By Dapo Akinrefon
OVER the years, the issue of power
generation has been Nigeria’s biggest
problem. Since the advent of the Fourth
Republic in 1999, power has been in the
front burner, without an end to the
problem. Past administrations proffered
solutions to tackling the hydra in the
power sector but have virtually failed in
this regard. Interestingly, politicians have
had to dwell more on providing solutions
to this during electioneering campaigns.
Often times, the power issue takes
centre stage during electioneering
campaigns but not much has been
achieved over the years in this regard.
Where we are: Unbundling NEPA:
Besides, prior to the enactment of the
Electric Power Sector Reform (EPSR) Act
2005, the Federal Government of Nigeria
(FGN) was responsible for policy
formulation, regulation, operation, and
investment in the Nigerian power sector.
Regulation of the sector was done
through the Federal Ministry of Power
(FMP) with operations through the
National Electric Power Authority (NEPA).
To address the twin issues of NEPA’s poor
operational and financial performance, the
FGN amended the then prevailing laws
(Electricity and NEPA Acts) in 1998 to
remove NEPA’s monopoly and encourage
private sector participation. The
amendments, however, were not far-
reaching. This informed FGN of the need
to undertake holistic policy, legal and
regulatory reforms.
The National Electric Power Policy, 2001,
specifies the reform agenda, while EPSRA
provides the legal basis for the
unbundling of NEPA, the formation of
successor companies and the privatisation
of the latter. EPSRA also provides for the
development of a competitive electricity
market, the establishment of a dedicated
regulatory body and the establishment of
a rural electrification agency.
Consequently, FGN established the Power
Holding Company of Nigeria (PHCN – the
initial holding company) and subsequently
unbundled it into eighteen (18) successor
companies. Strategically, the objectives of
the reform include: the transfer of
management and financing of SC
operations to the organised private
sector; the establishment of an
independent and effective regulatory
commission to oversee and monitor the
industry; and focusing the FGN on policy
formulation and long-term development
of the industry.
This step was perceived by many to lead
to increased access to electricity services;
improved efficiency, affordability,
reliability and quality of services; and
greater investment into the sector to
stimulate economic growth. However,
nothing much seems to have been
achieved in this sector. And Jonathan
tried: Though the President Goodluck
Jonathan administration worked round the
clock to the solve the epileptic power
supply, its successes were limited.
Only recently, President Jonathan
inaugurated the rehabilitated Unit 6 and
the overhauled Unit 4 of the Egbin Power
Station in Lagos, which effectively added
240 megawatts to the national grid and
also restored the power plant to its full
capacity of 1,320 megawatts. With the
completion of the projects, the country’s
power generation capacity now stands at
5,500 megawatts for the first time in
history but actual generation was 3,800
megawatts as a result of the recent acts
of vandalism on the Escravos-Lagos
pipeline network, which supplies gas to
some power stations.
Powerstations
Speaking at the official inauguration of
Units 4 and 6 at Egbin, the president said
the initiative was a major milestone in
the government’s power reform
programme. But not many Nigerians are
impressed with this development.
Tinubu’s ENRON: During Bola Tinubu’s
administration,the governor was able to
pressurise the federal government into
approving the take-off of the multi-
million project by ENRON International
Energy Corporation.
Tinubu had boasted that “before long,
Lagosians will have at least 270
Megawatts dedicated to Lagos State in
addition to the Statutory allocation from
NEPA that will make sure that at any
given time, between 80 per cent to 90
percent of our electricity problems are
solved.” “Now with the take-off of
ENRON, Lagos State stands to benefit
from this project,” Tinubu noted.
Perhaps Tinubu’s dream is becoming a
reality. The Tinubu administration did all
that was humanly possible in order to
achieve the ENRON breakthrough while
the deliberations with the federal
government lasted. Tinubu then asserted:
“What we have achieved now is our own
big giant step in the moon.”
He explained that the reason why he has
been excited by this breakthrough lies in
the fact that “we made a promise to the
electorates in Lagos State that ours is a
commitment to the infrastructural
development that will lead to economic
growth, poverty alleviation, independence
of small scale industries, where research
and development, and the hopes and
aspirations of big and small professionals
will flourish. This is the beginning of that
joy and we are going to achieve it.”
Lagos IPP: However, the Lagos State
government has tried to take the bull by
the horns in solving the power problem.
The commencement and installations of
power plants in strategic places across
the state has gone a long way in reducing
the epileptic power problem.
Powergeneration
But one snag for the Lagos government
has always been that of distribution. This
is as a result of the fact that only the
Federal government has the franchise of
power generation and distribution. To
ensure under-served commercial and
industrial districts get access to reliable
power supply via the use of Independent
Power Projects, the Lagos State
Government successfully commenced
operations in three power plants – AES
Barge, Akute Power, Island Power Project
and one transformer factory – El Sewedy
transformer factory by means of Public
Private Partnership (PPP).
There are plans under-way to develop
multiple IPPs across the state, currently
the Alausa Power Project and the Island
Power Project Expansion are currently in
development. Governor Babatunde
Fashola said it also showed that the
money to improve the Nigerian economy
is in the country, “since we don’t need
the World Bank to come and do this for
us.”
The governor noted that, “let no one say
that he has no money to deliver power
for the entire country. This is the limit to
which the law allows us to do, but we
have done this to make a statement that
power can be generated. So, when they
come with lies that power is impossible,
you can tell them that we have power
here; we make it possible.”
The Lagos template
Already, the Lagos State government has
recorded a feat as the state secretariat,
Alausa became the first in the country to
run its own power. Fashola, recently
flagged off 10.6 Megawatts, MW, Alausa
Power Project, with the capacity to power
the entire state Secretariat, Alausa and
Obafemi Awolowo Way. The project was
executed through Public Private
Partnership, PPP, with Oando Gas and
Fidelity Bank Plc.
The Alausa IPP is expected to boost social
welfare component for the public officers
as the plant has an impact in improving
the work environment, the work quality,
the work ethics and improved efficiency
as well as improve power supply generally
in the state. The power project, will
supply power to 62 buildings and 160
departments within the secretariat to
bring an end to the usual epileptic power
supply in the area.
Expressing his reservations over the
inability of state governments to generate
its own power, Fashola said, “it is bad
enough that we don’t generate our own
electricity, the public power is 12. 75k per
kilowatts per hour, but we are generating
our power at sometimes four or five
times more than that.” According to
him,”in Magodo for example, they spend
N8million a day in the whole estate on
diesel, when it should have cost them just
about N2 million public power.
Even Lekki spends about N12m a day,
when it should have cost them about
N3million a day. So these are the
numbers we are seeing. If you buy energy
saving bulbs, it may be more costly but
you would save seven times more over a
longer period when using it.”The
governor, who re-iterated that the
solution to unemployment and jobs
creation, improved economic situation
lies in made in Nigeria goods, and
expressed delight that the Alausa IPP is
another made-in-Nigeria project,
delivered by a Nigerian government with
two Nigerian companies using largely
Nigerian personnel to solve a Nigerian
problem.
He disclosed that, according to records,
the project would be a substitute for over
120 generators which were being used at
the Secretariat at the last count. The
state government is not resting on its
oars, as it intends to focus, within the
next 12 months, on public power, schools,
hospitals, street-lights, courtrooms,
religious institutions, among others.
Fresh IPPs are scheduled to also
commence in; Lekki to power the Lekki
Water Works, Ikeja GRA that will power
the General Hospital, High Court, the
Police Command and the Ikeja Water
Works expected to be fully completed in
2016. “We already have a transformer
manufacturing plant and so we are going
ahead to ensure that when the power is
ultimately here, the components to bring
it to peoples’ home will be available.
What we hear before is that well, there is
generation but there is no gas, so we
don’t want to get to that when the talk
would be there is electricity but there is
no transformers, so we are already ahead
of the curve and that factory will also be
manufacturing meters in the plant,” the
governor said. The Group Managing
Director and Chief Executive Officer of
Oando Oil, Mr Wale Tinubu, explained
that Alausa IPP will run primarily on gas
and reduces pollution that emanates from
diesel generation that was hitherto in use
across the secretariat.
Enhancingsecurity
He added that the Alausa Secretariat
campus and Awolowo Road Street light,
will also be powered by the power plant,
thus enhancing the security of the citizens
at night, adding that the strong
commitment shown by the Lagos State
government before the commencement
of the project ensured that the
negotiations did not flounder. On her
part, the General Manager, Lagos State
Electricity Board, Mrs. Damilola Ogunbiyi,
said that the IPP would save government
about N30 million.
APC’s solution to power difficulty
During the 2015 electioneering campaign,
the All Progressives Congress, APC, told
Nigerians its plan for steady power when
voted into power. During one of its
campaigns, Vice President-elect, Prof.
Yemi Osinbajo, said an APC-led Federal
Government can provide steady power
supply by installing Independent Power
Projects in strategic parts of the country.
Perhaps this informed Osinbajo’s recent
visit to Lagos state to study the perceived
success of the state government’s IPPs.
As a way of using the Lagos state IPP
template to tackle power supply across
the country, Osinbajo said already, IPPs
were being used to provide steady
electricity in courts and hospitals across
Lagos State and this could be expanded.
According to him, “what we must
understand is that the Federal
Government has privatised power
distribution and generation, not
transmission and we feel transmission
should be privatised as well.
Proper gasinfrastructure
We don’t have power today because
generating plants can’t get gas supply and
this is also largely because of the bad
pipes. If we wait until we can set up
proper gas infrastructure, it can take 10
to 15 years before we can get steady
power supply.” He was quick to add that
“we have decided to decentralise power.”
“For example, in Lagos we have IPPs in
Marina which generates 10 megawatts
and it powers hospitals and courts. We
also have in Ikeja. They do not have
problems of gas supply.
The IPPs are directly connected to the
place we want it to power. If we can
mobilise our trade groups in certain
areas, we can provide 24-hour power for
them. Also, we can then provide for local
governments. In Lagos for instance, the
state government already knows the
power needs of each local government so
we can provide IPPs as well,” he said.
Osinbajo further said the price of gas
must also be deregulated so that more
private companies could invest in the
sector and increase power supply. With
his victory at the just conducted polls, the
President-elect, Maj-Gen Muhammudu
Buhari (retd), has an herculean task of
ensuring the power problem in the
country is resolved soon.