Economy
Experts predict shift from grid to solar power
By ADEBAYO OBAJEMU
Experts in the Nigerian power sector have again raised concern over worsening electricity challenge, saying the intermittent breakdown of national grid is a big disincentive to the economy.
Professor Folarin Adeyemo, an electrical engineering scholar told Business Hallmark that “Even with much expectations from the recently enacted Petroleum Industry Act and efforts on the side of the federal government, including the Central Bank to reposition the economy, rein in inflation and foreign exchange crisis, the economy will still be in doldrums if the electricity is not fixed.
“Honestly, many businesses and households are shifting to solar to power their production lines and households”, he said.
He said Nigerians are under pressure to completely abandon the national grid to generate electricity for themselves through adoption of available energy-mix solutions.
He stated that unless urgent steps are taken to address electricity distribution crisis, the economic growth and development of the nation will be stalled. He is not alone in this view, as this was the submission of panelists at specialist hub session of the just concluded Energy Sustainability Conference organised by the Energy Institute in Lagos.
Electricity stakeholders last week gathered to jaw-jaw on the topic: Building Nigeria’s Energy Ecosystem, at the meeting, it was disclosed that the Nigerian government, between 1999 and 2010, reportedly spent over N4.7 trillion on power.
According to findings, between 2011 and 2019, Presidents Goodluck Jonathan and Muhammadu Buhari between them, invested another N1.164 trillion, through capital releases. It is worrisome that in spite of this, the country has barely struggled to share around 4000 MW out of 12,500 installed generation capacity of electricity to the citizens.
BusinessHallmark gathered that President Buhari, between 2015 and 2020 reportedly spent over N240 billion, on five power plants, including the Odukpani (NIPP), Geregu I, Afam IV&V, Geregu II (NIPP), and Rivers IPP and others, for electricity they neither generated nor put into the grid for the use of consumers.
The federal government in the 2021 budget alone, earmarked the sum of N152.416 billion to these power generation companies through Nigerian Bulk Electricity Trading, NBET.
Based on the assumption that about 43 percent out of over 200 million of Nigerians have no access to electricity, the panelists noted that only 3000MW to 4000MW out of 12,500 MW installed national grid generation gets to the estimated 60 percent of the population.
They expressed worries that despite trillions of Naira spent by the government from 2019 till date, the situation has not improved. They however charged the government to wake up to its responsibility of eradicating energy poverty facing the country.
They warned that the situation that befell the country’s Water Corporation in the past where Nigerians abandoned it to dig boreholes in their households to meet their water need, may likely happen to the Nigerian electricity supply industry, as Nigerians are under pressure to completely abandon the national grid to generate electricity for themselves through adoption of available energy-mix solutions.
Habeeb Alebiosu, CEO/ Co-founder, Viathan Engineering Limited, operator of Nigeria’s largest integrated distribution energy utility, who moderated the panel session, revealed that the operators in the energy ecosystem in Nigeria have realised the need to synergise to build ring that combines renewable and non-renewable energy generation for sustained energy availability, to the deal with the energy poverty in the country.
He noted that about 60 percent of Nigerians with access to power only enjoys average of 4hours per day electricity with 144 kwh per capita annually, adding that the situation is worse when compared with Ghanaians who consume 621.51 kWh per capita annually, for estimated 32millions people.
He said, “Nigerians are likely to start adopting sustainable and available energy sources at whatever price to provide power to run their homes and establishments.
“There is need for interface between the Transmission Company of Nigeria and the electricity distribution companies (DisCos) to fix distribution assets that have affected power distribution across the country.
“It is demeaning to realise that out of 12,500MW of electricity produced by the Generation companies, about more than 7000MW is wasted,” Habeeb noted.
As part of solution to addressing the energy crisis, Habeeb revealed that the power sector must be cost reflective, adding that both public and private sector must agree to some compromises in the area of policy to fix power infrastructure especially at the distribution end.
He however noted that stakeholders including government must ensure that energy generation is diversified and decentralised to increase supply. The strategy according to him, should be to increase renewable energy supply to at least 23 percent in 2025 and 36% in 2030.
Anita Omoile, CEO, DeepBlue Energy Service Limited, a co-panelist, said as a result of the trust deficit between the Nigerians and government, the citizens are desperately looking for available means of generating electricity themselves.
She observed that Nigerian presently self-generation nearly 14Giga Watts of power for homes and industries, adding that market forces will soon drive consumers and investors in the direction of off-grid renewable energy.
She said, “Major issues evolve around transparency amongst the electricity market suppliers. Billing issues have been a major challenge as Nigerians are forced to pay for what they don’t consume.
She said that it is cost-effective for Nigerians to consider renewable energy options, in view of the high cost of diesel, petrol and the unreliability of utility power.
According to her, fluctuations in electricity supply by the utility companies have paved the way for solar power, particularly for households, companies and small industries.
Mr. Kelechi Eke, Asset Manager, Egbin Power Plc, said the Nigerian energy capacity is high but funding capacity is very low. He, however, suggested that for the country to end its energy poverty it has to deploy varieties of energy mixes to end its energy poverty.
Kelechi stated that there is need to upscale local capacity to harness potentials in the energy industry, adding that institutions and government needs to evolve strategies to deliver capacity needed in the electricity industry.
Yesufu Alonge, Business Development Director, Gobeleq Power Solution Nigeria Ltd, said failure of the government to fix the national grid has necessitated the need for Nigerians to adopt available opportunities in the renewable energy space to end energy poverty.
He said, “Nigerian government does not have capacity to solve the infrastructural issues facing the power sector. This is evident in the trillions of Naira that have been sunk in the power sector since 2013.
“We need to decentralise grid generation, embrace embedded generation and franchising to provide sustainable electricity to Nigerians. We must realise that electricity is not cheap, so tariff must be cost-reflective.
“If Government is to be taken serious, all the various players in the industry must be engaged and provided with funds and better environment to fix the power infrastructure right. Until this is done, Nigerians will continue to doubt the capacity of national grid to provide power in their homes,” the Gobeleq Power Director said.
The power stakeholders however concluded that all the players in the power sector have obligations to diversify generation in order to the country’s energy deficit.
Indications point to a lack of political will on the part of the government to tackle the electricity crisis. The clearest pointer to this is the federal government’s budget for the purchase of generators as captured in 2022 budget.
According to the budget document, the Federal Ministry of Power has earmarked the sum of N301bn as total expenditure for the year 2022.
Last week, media headlines revealed government’s admission that in 2022 Ministries, Departments and Agencies of the Federal Government will spend an estimated N104bn on purchasing generators, fuelling and servicing them.
Interestingly, the said amount which is about 40% of the total money voted for capital expenditure by the ministry of power to provide electricity for the country is for the enjoyment of the privileged Nigerians who are civil servant.
Breakdown of the alternative power provision show the Finance Ministry alone desires N82bn for generators. A cursory review of the budget shows that the ministry headed by Zainab Ahmed, takes the lion’s share of 80 per cent for generators as the ministry set aside N82.03bn.
The item under the heading, ‘Purchase of Fixed Assets- General’ reads, “Purchase of power generating set N82bn.”