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    Incessant grid collapse: How to solve Nigeria's energy crisis


    October 4, 2022 - The Nation

     

      Despite promises of improvement, reports of national power grid collapse have become worrisome tales. Incessant national power grid collapse comes across as a troublingly familiar trend as the nation literally shuts down when it occurs.

      Last week, Nigeria's fragile national electricity grid suffered its seventh collapse in 2022, temporarily throwing the entire country into another total blackout as usual. Before the latest collapse, the last time the grid collapsed was in August; it was occasioned by the shutdown of the country's power supply infrastructure by protesting members of the National Union Electricity Employees (NUEE). On July 20, it was also the same tale of woes as the grip collapsed again. It reportedly crashed to zero megawatts in less than three hours. The Nation reported the sequence of its collapse. It crashed to zero megawatts at 11:28 am and 12:00 pm before it was restored to 4Mw with only Omoku and Shiroro producing 3mw and 1mw.

      Yellow Page mobile

      At 12:48 pm, it rose to 40mw and was sent to Abuja Electricity Distribution Company (AEDC). Other Distribution Companies (DisCos) were left with zero unit. It collapsed again to 0Mw by 14:59pm. When the grid collapsed in June, President Muhammadu Buhari had announced that his administration would decentralise the national grid using renewable mini-grids. He also said 'once signed into law, the constitutional amendment bill recently voted through parliament would allow state governments to generate and transmit their own electricity, further facilitating investor participation in our market and enabling states and local businesses to transmit excess supply to the grid.'

      The Nigerian Electricity Regulatory Commission (NERC) also assured Nigerians of improvement in the nation's power sector effective from July 1, 2022. The Chairman of NERC, Sanusi Garba, said the TCN, generation companies (Gencos) and distribution companies (Discos) would sign contracts which compels them to ensure that 5000MW of electricity is generated and distributed.

      He said the contracts were part of the ongoing reforms in the power sector initiated and supported by the government, the Central Bank of Nigeria (CBN), and other stakeholders pushing for improvement in the nation's electricity industry.

      Garba said any of the parties who failed to comply with the terms of the contracts would face sanctions. He noted that achieving the targeted 5000MW would depend on compliance of parties involved. He said: 'So what we are trying to do is, consumers require the service, the Discos should commit to buying this electricity from those who are generating it. Gencos that are generating the power must commit to buy the fuel to generate that electricity, and the only way it can be done and in a sustainable manner is if it is underpinned by contracts.

      'And if any of the market participants defaults, then obviously, there will be consequences for not providing what you said you will do. That is the basic explanation of what we are doing, which will take effect from first of July. So, we are going to start with 5000MW. Discos will commit to buy and Gencos will commit to generate and ensure that gas is there to provide this power by paying for gas. So, there will be no stories of 'I don't have gas to produce.''

      When the grid collapsed in March, the Minister of Power, Abubakar Aliyu noted that the Federal Government had upgraded the Okpai, Odukpani, and Alam VI power plants to improve power supply. He also said the government was planning to begin negotiations with Nigerian Agip Oil Company (NAOC) to create the new Okpai 11 power plant on the grid.

      According to him, the new power plant would contribute 400 megawatts to the grid. He said: 'We wish to reassure all electricity consumers that all relevant agencies involved in the restoration of normality in power supply have been charged to act in the context of the emergency state of the industry.'

      He noted that the Federal Government was poised to purchase and install a Supervisory Control and Data Acquisition (SCADA) system to forestall incessant breakdown. The SCADA system is a software deployed to monitor and control an electrical grid system based on the information from the substations within that system. 'We wish to assure Nigerians that the federal government is working assiduously to deliver on the much-needed reforms and investments, including SCADA, that are critical to improving the capacity and reliability of the national grid,' he added.

      In 2013, when the Federal Government privatised 11 electricity distribution companies (DISCOs) and six generating companies (GENCOs), it was part of plans to expand and upgrade electricity transmission. On the whole, it was to reform and steady the ship of an apparently troubled sector. Despite all that, Nigeria's power system largely remains epileptic, producing and distributing a paltry 4,000 megawatts to over 200 million citizens.

      Sequence of grid collapse

      Data gathered showed that in 2010, Nigeria's electricity sector experienced 42 total and partial crashes; 19 in 2011; 24 in 2012; still 24 in 2013; 13 in 2014; and 10 in 2015. In 2016, the number grew to 28; it came to 21 in 2017; 13 in 2018; 11 in 2019; and four in 2020.Similarly, in the first quarter of 2021, one power collapse was recorded; in the second, it was one, while in the third quarter, two collapses occurred, which brought the total for last year to four. This year, on January 17, the national collapsed; another collapse followed twice in March and twice again in April. Dearth of gas, water management problems, gas pipeline vandalism, among others, were fingered as culprits.

      The national power grid comes across as shaky, frequently experiencing crashes. Last week collapse has made it to more than seven times it has collapsed in 2022. From 2010 to the first half of 2022, the power grid suffered at least 222 partial and total collapses.

      However, the Nigerian Electricity Regulatory Commission (NERC), said:' The stability of the grid network showed improvement in 2020, as the number of total system collapses declined from the previous years. The improvement in the grid stability is attributable to the tighter enforcement and adherence to the provisions of the Grid Code, which mandates free governor control at grid-connected power plants.'

      Efforts to promote power generation and transmission

      There are hundreds of ongoing projects and initiatives, including the Presidential Power Initiative (PPI), a government-to-government initiative to address the power drift. The country is part of the West African Power Pool (WAPP), a specialised agency of Economic Community of West African States (ECOWAS) that includes 14 of the 15 countries in the regional economic community. It was created to develop power generation, transmission and infrastructure. It is also aimed at coordinating power exchange among the ECOWAS member states.

      In 2018, the World Bank announced it was financing a $486 million International Development Association credit for the Nigerian Electricity Transmission Access Project (NETAP), as part of the Transmission Rehabilitation and Expansion Program (TREP). The TREP is aimed at supporting the rehabilitation and upgrade of the nation's electricity transmission lines and substations. This is to boost power transmission network and capacity and allow Discos to improve reliability and supply to consumers.

      Checks revealed that TCN has raised over $1.6 billion through TREP. In June 2020, $120 million was approved by government for the construction of the Kashimbila multipurpose dam in Taraba State which is expected to generate 40 MW. It also signed a six-year, N1.15 trillion deal with Germany firm, Siemen AG for an electrification project to increase power to 25,000 megawatts in 2023.

      The Nigerian National Petroleum Corporation's (NNPC) Abuja 1350-megawatt power plant, which received a $1.16 million from USTDA, would also benefit from the Ajaokuta-Kaduna-Kano (AKK) gas pipeline being constructed. The power plant is being built by U.S. companies GE and Continuum Associates, in partnership with the NNPC. The NNPC also plans to build two more power plants in Kano and Kaduna, bringing the total capacity of the three projects to 4600 MW of electricity production capacity.

      Also, the Federal Government announced that it plans to sell about 2,000 MW of unused electricity from Nigeria to four West African countries of Niger, Togo, Benin, and Burkina Faso through the proposed $570 million, 875 km, and 330 kv Northcore Power Transmission Line project. The Northcore project is funded by the World Bank, African Development Bank, and the French Development Council.

      The African Development Bank is also partnering with the country on a $410 million transmission project and investing additional $200 million through the Rural Electrification Agency (REA) to make electricity available. In 2020, the World Bank approved an additional $750 million Power Sector Recovery Operation (PSRO) loan to ensure the supply of 4,500 MW/h of electricity to the national grid this year. In 2019, it also approved a $550 million loan for Nigeria to develop mini grids and solar systems. With all these interventions, it is not yet Uhuru for Nigeria's power sector.

      Economic cost of poor power supply

      Incessant grid collapse and power outage come at a huge cost to the nation's economy. The cost of power outage in Nigeria is estimated at around $28billion - equivalent to 2 per cent of her Gross Domestic Product (GDP). According to the 2020 Doing Business Report, unrestricted access to electricity is one of the major drawbacks for the private sector.

      Therefore, it is imperative to improve the power sector. Also, the non-oil sectors of manufacturing and services will be crucial to unlocking economic growth and advancement. The World Bank Country Director for Nigeria, Shubham Chaudhuri, stated that the lack of stable power had hampered investment and job creation which would empower 100 million citizens and deliver them from poverty. He said: 'The lack of reliable power has stifled economic activity and private investment and job creation, which is ultimately what is needed to lift 100 million Nigerians out of poverty.'

      Power vital to industrialisation and development

      Business tycoon, Goodie Ibru, noted that the power sector or the electricity supply industry is crucial to the industrialisation and development of any economy.

      'Nigeria has for most part of its history as an independent country been plagued with the problem of inadequate power supply, which is becoming more and more acute because of the growth of the economy and population. On the league table of electric power generation globally, Nigeria is far behind, as the following figures show: China is the world's largest producer of electricity, with 7.8 million Gigawatts per hour (GWh), followed by the United States (4.3 million GWh), and India (1.6 million GWh) in the third position.

      'South Africa, with a population of 59 million (2022), comes in the 21st position with 240,000 GWh; Egypt (population of 102m (2020), 23rd position globally with 199,000 GWh; Algeria (population of 44m (2020), 41st position, 79,000 GWh; Morocco (population of 37m (2020), 38,000 GWh; Libya (population of 6.8m (2020), 67th, 32,000 GWh; and Nigeria (population of 206m (2020), 70th position globally, 29,300 GWh,' he said.

      A former minister of power, Barth Nnaji, said manufacturers cannot survive without stable electricity. He also said the nation needed an industrial power supply, which would remain a pipedream if the power problem is not holistically tackled. According to him, huge cost of self-generation affects profit. 'For instance, if the cost of electricity is about 40 per cent by using diesel, how can you profit? It is not possible because the cost of production alone is so high,' he said.

      'Nigeria should generate 1.26m Gwh'

      Ibru continued: 'Incidentally, Nigeria is the largest economy in Africa and the 27th in the world, with a GDP of $514 billion; and South Africa has the third largest economy in Africa after Egypt with $330 billion. If we benchmark South Africa, taking into consideration that our population is three-and-a half times bigger than theirs, and that our economy is one-and-a-half times theirs, then our power generation should be about 1.26 million GWh. Meanwhile, what we produce is a paltry 29,300 GWh. This shows how grave our power supply challenge in Nigeria is.'

      With expanding population, the country will need to increase power generation by 2030. Yet, about 47 per cent of Nigerians do not have access to electricity and those who do, experience regular power cuts. According to experts, the nation will need to invest in excess of $100 billion in the next 20 years.

      The way forward

      Prof. Moses Oludayo Tade of the WA School of Mines, Minerals, Energy and Chemical Engineering, Curtin University, Australia, advocated more investment in hydro-electric generation facilities. He said: 'Only about 17 per cent of the large hydro resources and about 2 per cent of the available small hydro resources have been deployed in Nigeria.

      'Hydropower remains one of the most reliable energy resources in terms of returns on investment, operation, maintenance and the economy of scales etc. Hence, more investment in hydro generation facilities can be of immense benefit towards achieving both energy and environment sustainability.'

      Tade also said there are suitable sites and highlands in the country for setting up 'Pumped hydro energy storage' system'(PHESS) facility. 'Adequate geographical, hydrological, geological, and topographical surveys and mappings of the suspected regions within the country need to be carried out. It now accounts for 530,000 possible PHESS sites, amounting to 22 million Gwh energy storage identified, using the geographical information system (GIS),' he said.

      However, for Ibru, the way to go is complete privatisation of the power sector. His words: 'The solution is for us as a nation to completely privatise the power sector, including the Transmission Company of Nigeria, as the United Kingdom did 31 years ago, and provide the right market conditions without price controls for investors to come in at every segment of the value chain to invest and tremendously transform our electric supply industry and provide the basis for the full growth and development potential of the economy to be released.'

      Nnaji called for the creation of regional grids as way out of Nigeria's power problem. He noted that regional grids would bring about reliable and quality supply of electricity. He said: 'As a nation, we shouldn't be talking about 3,000, 4,000, 5,000mw of power in a country of 200 million people. We cannot have just national control of power. You can have a national power grid, but there should be regional grids, and there is nothing in the constitution preventing it.

      'States don't have enough money to build their own power plants except maybe Akwa Ibom and Rivers States and the smaller plants built by Lagos State, but typically, it's very costly and capital intensive. But if you have regional grids, then states can now work with the private sector to build reliable power projects. You can have that in different places, reliable, quality electricity.'

      The NERC, in a statement, noted that it was exploring 'options for the enforcement of under-frequency load shedding scheme that had been put in place to provide an added layer of security for the grid in the case of a sudden loss of generation.' Whether or not this will resolve the lingering problem of power outages remains in the realm of mere conjectures.

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