Buhari Fails To Deliver Campaign Promise On Power Supply
Exactly four years ago, President Muhammadu Buhari described the nation’s power crisis as “an immediate concern” and promised to tackle it “head-on,” but Nigerians are still groaning under the weight of blackouts.
No single cause can be identified to explain the Nigerian’s poor economic performance over the years than the power situation. It is a national shame that an economy of 180 million generates only 4,000MW, and distributes even less. Continuous tinkering with the structures of power supply and distribution and close to $20b expended since 1999 have only brought darkness, frustration, misery, and resignation among Nigerians. We will not allow this to go on. Careful studies are underway during this transition to identify the quickest, safest and most cost-effective way to bring light and relief to Nigerians.”
Those were the words Buhari used while decrying the state of the nation’s power situation in his inaugural speech after his swearing-in as President of the Federal Republic of Nigeria on May 29, 2015.
Talking about unending and seemingly impossible fuel and power shortages, he said, “We are going to tackle them head-on. Nigerians will not regret that they have entrusted national responsibility to us. We must not succumb to hopelessness and defeatism. We can fix our problems.”
Total power generation in the country stood at 3,306.3 megawatts on Wednesday (May 29, 2019), exactly four years after the President decried that “an economy of 180 million generates only 4,000MW.”
The nation’s power plants generated 3,694MW on Tuesday, up from 2,978MW on Monday, according to data from the Nigeria Electricity System Operator, an arm of the Transmission Company of Nigeria.
The data showed that power generation plunged to zero megawatt as of 6.00 am on May 9 and 10.
This month, the power grid experienced what the Managing Director of TCN, Mr Usman Mohammed, described as the worst system instability since he assumed office.
The system operator put the nation’s installed generation capacity at 12,910.40MW; available capacity at 7,652.60MW; transmission wheeling capacity at 8,100MW; and the peak generation ever attained at 5,375MW.
But actual generation has mostly hovered around 3,000MW and 4,500MW in the past few years.
The President, Electricity Consumers Association of Nigeria, Mr Chijioke James, in a telephone interview with our correspondent, had no other word to describe the power sector than “failure.”
He said, “Even though they said there is an improvement but the consumers have not felt any improvement within the last four years. So, it is a failure; and that is the right word for it. The consumers all over the country are not satisfied with the state of the power sector.
“The way the power sector is run is too cumbersome such that despite Federal Government’s efforts to revive the sector, it is still in a comatose state.”
Describing electricity as the engine room needed to solve a lot of social issues currently facing the country, he said, “The power sector has implications for the economy, security and so on. You cannot be talking about generating employment without reliable and affordable power supply.”
The power grid has continued to suffer system collapse over the years amid a lack of spinning reserve that is meant to forestall such occurrences. It suffered 75 collapses between May 29, 2015, and May 29, 2019, according to the data from the system operator.
The entire value chain of the power sector, from generation to distribution and transmission, was managed by the Federal Government until November 1, 2013, when the sector was privatised.
The TCN, which manages the national grid, is still fully owned and operated by the government.
More than five years after the privatisation, the investors who took over the six generation companies and 11 distribution companies that emerged after the unbundling of the Power Holding Company of Nigeria are still grappling with the old problems in the sector.
The sector is plagued with problems of gas supply shortages, limited distribution networks, limited transmission line capacity, huge metering gap, electricity theft, and high technical and commercial losses, among others.
The financial viability of the Nigerian electricity supply industry remains the most significant challenge threatening the sustainability of the power sector, according to the Nigerian Electricity Regulatory Commission.
It said, “The liquidity challenge is partly attributed to the non-implementation of cost-reflective tariffs, high technical and commercial losses exacerbated by energy theft, and consumers’ apathy to payments under the widely prevailing practice of estimated billing.”
NERC, in its latest quarterly report, said the aggregate technical, commercial and collection losses for all the Discos were still substantially greater than the expected industry average of 21.42 per cent, the allowable ATC&C losses provided in the Multi-Year Tariff Order for the year 2018.
The average ATC&C for the Discos declined to 51.91 per cent in the third quarter of 2018 from 54.24 per cent during the second quarter.
“The high ATC&C losses reflect low investments in distribution networks aggravated by the low level of metering of end-use customers, thus creating lingering liquidity challenge to the industry,” the regulator said.
Over the years, the Discos, Gencos and the TCN have continued to engage in blame game amid the lingering crisis in the sector.
While the Discos see transmission as the weakest link in the electricity value chain, the TCN has often argued that the state of the distribution networks was hampering its wheeling capacity.
The Discos, in a recent statement on ANED’s website, also said the energy sent out had consistently fallen short of the MYOT, 2015 generation assumptions governing their operations and service delivery.
They said, “During 2018, the daily generation sent-out by Gencos has averaged an estimated 91,000 megawatt-hours (3,791.6 MW). However, the MYTO-2015 forecast for the year is 203,976 MWh (8,499 MW), which is more than double the reality of electricity supply.
“Since 2015, the compound annual growth rate of the average daily generation sent-out per year has been less than three per cent, which indicates that the generation has not increased due to the lack of new generation power plants, gas constraints, water constraints and grid constraints.”
The Discos noted that the situation was worsened by the failure of NERC to implement six minor reviews to “alleviate the energy volumetric risk associated with MYTO 2015 generation assumptions.”
They said, “Correspondingly, the N1.4tn market shortfall, partially but significantly a product of the commercial impact of the generation deficiencies in the MYTO 2015, has limited the Discos’ ability to put in the necessary investments for network infrastructure expansion, network reliability, metering, customer services, worsening the liquidity crisis in the Nigerian electricity supply industry.”
The Gencos have complained several times that their power plants were being forced to operate below their optimal capacity levels due to transmission and distribution constraints.
The Executive Secretary, Association of Power Generation Companies, Dr Joy Ogaji, said, “Specifically, generation companies are pinned down by some operational impediments. The frequency of instructions to either increase load or decrease load (ramp up and ramp down) and, in some cases, shut down, has induced damaging stresses to the components of the machines.
“These instructions, reflective of the grid behaviour, are subjecting key electrical components of the power plants to operational stresses. Our available generation has always been steady between 7,500MW and 8,000MW; you can check the records at the National Control Centre, Osogbo.”
The TCN MD said this month that the nation should not expect stable electricity until power distributors recapitalise in order to effectively expand their network.
“We cannot have a stable grid unless we have an adequate investment on the distribution side and that is why we have been calling, as transmission (company), that distribution has to be recapitalised. They (distribution companies) need to have a commensurate investment on the network,” he said.
The Chairman/Chief Executive Officer, NERC, Prof James Momoh, said recently that since the privatisation of the sector, there had been a constant decline in the provision of meters to existing customers by the Discos while new customers had been added steadily to their networks, contributing to a significant metering gap.
He said in the January edition of NERC’s newsletter that investigations by the commission revealed that a total number of 5,172,979 electricity customers were registered as of May 2012, but only 2,893,701 had meters.
He noted that the Discos signed performance agreements with the Bureau for Public Enterprises in 2013, with the provision of 1,640,000 meters expected annually over the next five years but failed to abide by the performance agreement terms.
“Power is very critical. It is my sincere expectation that President Buhari will look at the emergency in this sector and ensure that the new administration handles the issues in the sector headlong without sentiment and be able to truly unbundle the sector both in terms of policies and legal framework,” James said.