LAGOS, DECEMBER 16, 2016 – The N809 billion investment deficit rocking Nigeria’s power sector has put the country’s hope of improving her power generation, transmission and distribution in 2017 off balance. Investors in power distribution, who revealed this to New Telegraph, maintained that the country could not fix its economy in 2017 without first fixing the power sector.
Executive Director of Association of Nigeria Electricity Distributors (ANED), Sunday Oduntan, who doubles as the spokesperson for all the 11 distribution companies (Discos) expressed optimism in a telephone interview with this newspaper that government and all stakeholders could still do more to better the lots of power supply within the remaining few days of this year.
Nigeria, a country of over 170 million population, is grappling with 3,500 Mega Watt (MW), a problem that worsened in 2016. “We can never fix the economy without fixing the power sector.
The situation is very bad. Is there hope in 2017 for improvement in power? If we get it right, yes, but if we continue the way we are going, there is no hope,” he declared. “I will say yes if we do the right thing like meeting up with investment shortfall, which had risen to N809 billion between November 2013 and November 2016.
And the answer will be no if we do not do the right thing,” he added. “All of us – government, operators and customers – must actually do something about it. We should look back and see what we did right and continue to do it. We should also check what we did wrong and learn from it,” he counselled.
Oduntan who decried the shortfall being recorded in the distribution sub-sector alone as very worrisome and capable or crippling the sector, said the foremost cause of the crisis is the persistent increase in exchange rate after the December, 2015 agreed rate of N197 to $1.
According to him, the GenCos who are made to buy gas from the suppliers in US dollars tender their invoice to the DisCos to pay at the prevailing value of forex and charge their tariffs based on the fixed exchange rate, thus leading to the shortfall.
He blamed the crisis on inconsistency and ineptitude on the part of the Nigeria Electricity Regulatory Commission (NERC) and urged government to intervene and help out by finding a lasting solution to the problem of shortfalls in the sector.
The quarterly partial shutdown of the national grid, which hit a record high this year, checks by this newspaper showed, is another problem the sector will contend with in 2017. The installation has begun to show signs of final collapse, as the incessant collapse exceeded 350 times in the last 10 years.
The grid, a document of the Transmission Company of Nigeria (TCN) seen by this newspaper showed, is in need of total overhaul to avert the impending crisis.” The NNG, the document added, “experiences an average of 35 system collapse every year in the past 10 years.”
The constant collapse of the system increased in the second quarter to over 13 times in three months. In May 2016, the national grid collapsed five times. In June, it collapsed four times. And at the end of the quarter, the nation had witnessed over 13 grid collapse, the document showed.
“The grid risks imminent total collapse if nothing is done on its total overhaul,” an engineer with the Oshogbo centre of the TCN told New Telegraph after his anonymity was guaranteed.
For instance, the collapse that occurred on Sunday, June 19, which threw Rivers, Bayelsa, Cross River and Akwa Ibom states into total darkness, will be a child’s play with the looming total grid collapse if nothing is done to avert it.
The source, who acknowledged that the Federal Government’s investment in the power sector has exceeded N4 trillion ($20 billion), maintained that the investment was made on misplaced priority – generation and distribution – while the transmission was left with little or no major investment.
Between 1999 and 2007, government invested $16 billion in power generation and distribution through Independent Power Projects (IPP) and the defunct Power Holding Company of Nigeria (PHCN).
And between 2007 and 2015, a document of the Nigeria Electricity Regulatory Commission (NERC) showed that over $4 billion was sunk into power generation and distribution, leaving the power transmission with little or no investment.