24August2010
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By Bassey Udo
August 24, 2010
What appears to be a final solution to the epileptic power supply in the country was unfolded yesterday as government approved the steps for the sale of 11 power firms.
The firms are to emerge out of the Power Holding Company of Nigeria (PHCN). This is coming as the government expressed deep concern over the high aggregate technical, commercial, and collection losses suffered in the course of electricity generation and distribution in the country.
At present, a large volume of electricity generated by the PHCN hardly gets to the final consumer due to technical reasons, including defective transmission and distribution lines, while billions of naira is lost every day due to the inability of the power company to collect accumulated revenues from debtor consumers, including government institutions.
But as part of the strategy approved last week for the core investors in the 11 power distribution firms created out of the PHCN, the National Council on Privatisation (NCP) underlined the need for prospective bidders to demonstrate capacity to curb these losses.
How to move the sector forward
The selection of bidders, the privatization agency said, must not only be on the basis of “efficiency improvement – reduction of Aggregate Technical, Commercial and Collection (ATCC) losses that they would achieve over a five-year period, but also that the preferred bidder “yields the highest net present value in terms of consequential benefits.”
The privatisation council, chaired by vice president, Mohammed Sambo, noted that the current ATCC losses, estimated at between 40 and 50 percent of the electricity distributed through the various power distribution companies, is unsustainable and must be halted if the country’s electricity industry is to be attractive for full private sector participation.
Read More on 234Next
Related Article on BusinessDay
9June2010
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By Ike Abonyi on 08/06/10 in ThisDay Newspaper
The Presidency has assured Nigerians that the National Integrated Power Project (NIPP) which is critical to the generation of power would be delivered on schedule.
Vice-President Namadi Sambo who spoke on the issue yesterday said although there are other sources that would contribute to steady power supply, the government is determined to make the NIPP work.
He stated the government’s mind in a chat with State House Correspondents in Abuja yesterday.
“We are not going to bandy figures at this level but what we are saying is that we will deliver NIPP on schedule as already agreed and which I am sure all of you know,” the veepee said.
“We cannot also say if the contribution will be in percentage time because we know also that it is not only NIPP that is going to bring in power, there are also other sources which will bring in power but the NIPP will deliver power on its own part” he added.
Sambo who chaired his first meeting of the presidential committee on NIPP at the Presidential Villa on Monday, had earlier informed stakeholders that the administration would not relent on its determination to solve the country’s power problem.
The “NIPP programme has a schedule that I am sure you are aware of, the projects are not coming all coming up at the same time. I think the programme has been issued earlier and what we are saying is that we are satisfied with the progress. We believe that the project will be deliver on schedule,” said Sambo.
The vice-president summoned contractors and others involved in the NIPP project to secure their commitment to achieving the target date for completion.
Briefing newsmen after the meeting, Minister of State for Power Nuhu Wya said the experience of the vice-president who had been a member of the committee as governor of Kaduna State came handy at the parley.
The power minister who declined to give the current electricity generation level in the country stated that “we are managing the challenges in a better manner, so we are bound to have better results now. It is an ongoing process.”
Ekiti State Governor Segun Oni told reporters after the meeting that the entire NIPP scheme including gas supply, security of installations and contractors as well as compensation to affected communities was reviewed.
Oni also confirmed the administration’s plan to decentralize electricity generation so that each plant will deliver electricity to its immediate locality, in order to avoid waste and extra cost of linking to the national distribution system.
The decentralization policy is expected to reduce a situation whereby large parts of the country experience blackouts whenever a single power plant suffers breakdown.
1June2010
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Culled from an article by By Obinna Ezeobi Tuesday, 1 Jun 2010 in The Punch Newspaper
soon to enjoy 16 and 24 hours power supply, according to a proposal by the Presidential Action Committee on Power.
Also to have 16-hour minimum electricity like Lagos are cities with what the committee called “stranded generation capacities.” The cities are Kano, Kaduna, Ibadan, Onitsha and Nnewi. The cities were chose because they are regional industrial and commercial hubs.
Port Harcourt, Rivers State; Aba, Abia State; Uyo, Akwa Ibom State are grouped by the committee alongside Abuja for 24-hour uninterrupted power supply
These are the highlights of a proposal by the PACP Action Plan that will alter the electricity supply system operated by the Power Holding Company of Nigeria.
Under the system, all generated electricity in the country would be transmitted to the National Grid and distributed by the National Control Centre, Osogbo, among the 11 electricity distribution companies.
The system would make it impossible for states that have built their own independent power plants to get steady supply because the electricity they generate is put into a pool instead of being used directly by them.
A report on the preliminary presentation of the proposal by the Prof. Barth Nnaji-led committee obtained by our correspondent in Abuja on Monday, showed that Abuja is to enjoy 24-hour regular power supply because of its closeness to the Shiroro hydro plant.
Port Harcourt is also privileged because of the Rivers State-owned independent power plants in Trans-Amadi and Omoku. Uyo is benefitting due to Akwa Ibom State-owned Ibom Power Plant and Aba because it hosts the Geometric IPP.
According to the report, state capitals, urban and semi-urban areas are to enjoy 18-hour electricity while remote communities negatively impacted by transmission from Maiduguri, Kastina and Sokoto are to get about 12-hour supply.
The PACP also suggested that rural communities connected to the national grid should get 12-hour supply of electricity.
Read the rest of this article here
28May2010
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Culled from an article by Onyebuchi Ezigbo 26 May, 2010
Abuja — Worried about the poor state of electricity generation in the country, President Goodluck Jonathan has directed the ministry of power and other relevant agencies to immediately restart the implementation of power sector reforms.
The Federal Government is also jointly executing a $300 million pilot project in renewable energy, with the provision of $100 million, while the World Bank is making available $200 million.
And the Presidential Action Committee on Power has said it is working assiduously to fast track improvement of electricity supply within the next three to six months. The Minister of State for Power Mr. Nuhu Somo Wya who conveyed the president’s order also said processes leading to the privativation of the generation and distribution networks had already commenced.
The power sector reform formulated by the former President Olusegun Obasanjo administration was designed to have the electricity generation and distribution assets of the Power Holding Company of Nigeria (PHCN) privativatised. But after the initial unbundling exercise to create semi-autonomous entities, the reform was discontinued.
Speaking yesterday at the opening of a workshop on renewable energy jointly organised by the Ministry of Power and the World Bank, Wya said the government had the will power to reform the power sector. He disclosed that international investors had shown interest in developing the power sector.
They have however expressed reservations about the unfavou-rable environment which the Federal Government is working hard to address, the minister explained.
“President Goodluck Jonathan who is the Chairman of the Presidential Advisory Commit-tee on Power has directed that reforms in the power sector be recommenced immediately. We are already putting machinery in place to make sure these reforms are implemented,” said Wya.
Read the rest of this article here
10May2010
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Hundreds of travellers were, on Sunday, left stranded at the international wing of the Murtala Mohammed International Airport, Lagos, because of power failure at the facility.
An employee of the airport, who asked not to be named, said the three-hour blackout was caused by a broken cable which transmits power to the terminal.
“We cannot power the airport, whether generator or not, for the cable is of vital importance,” the source said
Hours after the blackout, the public affairs manager for the airport, Akin Olukunle, said the problem had been rectified and apologised to passengers for the inconvenience.
Officials had complained that poor power supply at airports is affecting service delivery.
Officials of the Federal Airports Authority of Nigeria, the agency in charge of airports in Nigeria, have often complained that irregular power supply is a challenge to them.
Henry Anyanwu, a regional manager of the agency at the Port Harcourt International Airport, said on May 5, that “Power is the greatest problem we have at the airport. Diesel is the problem”.
“We use average of four trucks monthly, which is about 136,000 litres every month. This is because all the six generators here are not yet in operations.”
Culled from 234Next of 10/05/10
23April2010
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An excerpt of an article by Elizabeth Archibong Published in 234Next on April 23, 2010
The committee on power created by Acting President Goodluck Jonathan to solve the problems in the sector has said it will make public its blue print within 30 days.
Speaking to journalists at the end of a committee meeting at the presidential villa yesterday, Minister of State for Power, Nuhu Wya, said the committee will be effective because it is working under the acting president’s direct supervision.
“The meeting is essentially convened by the acting president with all the stakeholders that will make things happen in the power sector and it is generally agreed that all hands should be on deck to move the power sector forward,” Mr. Wya said.
“The final documentation of the programme and the vision are being worked out and it will be announced to Nigeria.
Read the rest of the article in 234Next.
20April2010
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Excerpts from the concluding part of article by Ijeoma Nwogwugwu (email:ijeomanwogwugwu@thisdayonline.com) on 04.19.2010
It is gratifying that the first part of this series elicited a very important e-mail from an old friend and colleague Lai Yahaya. Lai, who is now at the John F. Kennedy School of Government in Harvard University, once worked for the Bureau of Public Enterprises before leaving to work in the oil industry overseas, and returning more recently to consult for the Nigerian office of the UK Department of International Development (DFID). What was most revealing about the e-mail was the amount of work that had been done last year for the power ministry, but was largely ignored for reasons that remain difficult to understand.
To be honest, I had some inking of the assistance DFID was providing the ministry through its Nigerian consultants. I was also aware that some kind of plan with a January 1 2010 take off date had been formulated for the ministry by these men and women. But it never saw the light of day. It is even doubtful that it was ever brought to the attention of the presidency or Federal Executive Council for consideration and approval.
Lai last week graciously sent over some of the documents that were put together for the ministry, the most significant of which was the 10-Step Nigerian Electricity Supply Industry (NESI) Action Plan for Sector Viability. By some sheer coincidence, this 10-step plan and my suggestions for a blueprint in the first part of this article were in lockstep with each other. Admittedly, the 10-step plan was so much more detailed than my article as its drafters obviously had better access to data and are more knowledgeable about the market structure and trading arrangements that must be put in place for accelerated sector viability. Nonetheless, the fact still remains that there is workable document that provides the actions points and measures that can and must be adopted by this government if it seriously wants to address our electricity issues.
So I’ll just crave the indulgence of its authors by outlining and summarizing these ten steps and only hope that our policy makers can summon the will to implement it:
A Viable Pricing Regime
As indicated last week, no significant progress can be made in developing and attracting investment in the Nigerian electricity sector without introducing a viable pricing regime that makes it attractive for operators to invest in generation, distribution, transmission and gas infrastructure. The 10-step plan was realistic enough to recognize that more than 80 per cent of electricity in the next five years will be generated from thermal (gas) sources. This comprises existing PHCN power stations, independent power plants (such as AES, Shell and Agip) and realizable NIPP plants that are expected to be added to the grid by June 2011.
A combination of the gas and hydro powered stations will give rise to 10,000MW of electricity. But actual maximum deliverable capacity will be stuck at 6,000MW for a number of reasons: 4,000MW of available capacity will be gas constrained; even in the absence of gas constraints, it is highly unlikely that the transmission capacity will be sufficient to evacuate more than 6,000MW; and likewise, its doubtful that the distribution companies will be able to handle loads of more than 6,000MW because of aged equipment, underinvestment and under-maintenance.
To address this, it is important that the government commences the implementation of the multi-year tariff order adopting a start-off date and an end by date of say, three years. The MYTO will provide for the gradual increase in electricity tariffs which will allow for the subsidy element to be reduced until it is eliminated completely. The advantage of a graduated increase in tariffs is that consumers will not be made to pay for electricity supply that may still be epileptic.
This notwithstanding, it pays consumers to pay more for electricity from the power grid than to run their homes and business on self-generated power sources. Currently, it is estimated that the unit cost of self-generated electricity in the country is at least N45 per KWh (on a conservative estimate). To put this into perspective, therefore, Nigerians spend more than N1.1 trillion per annum on self-generated electricity.
It is estimated that the MYTO will ultimately provide for an average and levelised tariff of N21 per Kwh, while the total cost of the short lived subsidy of approximately $4.8 billion will be financed through government bonds repayable from the proceeds derivable from privatising PHCN and NIPP companies. In other words, the subsidy element does not have to be financed from the federal budget.
Implementation of the MYTO will turn a bankrupt electricity sector into a financially viable one, will enable generation companies pay market determined prices for gas which will incentivise oil companies to invest in gas infrastructure, and embolden private investors to start making large and desperately needed investments in the electricity sector. More importantly, it would make existing PHCN and NIPP companies more attractive to investors and strengthen the government’s position to attract better returns from the privatisation process.
Read the rest of this article in Thisday Newspaper
15April2010
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Culled from an article by Ijeoma Nwogwugwu (ijeomanwogwugwu@thisdayonline.com) on 04.12.2010
I have often wondered what it means to declare a “state of emergency” in the power sector. No one has been able to explain what it means. Would it involve the sack of PHCN workers and replacing them with other hands to run and manage our power infrastructure? Would it amount to an astronomical increase in electricity tariffs? Does it mean that private companies given licenses three or four years ago to invest in power stations will be given marching orders to complete them, failing which their licenses will be withdrawn? Or does is simply mean that an accelerated programme will be deployed to expand and upgrade power infrastructure to meet the yearnings of Nigerians? Quite frankly, no one really knows.
Since no clarity has ever been provided by this administration on what its emergency programme for the power sector entails, I can safely dismiss it as a sloganeering campaign devised by this government to give some semblance of seriousness about meeting our power needs. If we must be honest, resolving our power issues is not as difficult as it seems. With the right commitment, a phased approach, and adherence to the power sector reform programme that was given fillip with the enactment of the Electric Power Sector Reform law five years ago (yes, it’s been five year since the law was passed), appreciable results can be achieved.
But before the Acting President and Minister of Power, Goodluck Jonathan, proceeds; first, he must jettison the slogans. They are needless and a distraction from the issues at hand. Instead, a comprehensive programme with clearly defined timelines should be drawn up and specific groups/bodies/organisations given the tasks to meet them.
The programme should be made public so that it can be monitored and the society knows who to hold responsible for falling behind at their assignments.
A guide on how this can achieved is given below. It may not be comprehensive, but it will attempt to capture a lot of the salient issues deterring us from achieving energy sufficiency and how to resolve them.
Electricity Blueprint
In the next week, the power ministry must urgently invite all the stakeholders and groups to a meeting to fashion out a comprehensive blueprint for the power sector. The stakeholders must include PHCN and its distribution, generation and transmission companies, the Bureau of Public Enterprises, Central Bank of Nigeria, Ministries of Finance, Petroleum Resources, Water Resources, Defence and Steel and Solid Minerals Development, the Nigerian Electricity Regulatory Commission, the Nigerian National Petroleum Corporation and its subsidiary Nigerian Gas Company, international oil companies or their representative(s) from the Oil Producers Trade Section of the Lagos Chamber of Commerce and Industry, representatives of independent power producers, representatives of commercial banks, and labour unions.
Already, a committee along those lines has been established. It only needs to be expanded so as not exclude other relevant stakeholders whose input will be required for the blueprint. This committee should within two weeks develop and publish a comprehensive programme (the “Blueprint”) that comprises three phases, takes into cognisance the challenges mitigating against stable electricity supply in the country, and how these can be tackled head on.
At this stage, the information made available by stakeholders such as PHCN and its business units, the oil companies and NNPC on the status of power and gas infrastructure must be accurate or close to accurate. If it is inaccurate, resolving a lot of the issues in the power sector would run into troubled waters from the get-go.
In drawing up the blueprint, its drafters must also adopt a phased approach and include expected deliverables defining who should be held responsible for what. With this, a lot of pressure would be brought to bear on a body/organisation to meet its target(s). Where there are impediments or challenges to delivering its set goal, the government should name, shame and sanction those responsible for dragging us back.
Read the rest of this article in ThisDay Newspaper
1April2010
Posted by AdaUgo under: Uncategorized.
In the early 1960s the Niger Dam Authorities (NDA) and Electricity Corporation merged to form the Electricity Corporation of Nigeria (ECN). After the Nigerian civil war, the management of ECN changed its name to NEPA. The name was not so recently changed to Power Holding Company of Nigeria (PHCN). The evolution apparently is in Name only as power outages are now seen as normal by the citizens of the Nigerian populace.
According to some material I was reading earlier today, an estimated $6-16 billion has been dumped into the Nigerian energy sector in the last decade, with the goal of increasing the peak power output from 3,000 megawatts (MW) in 1999 to 10,000 MW by now. At the start of 2009, Nigeria’s peak output was only 3,400 MW–14 percent of the 25,000MW it needs.
One recent study found an incredibly strong correlation between GDP growth and the availability of power. Which makes sense–Nigerians spend about N16.408 trillion ($117 bn) annually on fuelling generators in the country. And without electricity, the cost of commerce is astronomical (prices for a haircut at the local barber would be double – One for “NEPA” and the other for “Gen”).
In the last three months, at the little firm where I work, we’ve run the business on three gennies. At home, same thing. I got home last night and the refrigerator, which had for a while now served as a cupboard, had cold water in it. I was shocked. No be so e suppose be…
An excerpt from an article by Dayo Olopade:
”The author of the GDP study sums up the dilemma: “the more the efforts are that have been made in the power sector, the more troubled things seem to become. The more money is spent on the sector, the more epileptic and unreliable the performance of the sector appears to be.” In a society that is often quite clannish–wherein family concerns trump collective civic action–it’s remarkable that someone hasn’t found a way to make real energy independence (not simply from “Gen” living) attractive. Legislation or other private encouragements for renewable electricity sources, especially solar power generation, seems the only way to unlock the spiral of theft and economic repression that NEPA represents.”
(Dayo holds degrees in Literature and African Studies from Yale University, and is the Washington reporter for The Root.)
See? So much is being said…and done, yet nothing is happening…The real problem methinks, is naught but corruption. The makers and distributors of generators cannot sit back and watch the power issue be resolved.
However, If we don’t stand up NOW, Nigerian Electrical and Power Authority (NEPA) will continue to “take light” OR “Bring” “Half or no current”. More people WILL be burned in kerosene lamp accidents, or thoroughly harassed by monoxide fumes from generators OR Barbecued alive by the gennies that they have, out of dire need, acquired for their households at pocket rendering cost…And more of these death traps will be shipped into Nigeria. We will buy. The cycle will continue…
Prayers? Yes. Good…But God ain’t coming down to do this. It starts with the man in the mirror. You…and Me. Do we want change? Of course we do. Are we ready to pay the price? Now, that is the question…
8March2010
Posted by AdaUgo under: Uncategorized.
Excerpts from a 234Next article written By Bassey Udo (March 8, 2010)
Minister of Power Lanre Balalola at the weekend called for the setting up of a technical management team for the N500billion power fund set aside by the Central Bank of Nigeria (CBN) to boost development of the nation’s power sector.
“To ensure effective utilisation of the facility and development of the power sector, the CBN should consider the establishment of a fund for the sector that provides credit support for independent power projects (IPPs); a more central role by CBN in the provision of guarantees and securitistion arrangement; assistance with hedging of foreign exchange rates,” he said.
He said this team should comprise representatives from the ministry and the CBN, to ensure that a holistic approach is adopted in the effective utilisation of the fund, taking into cognisance the challenges of power transmission and distribution as well as fuel supply and other technical variables to avoid the problem of abandoned projects.
The CBN last week announced plans to provide N500billion facility for investment in debentures issued by the Bank of Industry (BOI) for investments in emergency power projects, dedicated to industrial clusters in various parts of the country.
Read all about it: http://234next.com/csp/cms/sites/Next/Money/Business/5537016-147/story.csp
