Excess Power Supply in Nigeria?

 Nigerian power sector strategy over the past decade had focused on breaking up the national power company and developing gas-to-power projects. The unbundling process seems to have had little impact, while much of the new gas-fired capacity is unused because of gas supply problems. Nigeria’s power sector has been a reflection of the economic growth strategy of the country. Power is a strategic infrastructure and represents the most important requirement for moving the economy forward. In post-independence Nigeria, the need for large-scale investments in power infrastructure resulted in government dominance in the sector’s activities. The Power Holding Company Of Nigeria (PHCN) is a government-owned utility company responsible for the generation, transmission, and distribution of electricity throughout Nigeria. It is estimated that about 40 percent of Nigerians have access to electricity. Of the 6113 MW of installed generating capacity, only about 3300 MW is available, whereas demand is estimated to be more than 10,000 MW. The transmission and distribution infrastructures are in a dilapidated and deplorable state because of lack of maintenance and inadequate funding, making it difficult to evacuate power from generation sites to consumption points. Electricity tariffs are below the cost of service and there is poor revenue collection performance as about 30–40 percent of the power supplied is never billed. This has resulted in the dismal performance of the utility, financial losses, and its consequent inability to invest in expansion and improvement. Electricity generation, transmission, and distribution account for less than one percent of Nigeria’s Gross Domestic Products [GDP], but fifty-four percent of the share of Utilities (electricity and water supply) in the GDP. They constitute a small economic activity in Nigeria about her size and population. However, it is a growth industry that, permitted to operate with minimal Government intervention, could be a major contributor to the national economy. The electric power sub-sector in Nigeria is dominated by the Power Holding Company of Nigeria [PHCN], a Government

parasternal. PHCN supplies most of the electricity consumed in Nigeria, supplemented with power generated from privately-owned plants. In Nigeria, there is the widespread private provision of electricity usually referred to as ‘captive power supply’. In most cases, captive electric power supply has been a response to irregular public power generation and transmission. Before the advent of hydro-generated electricity from the Kanji Power Station, the electricity supply in the country was largely by the thermal system. However, the hydro system ushered in by Kanji in the early 1970s started giving way to the thermal-dominated system again some years later. This was due to the perennial water-flow problem of the River Niger at Kanji, escalating costs of establishing hydro-plants, and their long gestation lags. Electricity generation in Nigeria is characterized by excess capacity and inadequate supply. It has been observed that peak demand is often about one-third of installed capacity because of the non-availability of spare parts and poor maintenance. A poorly-motivated workforce, vandalization, theft of cables and other vital equipment, accidental destruction of distribution lines, illegal connections, and resultant over-loading of distribution lines, are additional major problems of the PHCN. These have been responsible for unannounced load shedding, and prolonged and intermittent outages which most consumers of electricity in Nigeria have had to contend with over the years. The situation will change with the deregulation of the sub-sector. The Power Holding Company of Nigeria [PHCN], is virtually the only source of statistical information on electricity supply and demand in Nigeria. This is because PHCN has a monopoly on the public distribution of electricity in Nigeria. Electricity purchased by the PHCN from Nigeria Electric Supply Company (NESCO), Shell Company, and African Timber and Plywood Company (AT & P) is usually reported as such by PHCN. Also, some agencies, notably the National Bureau of Statistics (NBS) and Central Bank

of Nigeria (CBN), publish statistical information on electricity supply and consumption, as obtained from PHCN. All the statistical information on electricity supply and demand is produced in the course of day-to-day administration and as reported to the headquarters by PHCN’s Power Stations, Zonal offices, and the private generating plants which sell electricity to PHCN. Although the PHCN has computerized its billing system, it has not done so for the production of its administrative statistics. The PHCN does not have adequate electronic data processing facilities to enable it to computerize the production and storage of its administrative statistics. As a result of its dominant position in the generation, transmission, distribution, and sale of electricity in Nigeria, the PHCN has the unique opportunity of establishing and maintaining a comprehensive database of electricity production and consumption statistics. With these statistics, non-responsive generating stations or sales offices can easily be identified and compelled to comply. Also, although there are illegal consumers these can be reduced to the barest minimum by a more vigilant PHCN since illegal connections to PHCN’s lines can be detected and penalized. Metering and billing are the least efficiently executed tasks by PHCN. Although every consumer is supposed to receive two monthly bills based on estimated consumption and a third or quarterly bill which reflects actual consumption after the meters are read, in some cases the meters are never read in six months and in other cases the estimates are arbitrary. There is a need for a better system of billing and motivation for meter-reading staff to improve their performance. Disaggregated data on consumption is difficult to capture using the current PHCN approach. Thanks for Reading! Drop a like and a comment and don’t forget to share Also visit my webpage for more about the writer CRYSTAL MEDIA