureaucracies (i.e. if you discount MoP and NEMSA). The customers also have to pay for:

  1.  11 DisCos with bloated boards and complicated executive management structures.
  2.  8 GenCos with bloated boards.
  3.  TCN with a rickety infrastructure that requires costly maintenance.

7) Multiple bureaucracies managing less than 3500MW and we still wonder why tariff is high, and we also wondering why the chaos!

8) Before handover to private investors in 2013, the power sector was free of external debt, and we were able to generate an average of 4500MW on a daily basis - we even achieved 5000MW once. Three years after the handover, the power sector is indebted to the tune of nearly a trillion Naira. Indebted to whom and who will pay? We just complicated a simple problem!!!

9) The difference between the pre-privatisation and post-privatisation eras in the power sector is that now we have:

  1.  Lower levels of generation.
  2.  Higher tariffs for the same level of service (they call it cost reflective tariff, we call it paying for unnecessary bureaucracy).
  3.  Phantom debts incurred in the market.
  4.  Lower levels of service delivery.

10) When government was managing the power sector we suffered only inefficiencies, we even had increasing levels of generation. Today we have the private sector whose singular motive is profit. Managing the power sector, we still have the same inefficiencies, lower generation, and even external debts brought onto the market by the investors.

11) Thirty Chinese State Owned Enterprises (SOEs) once appeared in Forbes 500: it is not government ownership that is the issue, it is a peoples’ issue. After all, if the government is not disciplined enough to run its institutions, where do we draw the line regarding the extent of privatization? The presidency might as well be privatized!!!

About IWIN

The Independent Energy Watch Initiative (I-WIN), an enterprise of Energy ConServ and the Roundtable for the Growth and Development of Power (RODEP), is an online/web based power sector portal that strives to engage stakeholders and the Nigerian public on topical issues in the power sector.

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