OBASANJO AND THE PRIVATISED NIGERIAN POWER SYSTEM

OBASANJO AND THE BIRTH OF THE NEW NIGERIAN POWER SYSTEM

At this turning point in the Power history of the nation, it is good to state that another history has been made by former President Olusegun Obasanjo who after several governments in Power, initiated the process which turned out to be what we are experiencing today. Some myopic thinkers will not understand that everywhere from now on, whenever we talk about the history of the Power Sector in Nigeria, Obasanjo’s name will be mentioned. The same he did with the Telecommunication industry which led to the birth of GSM and the rest is history. What became of GSM depended on the Regulator of the Industry and not the government who “mid-wifed” its birth. It is in this regard that I must recommend that NERC should get its acts together. The main role of the regulator is to ensure consumers are not exploited while ensuring that investors make profit from their investment. The regulator must punish severely those who breach the conditions of their distribution licences to serve as a deterrent. To emphasise, the power system is different from the Telecommunication system because electricity can kill.

The problems of the Nigerian Power System is huge but that is just a fact. When there is a huge problem, there is need to approach it in a systematic order. To be sure, Nigeria is not going to experience a miracle such as “let there be light, and there is light”. The Power System, like any other of its kind anywhere in the world, will evolve. There will be problems and issues to resolve from time to time as increased understanding of the Power System is gained. This is where there is need for collaboration between the Electricity Supply Industry and the Academia. The Universities and other Research Institutions will be saddled with the responsibility of looking into technical issues that may crop up, determine an understanding of the problem, root cause(s), and continually review and propose solution(s) that will address the issues. This will also develop the competencies of the participating Universities or institutions. So let no one be scared about issues evolving in a Power System that remained “non-existent” in the years it was “alive” before now.

It is good to mention that the companies that have bought the Nigerian Power Asset have taken a huge risk that only them can take. This is because of the many issues that are yet to be resolved by the Federal Government. These issues include but not limited to the level of involvement of government and her ministries in the Management of TCN which is supposed to be under a separate contract, the availability of quality gas and reliability of its supply to Power Generators requiring them by a country ranking top in Gas reserve but still flares a huge chunk, the full independence of the Regulator (NERC) or watchdog for the Industry, strengthening of the Transmission and Distribution Network, metering, revenue collection and many other commercial issues. Even at that, it does not stop Nigeria from addressing the issues in a systematic manner. For example, considering the fact that the buyers of the Discos did not have access to the Assets they have bought is funny because no one who has worked hard for his money will buy something he has not seen! But there you go, this is why Nigeria is unique! Hence, they will have to evaluate the true value of the assets and some may find them to be well priced and others may not. For the latter, the first approach will be to “Sweat” the Asset, a term Power System Engineers use to describe a situation where the companies will get the best out of the network by delivering electricity but not investing in the network. No one will complain especially because there will be improved availability of electricity to homes and industries. However, like an un maintained car, these investors, knowing that the network will break down and become worse than they have met it, will exit the business in line with available exit conditions in their Distribution licences. The Industry watchdog (NERC) is the only body that needs to prevent this! The reason is that once those investors leave, it will be difficult to continue to enjoy the level of standard of supply customers are used to. It is best to ensure that no buyer of the Disco today leaves the network worse than it is today. To do this, NERC may apply the Outputs Measure approach to define the revenue formula for the DISCOs under the MYTO platform. 

Suffice it is to mention that for any country to have “Uninterrupted Power Supply” it must operate the Power System the way and manner those countries who have been able to achieve it do. To do less is to say you do not want it – Simple! For example, NERC must enjoy a very high degree of independence as stated earlier. They must be able to both “bark and bite” to keep sanity in the Power System. If it possible, separate courts will be required to handle cases that involve the Power System. These cases will soon include deaths of citizens because of electricity flowing in exposed conductors without the minimum required protection, poor quality of voltage supply that damages critical equipment and disturb industrial processes for which large consumer companies will seek compensations, wayleave and property, theft of metals used in the Power industry which are very expensive in the international market, to mention a few.  

For me (so this may not be the most important for the DISCOs, GENCOs or other players), the most important problem to be addressed is the dearth of knowledge of Power System. This is not peculiar to Nigeria but hers is huge because it is almost absent. But this will not stop acquiring such knowledge because Nigerians are a determined specie. Bridging the skill gap must be done in a co-ordinated manner with short, medium and long term approaches. This too needs to be handled by someone who already works in the Power System in Nigeria or in developed countries where uninterrupted Power Supply is the norm. The use of quota system will not work!

There is also the need to keep the staff as they become skilled. Developed economies would soon begin to poach trained personnel in the Industry. Although labour is mobile, a critical look should be taken of this.

Noteworthy is the fact that the crimes committed against the nation by the short-sighted leaders and Engineers who “mid-wifed” the Oil and Gas Industry in Nigeria included not educating, training and empowering Nigerians. It is in this regard that there is need to fully support the initiatives to encourage local content, so that in the future, a bill like the PIB which should benefit the nation will not be blocked by IOCs.

 

Idowu Oyebanjo is a Power System Protection Engineer in the UK.

 

 

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3 thoughts on “OBASANJO AND THE PRIVATISED NIGERIAN POWER SYSTEM

  1. I really the write up, people like you are needed back home to drive our power industry forward. meanwhile,try and make sure you write the meaning of any acronyms used before subsequently using the acronyms because you are targeting a wider audience than those in the power sector. someone of accounting background like me doesn’t know what GENCOs, MYTO, TCN,DISCOs etc means.
    Thank you.

    Like

    • Hi Stanley, thanks for your comments. GENCOs refers to Generating Companies in Privatised Nigerian Power System. DISCOs are the distribution Companies in charge of electricity network that carry electricity within a zone or defines network area. TCN is the Transmission Company of Nigeria currently managed by Manitoba hydro International of Canada in a three -year Management contract. MYTO is the Multi-Year Tariff Order used by the Nigerian Electricity Regulatory Commission (NERC) to set the income of DISCOs and GENCOs in a five year period.

      Like

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