Electricity Generation.
The following unfortunate facts are what we have in Nigeria currently:
  • According to a Energy Commission of Nigeria report in 2008, households spent about 796 billion Naira on self-generation while the industrial sector spent about 1.2 Trillion Naira on same.
    • Estimated 40% of population has no electricity access.
    Manufacturing Association of Nigeria in 2005 estimated 820 manufacturing companies had closed or moved to other countries because of poor energy supply.
    • Studies have demonstrated that rural dwellers who are responsible for the agriculture sector are abandoning the land for the cities partly because of the lack of economic opportunities and quality of life that electricity generates.
    • Nigeria currently generates 3,500MW of electricity, less than half of the nation’s installed capacity because of poor maintenance of the generating facilities and transmission waste.
The so called “road map” is aiming at 8,000-10,000MW when the Energy Commission of Nigeria in 2006 rightly projected a demand of 119,000MW by the year 2030. Just 20 years away! The “road map” and many Nigerian analysts wrongly compare electricity generation to the wireless communication industry. Nigerian wireless phone providers did not and will not have to contend with tens of thousands of grid wires that will criss-cross the country’s rugged terrain to actualize the vision of the road map. Power generation involves huge investments that does not yield quick returns, a notion that Nigerian investors are not used to.
The promise of 24/7 electricity for Nigerians by December 2012 is not only technically unrealistic but a simple deceit. The NHIS has not had any noticeable impart on our health sector because we did not address the poor state of our healthcare infrastructures, providers and consumers concerns before it’s enactment. What use is a health insurance without real hospitals. The “road plan” is all about a super national grid, no substance on generation or renewable energy sources and partial privatization.

ARP’s national electrification recommendations critically look at the 3 main areas of the sector (Power generation, transmission and distribution) while paying particular attention to rural projects, a 3+1 insight. We shall briefly discuss these aspects sparing technical details:
Power Generation. Currently we have between 6000MW and 7000MW installed capacity of which about 33% is hydro (dams) and the remaining 67% from thermal sources (burning things like coal or natural gas). As indicated above, less than half of this installed capacity is actually delivered to the consumers. So, we not only have to generate far more but also a effective grid system to deliver it.

How do we generate cheap, abundant and reliable power without the potent environmentally dangerous waste of “burning things”? Renewable. Let’s focus on the three biggest renewable technologies available; Hydro, Wind and Solar.

The main reason why we should not and can not build more coal plants is because we largely depend on nature’s services. Most Nigerian families live on the land and will suffer the consequences of pollution and impart of global warming. Imagine how many coal plants will have to generate the projected 119,000MW by the year 2030.

Hydro Power. The 33% of the nations energy generation is from Hydro power and almost exclusively from our aging 3 Large Hydro Power plants represented above. Hydro power generation is not only clean but cheap and we readily understand the technology. It also benefits local agriculture. About 3 decades ago, Nigerian Government began a nationwide survey of rivers with hydraulic studies to determine their feasibility and suitability for hydro power generation. This project was abandoned after a survey of about 5 northern states.

It is estimated that the country can potentially generate 20,000MW of electricity from a mix of Large, Medium and Small Hydropower installations. The icing on the cake is the projection that 7 jobs will be created per MW of electricity we produce.

As indicated above, it will be hard to entice the private sector into such endeavor that will take a lot of resources and time. The heavy lifting will have to be done by the government at various levels.

We are proposing a resumption of the hydraulic studies of all our rivers and a build-a-dam revolution that engages the federal, state and the local governments. The latter 2 can qualify for federal government Power Grants for functional projects. Private sectors willing to help in this heavy lifting will get subsidies and exclusive markets with a pricing system worked out with the Energy Commission.

Solar Energy. Pricing is increasingly competitive and the technology is simple. It is becoming a common sight in Nigeria as in solar-powered street lights, solar water pumps and even residences. The country has favorable insolation and the technology is now part of many institutions curriculum. The calculation shows that covering 1% of the nation’s land area may generate 1850x103GWh of solar electricity per year, more than 100 times our present consumption.

Rural populations may be far from the electricity grid and widely dispersed so that it might be uneconomic, even in wealthy countries, to provide electricity at a reasonable cost. Solar technology and Small Hydropower become reasonable alternatives.
Wind Energy. A meterology data from Enugu, Jos, Ikeja, Abuja, Warri, Sokoto and Calabar between 2002-2003 reported the annual wind mean speed at a height of 10 meters above the ground a range between 2.3-3.4m/s along the coast and 3.0-3.9m/s for highland areas. A few installations are currently used in villages in the north. So, we already have the technology and some degree of know-how. This can be rapidly replicated in many remote faming communities in the country.

Power Transmission. Most attention is paid to this component of the electrification in the “road map” but as we pointed out earlier, you can not transmit or distribute what you do not generate or produce. The plan in it’s current form intends to privatize the management of the national grid while the government retains ownership. For strategic and national security reasons this is commonsensical but this is where the potential failure of the plan lies.

In a country with complex political structures and lack of policies continuity with corruption to boot, managing a multibillion dollar infrastructure owned by the government scares serious investors. The opportunity to make money in such an environment is attractive but that will be the only goal since investors will always be at the whim of the corrupt leaders and inconsistent policies. This kind of situation yields poor services and the consumers suffer. This is exactly why investors will demand cast-iron guarantees on the regulatory framework and specifics on the role of the government.

Again and again the Nigerian leaders have demonstrated no political will and lack of basic knowledge in tackling complex issues that directly affect the nation’s economy. The Bureau of Public Enterprise in 2008 admitted that only 10% out of 400 privatized firms in Nigeria were properly functioning. This doesn’t sound so great to any investor especially a venture that involves huge investments with long term returns.

The “road map” will covert our current 33KV overhead lines to a 700KV Super grid at the cost of $3.5 billion over the next 4 years. This may be a technical dream considering the extent of our current 51,797Km lines, grossly inadequate, through rugged terrains. Also the projected 14,019MW power generation by 2013 falls far short of a demand that’s projected to be about 50,000MW.

Distribution. This looks at direct contact with consumers; homes and businesses and how services payments or resolution of customers defaults are handled. One of the critical failures of NEPA and it’s offspring lies in this area. Huge customers debt and difficulties with bills collection prompted the introduction of digital pre-paid meter systems. This initiative was enthusiastically welcome by Nigerians as it frees customers from the burden of monthly estimated bills

This great idea does not address the poor revenue generation for the power company because it depends on electricity generation to start with. Remember you do not utilize your credit if there are blackouts so, it still all comes down to increased generating capacity as we indicated earlier. Also, our archaic grid and transmission system cause surges that burn the prepaid meters’ protective circuitry.

Electricity impart on the economy does not happen simply by “providing 24/7 power”. It has to be widely accessible and more importantly cheap.

Rural populations, our food producers, may be far from the electricity grid and widely dispersed so that it might be uneconomic to provide electricity at a reasonable cost. Modular technologies will have to be deployed in these places to improve quality of lives and create opportunities that will discourage urban migration.

Proper planning and execution in the areas discussed above will have to be coupled with a national conservation culture on the part of the consumers. Government's role may include enacting policies that prevent waste such as taxing incandescent bulbs and high tariffs on electrical equipments that does not meet a set national energy saving standards.

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