The need to provide regular,
affordable and efficient electricity has long been identified as crucial for
the prosperity, growth, national security as well as the rapid industrialization
of developing nations.
Likewise any nation desirable of sustainable development
will ignore the power sector at its own peril. Today, one of the prominent
infrastructure gaps in Nigeria is in the area of power and various attempts by
successive governments at industrialization and rapid economic growth have been
hampered by energy infrastructure deficit. Constant and adequate power supply
is an important requisite for industrialization.
Several efforts have been made by the
Goodluck Jonathan led administration to close this gap including privatization.
However, due to inadequate gas supply caused by the vandalism of major gas
pipelines, corruption, incompetence and a hostile regulatory environment,
Nigerians are yet to realize the benefits of a privatized power sector. With the
emergence of Gen. Muhammadu Buhari as president-elect of Nigeria after a keenly
contested election in which the incumbent President Goodluck Jonathan
gracefully conceded defeat, the hopes of citizens have been reinvigorated and
the expectation of an improved power sector amplified.
Nigerians have experienced false
dawns before especially in 2011 when voters swept Goodluck Jonathan into office
on a wave of sympathy following the sudden death of President Umaru Yar’Adua.
His inability to tackle vested interest that have plagued the power sector for
many years coupled with a lack of political will to undertake sincere reforms
soon left Nigerians clamoring for change.
Delivering constant power supply to
Nigerians will not happen overnight and the challenges of gas supply shortage
by my estimation requires at least 4 to 6 years of significant investments in
infrastructure development before domestic supply can attempt to cater for the
current demand. Currently, the oil and gas majors are more interested in gas
export oriented projects which are in various stages of conceptualization and
development.
This interest was stimulated by the success of the Nigeria
Liquefied Natural Gas (NLNG) project and the rise in global gas prices and
demand. For domestic gas supply to be sustainable, a reliable commercial
framework is imperative to guarantee return on investment for private companies
engaged in domestic gas supply infrastructure development.
A recent increase in the domestic
price of gas from $1.50 to $2.0 per million British thermal units necessitated
an upward review of electricity tariff by the regulatory commission in Jan
2015. The idea was to create an incentive for gas producers as part of terms
and conditions for domestic gas obligations. Whether this move will provide a
final solution to the power problems in Nigeria cannot be answered as several
other bottlenecks exist. Many Nigerians are of the opinion that the right
political will on the path of the federal government can change the tide in the
sector.
Mr. Babatunde Fashola (SAN), the
governor of commercial hub Lagos is one of such who believes that achieving
stable power supply in Nigeria is not a feat that requires rocket science. The Lagos
State government, despite its limitations, has successfully launched 4
Independent Power Projects (IPP) in Lagos Island, Akute, Alausa, and Lekki
Peninsula.
In the short term however, the
incoming administration of General Muhammadu Buhari and Professor Yemi Osinbajo
(SAN) will have to emulate the achievements of Gov. Babatunde Fashola (SAN) by
decentralizing the governance structure and operational framework in the power
sector if they are to meet the aspirations of Nigerians. The necessary
regulatory and legal frameworks required to enable maximum utilization of
exiting off-grid IPP's will have to be developed and enacted. There will be a
lot of opposition from the successor distribution companies in the early stages
as a result of market space encroachment; however this risk can be easily
mitigated through the introduction of smart grids systems that allow IPP's to
operate only when there is unavailability of public power supply. This will
have to be complimented by a robust rural electrification plan and nationwide
advocacy aimed at educating communities on the benefits of energy conservation
and efficiency.
This solution will come at a cost to
consumers who already pay so much for public power that is almost never
available. A study by a reputable survey organization suggests that about 130
million, representing 76 per cent of the 170 million Nigerians generate their
own electricity through alternative sources to make up for irregular power
supply. The study also showed a combined average of 64 per cent or 110 million
of Nigerians experienced greater spending on alternative electricity supply.
Nigerians currently spend an estimated N800 billion annually on fuel to power
their generators and yet the average consumer gets less than 4 hours of
electricity supply daily.
Decentralization and micro-generation
could well be the future of power generation in Nigeria in the short term as it
provides a win-win situation for all stakeholders involved. It will however
require political will on the part of the federal government and a more relaxed
regulatory environment for it to flourish. I believe that if these issues are
solved and the challenges tackled, a solid foundation for the actualization of
rapid industrial development that will transform Nigeria to a highly
industrialized economy would have been laid.
The author Moses
Nasamu (@Mos_Hygh) is an Electrical Engineer and a certified Management
Consultant and Project Manager who practices in Lagos Nigeria. Moses is
passionate about energy and infrastructure sustainability because of their
combined potential to drive operational excellence in organizations and
transform the socio-economic fabric of developing economies. He is currently a
Director of Energy Savers Nigeria, a Non-Profit Initiative that seeks to
educate communities on the benefits of energy conservation and efficiency.
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Very well articulated. We hope the new administration can provide the answers.
ReplyDeleteB.S! You guys are already making excuses for Buhari already! Hmnnn! If there is no stable power supply before the end of the year, then he has failed. He used power to campaign against GEJ! Meanwhile GEJ has put all in place for steady power supply! No excuses! Am equally expecting the stability of Oil prices like he boasted and promised! Am equally expecting the naira to be equal to one dollar! These are the things he swore to do! Am on the look out.
ReplyDeleteWill you keep Kwayet? :-# did you vote for Buhari, it is obvious that you are still pained and your GEJ Till 2019 did not come to pass. did you read the article and see where the writer advised the government to take steps to decentralize generation? you will just open your mouth and be spewing rubish.
DeleteWell said reg the energy.
ReplyDeleteHats of to u