Economy and DevelopmentEnergy

Electricity problem: Have we lost the battle?

While the world is negotiating another energy transition curve, the Nigerian Government says it not responsible for lack of electricity in Nigeria. According to the Minister of Power, Babatunde Fashola,
“The people who are operating the power sector, generation and distribution are now privately-owned companies. I am here because I am concerned. If your telephone is not working, it is not the minister of communication that you go to. Let us be very clear. So, for those of you who want to weaponize electricity, face the businessmen who have taken it up. Let us be honest. If your bank over -charges you interest, is it the Minister of Finance you go to? So, let ’s be clear. This is now a private business by an Act of Parliament 2005.”

Power Minister, Babatunde Fashola. Credit: bellanaija.com

It is true that the sector has been privatized but the government remains heavily involved. Government owns 40% in the distribution companies and exclusively owns the transmission company of Nigeria. Besides, since privatization in 2013, the government has advanced the power sector billions of naira to help stabilize the generation, supply and distribution of electricity.

Meanwhile, as things stand today, the biggest bottle neck in the power sector is in the distribution of electricity where the Federal Government is a shareholder.
Whereas the generating companies are pushing out between 7000 to 7500 MW, the distribution companies reject half of what is generated, leaving the country with about 3500-4000MW for distribution. Even then, not all the half taken by the distribution companies gets to customers due to system instability and frequent collapse. And the GENCOs get paid 10% of the value the supply each month.

The energy sector is so critical to economic development that it will always remain Government’s ” baby and headache” whether or not Government is a direct shareholder. For instance, the United States is today behind in renewable energy development and battling with  climate change issues mainly due to lack of an aggressive policy on the sector by Washington.
However, the state of California on its own, decided to take a different path and it is today the leading state on renewable energy in the United States. A few days ago, a new law requiring all new homes in California to be built preinstalled with solar panels from January 1, 2020 was passed. The rule applies to all single-family and multifamily residences of three stories or fewer. Other state governments are reported to be copying the Californian example.

In Europe, the governments of Germany, France and the United Kingdom adopted an aggressive policy on the generation of electricity from renewables years ago. Today, those countries are far ahead of the United States. Australia is also reported to be copying the European model. In  the south west of that country, electricity from renewables is being used for base supply with the introduction of Tesla industrial batteries. There is no need to talk about China which has taken electricity generation, transmission and distribution to a level that surpasses any other country in the world in the history of mankind.

The bottom line is that Government can not give up on ensuring that the power sector works in such a way that it will “turbo charge” economic activities. Nigeria needs to use every resource it has that can be used to generate electricity. The private sector alone can never get the country to where  it should be in the energy sector.

Therefore, if Government passes the buck, EVERY THING ELSE it does in the name of economic development is meaningless.

Government can not give up. The country is in darkness. Image credit: creativecafe.com

If the country got it wrong with the privatization process in 2013, and that appears to be the case given what has happened since then, it has to find a way to remedy the situation. Government can not expect the private sector to undo a hundred and twenty-two years old tragedy.

What we need to do.
1. Distributed generation is the way to go. We may need to tweak the current model of compartmentalizing generation and distribution. Discos are “sitting” over assigned franchise areas whose demands they do not have the capacity to meet. This implies that the sector needs further deregulation to make it possible for small players to provide sanctuary areas in every major city where economic activities can go on without interruption in electricity supply.
2: Government needs to go back to the model that enabled consumers to get meters and pay over a period of time. Development agencies can be approached to help with funding if Government can not do it alone. The non-availability of meters is disproportionately hurting the poor who are forced to pay outrageous estimated bills.
3. Government needs to be as aggressive as possible in driving renewable energy development so as to bring down cost of materials. I propose that every youth corper whose training is relevant to the renewable energy field should be drafted into a “corps of engineers” for the development and propagation of renewable energy, particularly solar energy which can easily be deployed in small units.
4. Those who build family homes worth fifty million naira and above should be required by law to get their electricity from solar and free the grid of extra burden.
5. Government must find a way to plug the revenue leakages in the system. Some people claim that there is a lot of sleazy deals going on in the sector. Funds that could be used to make new investments  are reportedly being fretted away by some operators. For instance, an Abuja radio talk show host known for his war on injustice and corruption is currently locking horns  with a government agency involved in the power sector. The case may soon head to the courts as the talk show host stands by his story.

If Government gives up on the power sector, we may as well sell the country, share the proceeds and disappear from the scene. We should not allow such a beautiful land to go to waste.

Featured image credit: Nigeriaelectricityhub.com

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Publisher and Editor-in-Chief, Newspackng.
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