Nigeria’s Electricity Woes Continue As Value-chain Disconnect Pervades Sector
Stakeholders list fundamental reforms, heavy investments, others as panacea
Despite more stable power supply over the past several weeks, Nigerians are unlikely to enjoy adequate power supply for the unforeseeable future due to infrastructure deficit, policy somersaults, amongst a myriad of problems.
The current bout of power supply can be attributed to the fact that electricity operators committed to delivering 5,000MW of power from July 1, under the threat of sanctions if they default, as well as the fact that the dams are nearly full and operating at near full capacity.
The chairman, Nigerian Electricity Regulatory Commission (NERC), Sanusi Garba, in a press briefing had said the absence of commercial contracts underpinning transactions within the sector had been a major challenge and the commission was poised to resolve this.
The new contracts, according to the NERC chairman, obligate power distribution companies (DisCos) to take the power sent to them or pay for it.
It will also compel the Transmission Company of Nigeria (TCN), the federal government-owned participant, to ensure that the grid remains stable enough to wheel the contracted volumes from July.
Power generation companies have also been compelled to sign contracts with gas suppliers for the required gas volumes to maintain the projected power delivery.
Eighty per cent of Nigeria’s
power generation is from gasfired power plants and a lack of firm contracts has forced suppliers to prioritise other users, said Sanusi.
The commission, he said, was moving to ensure that all contracted gas volumes are fully paid for.
The NERC chairman said the commission was going to enforce this contract by ensuring suring that erring market operators pay stiff penalties for failing to meet their obligation. I n spite of the measures that have been put in place to ensure stable power supply, Nigeria will not produce enough to meet the nation’s demand in the foreseeable future. Planning experts estimate that for the Nigerian economy to grow at 10 per cent yearly, electricity requirement must reach 78,000MW by 2030, although the government has embarked on the ambitious goal of 40,000 megawatts by 2040.
The experts said market intervention and funda
mental reforms are vital to achieve this.Heavy investment is needed to address the insufficient gas supply due to poor gas infrastructure, obsolete transmission and distribution assets. They have argued that Nigeria is in dire straits when it comes to power supplies, with a poor regulatory environment. Although fairly better generation companies, transmission is in a straightjacket, and the distribution subsector has consumed all excuses available in the trick books to keep up with their overall poor service delivery. A Nigerian entrepreneur and managing director of Sahara Group, Kola Adesina, identified the key problem in the sector as a poor alignment gap in the value chain. Adesina argued that it may be wrong to lay blame on any of the subsectors, neither the generation nor distribution, without bringing transmission into focus when any incident occurs. He said in the case of grid collapses it could be one of the disconnects in the
chain that usually triggers such incidents. He, therefore, recommended a chain of investments along the connecting sections.
This year alone, there have been seven national grid collapses, with poor gas supply to turbines, and inability of power distribution companies to evacuate power from the grid, resulting in unstable high and/or low frequencies.
In his submission, chairman of Momas Electric Meter Manufacturing Company (MEMMCOL), Kola Balogun, whose company debuted and piloted what is known as Substation Power Enhancement Panel (SPEP), said that investment in infrastructure and interconnection of the value chain is key to resolving the issues bedeviling the sector.
A researcher, and the convener of PowerUpNigeria, an electric power consumer rights advocacy group Adetayo Adegbemle, urged the NERC to integrate local engineering companies like MEMMCOl in the distribution network enhancement.
Adegbemle also said the national grid requires significant upgrades, and that the Siemens deal with the federal government is expected to address some of the transmission challenges.
He listed causes of grid collapse to include low water levels at the hydropower plants, and low gas supply at the gas power plants.
Speaking also, the president of the Nigeria Consumer Protection Network (NCPN), Kunle Kola Olubiyo, advised the government to join hands with experts and like-minded professionals within and outside the power sector to come up with a comprehensive mechanism to address the decline in growth being generally witnessed in the areas of universal access to energy security, decline in energy load dispatch by the TCN, decline in generation capacity, decline in energy load utilisation by the DisCos.
“The Nigerian government should also learn from the poor implications and delivery of the 2013 power sector privatisation exercise also carried out by the BPE,” Olubiyo said.
In his opinion, the executive director, Research and Advocacy of the Association of Nigerian Electricity Distribution Companies (ANED), Sunday Oduntan, said one of the problems of the sector is essentially that the country’s grid system is radial in nature and lacks flexibility such that when anything happens along the line there will be total collapse.
His thought aligns with Kola Adesina’s position that the Nigerian national electricity grid is a network of generation companies, distribution companies and the Transmission Company of Nigeria (TCN), and where there is gap in supply and transmission the grid suffers collapse.
According to Oduntan, in Nigeria, the system mismatch occurs frequently because demand is regularly beyond available power allocated to distribution companies at certain periods and this is in addition to the high transmission and distribution losses.
Although the transmission company often attempts to bring the mismatch under control, it doesn’t always succeed. In some instances, sensitive generating units trip as they cannot cope with additional loads. If cascaded, tripping continues, and the whole power grid eventually loses supply.
He said a key solution to the recurring problem, which mostly occurs at the transmission level is deployment of technology.
Oduntan recommended the acquisition of Supervisory Control and Data Acquisition-Distribution Management System (SCADA-DMS).
He explained that SCADA is a centralised computer system that tracks electricity network operations from physical monitoring, remote coverage and relay of network information.
The country plans to generate 30,000MW by 2030 with 3,000MW coming from renewables and 27,000MW from its power plants to serve its over 200 million people.
However, power generation still hovers just above 5,000 MW despite the 13,000MW installed capacity eight years after the sector was privatised.