Power Reform and Electricity Generation
 

By

Victor Ifedi

culled from GUARDIAN, March 21, 2005

The law which established the National Electric Power Authority (NEPA) in 1972 stipulated that it should develop and maintain an efficient, co-ordinated and economical system of electricity supply for all parts of Nigeria. Thirty three years after, we are still in the doldrums as far as power availability is concerned. At the inception of NEPA in 1973, only five of the then 19 state capitals were connected to the national transmission grid system. Today, practically all state capitals are being served from the national grid, although haphazardly.

NEPA's original plan to meet with increase in power demand includes building adequate power-generating facilities to cope with the forecast load demand with reasonable allowance for spare or reserve plant capacity to permit normal maintenance and forced outage at each particular period. However, NEPA is confronted with reckless development of towns which hampers its efforts. Such distortions create immense problems. In most cases, small industries suddenly spring up in areas planned as residential. Consequently, transformers and cables are overloaded till they are damaged because NEPA is not notified when new loads are added to existing ones.

In developed countries, the electricity authority is usually informed about projects at the planning stage. In Nigeria, NEPA only gets to know when projects are about to be commissioned at which point the authority is expected to cope. Too frequently, NEPA tries hard to accommodate the resulting increase in power demand with great difficulty. In the circumstances, the in-built reserve in the network is then quickly eaten up and any slight problem puts everybody in darkness. It is therefore, necessary for all prospective commercial customers, industrialists, state and federal government establishments dealing with new projects to inform NEPA of their electricity requirements at the earliest opportunity to enable the authority to reinforce existing facilities and modify plans to accommodate new loads on schedule.

A critical analysis of the operations of NEPA indicates that a monopolistic NEPA has been literally biting more than it can chew. The Fourth National Development Plan (1981 to 1985) exposed the very rapid increase in power demand at over 20 per cent per annum. That makes it difficult for the installed capacity to cope with the requirements of the present economy. The result is load shedding which generally disrupts domestic life as well as the manufacturing activities. For logistic and financial reasons, electricity plants are not usually adequately maintained. Thus, actual output tends to fall significantly below installed capacity.

One factor which has not been properly addressed since our political independence is the inadequate manpower in NEPA especially in the professional, managerial and technical personnel. NEPA does not have sufficient indigenous manpower to deal with the sophistication necessary in a modern energy and power industry. The situation is compounded by the politicisation of key positions under the cover of federal character and geographical representation syndrome. Coupled with that is our over-dependence on overseas manufacturers for the supply of power plants, equipment, facilities and spare parts. These inhibit our efforts to ensure a regular and prompt supply of electricity.

According to the last National Rolling Plan, the current installed generation capacity in Nigeria's power industry is 4800 kilowatts. Out of this capacity, NEPA is able to generate at peak demand only about 3000 kilowatts. The major factors for the under-utilisation of existing installed capacity are frequent breakdown of generation plant and equipment because of inadequate repairs and maintenance, lack of spare parts and high costs of spare parts as a result of the depreciation of the naira in the international currency exchange market.

NEPA also has to cope with the periodic low level of water at Kainji and Shiroro dams especially during the dry season. The economic and social costs of power supply interruptions have been quite substantial due to the predominating utilisation of private generators for homes and industries with its health and fire hazards, disruption of scheduled productive activities and reductions in operation. The proposed national integrated rural development has suffered severe setbacks following disabilities experienced in the process of rural electrification.

A comparative analysis of electric energy generation in other countries places Nigeria at a relatively bottom scale. The United States of America generates 500,000 megawatts for the population of about 260 million. United Kingdom generates 43,000 megawatts for its population of about 60 million. South Africa generates 23,000 megawatts for its population of about 45,000 million while Argentina generates 9,500 megawatts for its population of about 32 million.

In his speech on May 29, 2003 at the inauguration for second term, President Olusegun Obasanjo promised to increase our electricity generation to 10,000 megawatts by 2007 for our population of about 140 million. The backwardness of Nigeria in the energy sector is a sad reflection of our economic retrogression in spite of our purported oil wealth. This is a tragic manifestation of the poor and ineffective leadership since our political independence in 1960. Power availability is a critical index in economic and industrial evolution.

Our fervent hope for power revolution lies in the Power Reform Act which unfortunately was delayed by the National Assembly and the Presidency for three years during which more than N140 billion or 2.4 per cent of the country's gross domestic product was lost to power outage. The Power Reform Act will hopefully unbundle NEPA, remove its monopoly stranglehold and liberate the energy sector for optimal performance. It will expectedly boost investors' confidence and attract substantial foreign direct investment into the power sector. There is an urgent need to conduct a manpower audit in the power sector with a view to locating the critical areas of personnel deficiency. Competent foreign experts should be injected into that sector in order to re-engineer operations and train local staff.

The Federal Government should revisit its noble proposals previously underlined in the Third and Fourth National Development Plans and implement them religiously. Firstly, to conduct short and long term requirements of the specialised skills including power plant engineers, system planners and specialists in the installation and maintenance of equipment.

Secondly, to establish a National Energy Commission responsible for the formulation and implementation of the national energy policy on a continuing basis. Proper account should be taken on the comparative economies of utilising the various alternative sources. Thirdly, to reduce our dependence on hydro-electricity and encourage more use of coal and gas for power generation.

All those implicated in the mismanagement of resources, fraud and the deplorable performance of NEPA in recent times must be removed from service. The Power Reform Act should be widely publicised in local and international media to maximise its impact.