Six years after privatisation, power woes linger
- Nov 8, 2019 11:06 am GMT
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Six years after the Federal Government unbundled the assets of the Power Holding Company of Nigeria (PHCN) and privatised it, uninterrupted electricity for the citizenry has remained elusive, writes Senior Correspondent AKINOLA AJIBADE
Penultimate week, the country marked the sixth anniversary of the privatisation of the power sector.
Last Friday, Nigerians woke up to witness what has become perennial in the sector - power outage and its attendant debilitating effects on not only the people, but also on the economy.
The same scenario played out in previous editions, as the first, second, third, fourth and fifth anniversaries of the transition of the power sector from a state-owned to privately-run institution were marked by poor power supply. Not only has the sector recorded poor performance, it has also shown its unpreparedness to welcome a privately-driven power initiative.
Before now, Nigerians were expecting an electricity industry driven by private operators. The reason was that the government has failed, by not allowing the sector to grow coupled with the fact that the sector has failed to impact on the socio-economic activities.
The idea appeared good and capable of ending the irregular supply of electricity then. But it turned out not to be so. The situation has gone so bad that the power generation level is at its lowest.
Records have shown that the sector, in the first quarter of the year, generated less than 2,500 megawatts (Mw) of electricity. This is in addition to the fact that generation has been fluctuating between 3,000 and 4,500 Megawatts in the last six years, a development, which has affected the economy.
Like a recurrent decimal, the problems in the sector, which include shortage of gas, meters, poor distribution and transmission networks, high tariffs, have continued to stare Nigerians in the face, as the government appears helpless in proffering solutions to them.
Stakeholders argued that the problems permeate the three key areas in the sector's value chain - generation, distribution and transmission. The subsectors are bedeviled shortage of gas, weak transmission and distribution equipment.
The sector has not been able to record appreciable output in generation of electricity. The problem is attributed to inability of the thermal plants to access gas for production, as at when due.
The report titled: 'Overview of the Nigerian Electricity Sector' showed that generation fluctuates between 1,500 Mw and 4,600 Mw between 2015 and 2017.
The report further stated that gas, which is the feedstock for generating electricity, has not been in constant supply. It said there was insufficient gas to power the thermal plants, adding that the development has made the plants to operate below their installed capacity.
According to the report, 'the non-completion of the Oben pipeline, and the absence of a commercial gas framework was responsible for this problem'.
The Association of Power Generation Companies (APGC) Executive Secretary, Dr Joy Ogaji, said the problems were many. Speaking during a stakeholders'conference in Lagos, she said generation appears to be the major problem.
Speaking on the theme, 'Harnessing oil and gas potential for national development,' Ogaji said the inability of the Federal Government to fully harness the potential in the sector has caused challenges in the industry, saying the power sector for instance, is not making use of its potential, as the sector lacks enough gas to operate with.
The non-availability of gas coupled with its rising price has caused a big problem in the industry. The power generation companies (GenCos) were not being paid for the power they supply the distribution companies (DisCos) promptly, a development that has resulted in huge debts for the firms. She said this was having adverse effect on the output of the generation firms.
Ogaji said the problem, which started in 2013, has defied solution. 'The generation companies were owed and are not being paid as at when due. The GenCos are being owed huge amount of money, so, where will the power generation firms get money to meet their obligations to the industry?'' she said.
She said the failure of the key operators to fulfill their obligations has an effect on the entire industry, urging stakeholders, including the government, to help bail the sector.
The 11 DisCos are having challenges in taking up electricity from the Transmission Company of Nigeria (TCN) and distributing it to homes, offices and industrial concerns across the country. The Director, Research and Advocacy, Association of Nigerian Electricity Distributors (ANED), Dr Sunday Oduntan, said poor distribution of energy should not be put on the DisCos, adding that the DisCos only distribute what they have at their disposal.
He said the company in charge of transmission of electricity has its blames; ditto the power generation firms. He told The Nation that the sector is sitting on a tripod - the GenCos, DisCos and the TCN (TransCo), adding that every layer has a role to play to foster growth.
The transmission, generation and distribution firms must not abdicate their roles one for another, if growth should be recorded. He said liquidity was a problem, which the sector requires, but lacks to provide the needed solution to record appreciable growth, insisting that until the liquidity crisis is sorted out, Nigerians would not be able to enjoy uninterrupted supply of electricity.
He noted that the sector has been having liquidity problem before and after privatisation, noting that the issue must be resolved by the stakeholders to foster growth. The sector, he said, has liquidity crisis and shortfall of about N1.3trillion, urging stakeholders to collaborate in tackling the issue for the common good of Nigerians.
He said the sector is bleeding, which is why the country cannot have stable power, urging stakeholders not to allow the crises to snowball into a more complex one that would spell doom for the sector.
This has become one of the major problems that is hindering the supply of electricity. The issue is attributed to obsolete transmission equipment and lack of funding, a development, which has resulted in grid collapse.
The Managing Director, Transmission Company of Nigeria (TCN), Mohammed Gur Usman, said the rampant cases of grid collapse and other problems of transmission of electricity started many years ago, saying the agency has imported new equipment to address the problems.
Also, the spokesperson, Ibadan Electricity Distribution Company (IBEDC), Mrs. Angela Adekunle, said the industry has witnessed more than 100 cases of grid collapse, adding that the recent one in June affected energy distributors, including IBEDC. Consumers and stakeholders, while identifying with sector's challenges, have come to the conclusion that the sector is almost dead, as it is unable to improve its output, years after it was privatised. While some were said due process was not followed in the sale of PHCN and that the Electric Power Sector Reform Act of 2005 should be revisited by the Federal Government to pave way for a turnaround, others hold different views. Yet, others called for the recapitalisation.
Observers said poor infrastructure has slowed the growth of the sector in the last six years, adding that when the government is able to shore up its capital, the industry would return to optimal performance.