Victor EzejaLast week’s collapse of the national electricity grid which is the third time in less than a month, resurrected talks about poor electricity infrastructure across the country and the reality of what Nigerians face on a daily basis in their struggle to have access to what should be a basic amenity for driving socioeconomic activities.
The national grid collapse which occurred on Tuesday, 19 September, came barely five days after the grid collapsed twice within a space of about 12 hours. It dropped from a peak of 3,594.60 megawatts (MW) at midnight to a meagre 42.7mw at 12 noon.
The Transition Company of Nigeria (TCN) had in a statement by its General Manager, Public Affairs, Ndidi Mbah, on 14 September 2023, blamed the grid collapse on a fire incident on Kainji/Jebba 330KV Line 2, adding that the incident is being investigated, with “the view to forestalling future occurrence and invariably further strengthening the grid.” Before then, the TCN had celebrated over 421 days of consistent grid stability.
However, the TCN could not offer an explanation for the subsequent grid collapses.
In 2022, the grid collapsed seven times, with the Federal Government promising to end it.
The latest, no doubt, plunged many Nigerian homes and businesses into total blackout.
Electricity crisis has been a perennial problem in the country. With over 200 million population, Nigeria rarely boasts of 5000 megawatts (MW) of power successfully generated, transmitted, and distributed since the advent of grid electricity in the country till date.
Despite the unbundling and privatisation of the power sector in Nigeria, not much improvement has been achieved thus leaving a majority of the citizens to resort to alternative energy sources which are most times considered unsafe.
Grid collapses despite funding interventions for transmission infrastructure improvement
Nigeria has spent billions of dollars, secured through loans, on funding the transmission infrastructure but keeps experiencing collapses of the national grid.
During the administration of the immediate past President, Muhammadu Buhari, Nigeria secured about $7.5 billion loans to boost transmission infrastructure. The loans were obtained from multilateral institutions such as the World Bank, the African Development Bank (AfDB), the government of Japan, and the Islamic Development Bank (IsDB), among others.
Under the Nigeria Electricity Transmission Project (NETAP), Nigeria got a $486 million loan from the World Bank. The country also took from the Bank, another $2.5 billion to finance the Siemens deal targeted at improving the transmission network.
Nigeria also obtained a $242.4 million loan from Japan for the implementation of the Lagos and Ogun Power Transmission System Improvement Project.
AfDB in 2019, approved a $210 million loan for the upgrade of the electricity transmission and distribution network.
Former Minister of Finance, Zainab Ahmed, had in 2020, said the Government requested a $3 billion loan from the World Bank to finance the improvement of the transmission network. The fund was released to the country in four tranches of $750 million each.
IsDB in 2022 approved a total financing of $1.8 billion for Nigeria, with the electricity loan expected to be a part of it.
With these funds injected into the system, analysts have expressed concern that the country still experiences challenges in the power transmission system.
Impact of grid collapse on Nigerians, economy
The grid collapse has far-reaching implications. It causes a significant setback for Nigeria’s economy and development. Nigerians are estimated to lose billions each year due to power outages, coupled with the impact on quality of life. Many find it difficult to work, study, or run their businesses when such a national blackout occurs.
The World Bank in a report estimated that businesses in the country suffer an annual loss of $29 billion as a result of “unreliable” electricity. “Businesses in Nigeria lose about $29 billion annually because of unreliable electricity,” part of the report read.
The latest national grid collapse came at a time when Nigerians are battling with the high cost of Premium Motor Spirit (PMS) also known as petrol because of the removal of subsidies on the commodity by the Federal Government four months ago.
Due to epileptic power supply across the country, homes and businesses mostly rely on gasoline generators to provide electricity. With the spike in the cost of fuel, many have found it difficult to continue using generators that run on fuel.
Data released by the National Bureau of Statistics (NBS) for its Fuel Price Watch for August 2023 revealed that the average fuel price rose by 230.78 per cent in one year. The data showed that N626.70 was paid per litre of petrol by Nigerians in August 2023. According to the NBS report, diesel which had been in distribution without subsidy for years now, also experienced an increase of 8.7 per cent between August 2022 and August 2023. The product was sold at an average price of N854.32 in August 2023 as revealed in the NBS report.
The skyrocketing price of petrol led Nigerians to begin to adopt the idea of converting their gasoline generators to use natural gas as a cheaper alternative. The decision came at a time when prices of gas dropped in the country. However, the price of Liquefied Petroleum Gas (LPG) has increased recently with fears of a possible further surge. Last week, the retail price of 12.5kg of gas cylinder in most places in Lagos, was N10,000 at N800 for one kilogram. There are concerns that the price of 12.5kg of gas cylinder might hit N18,000 by December 2023.
The price of diesel, according to the Natural Oil and Gas Suppliers’ Association of Nigeria (NOGASA) climbed to N1,100 per litre last week. This is not a piece of cheering news for transporters and businesses using diesel. Many companies such as banks, manufacturing firms, and hotels, among others, use diesel to power their generating sets for electricity supply.
The power load on the national grid seems to have been restored. Data released by the National System Operator, a semi-autonomous unit in the Transmission Company of Nigeria showed that as of 23 September (Saturday), the power generation has gone back to 4,722.10 MW (peak generation), 3,656.30 MW (lowest generation).
Federal Government Targets 20,000MW by 2026
As the country experiences national grid instability, the Federal Government has promised to work towards increasing the power generation capacity to 20,000 megawatts by 2026.
Minister of Power, Chief Adebayo Adelabu, made the pledge while delivering his welcome address during the Leadership Summit of the Nigeria Energy Exhibition and Conference 2023 on Tuesday last week in Lagos.
Adelabu, who lamented that so much has been invested in the nation’s power sector without significant results, vowed that he would work hard to make an impact. According to him, the target set for the country’s power generation capacity, “Is not an ambitious target for Nigeria,” adding, “we can easily achieve it.”
He also affirmed that Nigeria’s short-term plan to achieve 30,000MW of electricity by 2030 and long-term plan of 60,000MW by 2060 was possible.
He equally stressed the need to ramp up investments in “collection technology.”
“In setting targets for ourselves, we also need to set short-term targets. My own vision is for us to increase the stored capacity of our generation to at least 20,000 megawatts in the next three years. And it doesn’t stop there.
“We should be able to evacuate and transport this power at the minimum of 80 per cent of the stored capacity to the end users of the exchange system. Then the last issue there is we need to ramp up our investments in collection technology,” Adelabu said.
Experts have previously emphasized that for Nigeria to have accelerated industrial development, it must boost the power sector. They equally advised that as a way of dealing with the national grid challenge, the country should decentralize infrastructure in the power sector and put in place an efficient management of the system to boost electricity supply. Decentralizing vital infrastructure in the generation, transmission, and distribution sub-sectors would help to ensure that when there is a failure or problem of a given installation in one part of the country leading to a drop in output, it would not result in a collapse of the entire national grid, said Professor of Electric Power and Control, Engineering, University of Lagos, Frank Okafor in an interview.
In an exclusive interview with Prime Business Africa months back, Chief Executive Officer of Geometric Power, Prof. Bart Nnaji, said Nigeria needs to fix three major issues in the power sector which include: lack of gas supply to power plants, poor transmission and distribution infrastructure and ‘man-made’ disruptions along the power supply value chain.
Closing the metering gap
The Power Minister also pointed out that beyond improving transmission and distribution infrastructures, there is the need to expeditiously close the metering gap across the country which he said was over eight million.
“If we can reduce or eliminate this gap and come up with technology to ensure that connections are monitored and we are able to collect not less than 90 per cent of power distributed, of course, liquidity is assured in this country.
“This is an industry that I believe is even bigger than the telecoms industry. Look at the telecom operators across all the segments in the value chain, all of them have a good and successful story to tell.
“The same should happen with the power sector. From the gas companies to the power generating companies to the transmitters to the discourse, we must be telling good stories,” the minister said.
The issue of ensuring comprehensive metering of electricity consumers by distribution companies has been a long-term challenge. While some consumers use prepaid metres, others still are unmetered, relying on estimate billing which oftentimes has been a source of conflict between them and DisCos in terms of what is charged for electric power consumption.
The World Bank report stated majority of Nigerians are reluctant to pay their electricity bills because the bills are not “transparent and clear.” It said: “Nigerian utilities get paid for only half of the electricity they receive.”
According to the report, “Six in 10 of registered customers are not metered, and their electricity bills are not transparent and clear. This contributes to resistance to pay electricity bills.”
Adopting Renewables
Experts have also advised that since efforts made so far to boost the power sector have not yielded significant results, the government should see the need to channel more investments in renewable energy sources to form a substantial part of the energy mix in the country. These they say, also offer cleaner forms of energy such as such as solar, wind and thermal.
At the Renewable Energy Roundtable conference themed ‘Renewable Energies: Innovation, Transition, Opportunities and Challenges’ held in Lagos recently, the Nigeria-British Chamber of Commerce said the time for Nigeria to fully adopt renewable energy has come.
President and Chairman of the council at NBCC, Ray Relly, emphasised that at a time when the world is battling with the threat of global warming and climate change, “The transition to renewable energy is no longer a choice but a necessity.”
He urged Nigeria to join the rest of the world to have a seamless transition through the use of new technologies, policies enactment and implementation of those policies.
“We must implement policies that will make renewable energies not only affordable but sustainable and we need to also monitor implementation of those policies,” Relly said.
The Nigeria Electricity Act 2023 on improving power
The Nigeria Electricity Act 2023 passed into law on 8 June 2023 by President Bola Tinubu contains far-reaching provisions that are expected to create an enabling environment to attract investment in the Nigerian Electricity Supply Industry (NESI). This includes among others, granting state governments the authority to engage in power generation, transmission, and distribution.
The Act also promotes renewable energy by requiring electricity generation licensees to meet renewable generation obligations as prescribed by the Nigerian Electricity Regulatory Commission (NERC). “This means that electricity-generating companies are required to generate power from renewable energy sources and purchase power generated from renewable energy sources,” a review of the Act published by Monday in August 2023 explained.
With the turn of events in the energy sector, urgent measures need to be taken to avoid subjecting Nigerians to more challenges.
As the power minister said that the Act would be a game changer in transforming the nation’s electricity landscape, Nigerians eagerly await to see that happen.
Victor Ezeja is a passionate journalist with six years of experience writing on economy, politics and energy. He holds a Masters degree in Mass Communication.
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