Oil & Energy
Towards Effective Power Sector Reform
The power sector is one of those sectors of the Nigerian economy that has received critical attention within the past 57 years of the corporate existence of the country as an independent state.
As part of measures to attain desired impact and maximal results in the power sector, vast treaties and hypothesis have been made over the past years, while billions of tax payers money have been sunked in.
The prospect of development, remains but a flicker, a mere shallow reflection of the expected breakthrough from the huge investment invested into the sector.
However, as the country marks its 57 independence celebration, Nigerians are desirous of the full dividends of the huge investment in the power sector.
The fact been that effective power supply is what is needed in the country to drive entrepreneurial growth and enterprise development among the teeming masses and create job opportunities.
Pundits have blamed the challenges in Nigeria power sector reforms on many factors.
One of such factors identified is the use of similar approach or methodology in solving power sector problems, thereby resulting in same old inefficiencies.
Apart from apparent diversion of fund meant for the resuscitation of the ailing sector, the lack of input of real technocrats and experts in policy making and implementation, has also been pointed as been responsible for the woes in the sector.
Musing over the prospect of development in the Nigerian power sector, an expert, Engr. Isaac Adekanya said the lapses in the sector reform were traceable to some missing links in the operation of the power sector.
Adekanya, who is the Port Harcourt branch Chairman of the Nigeria Institute of Electronic, Electrical engineers, disclosed in an exclusive interview with The Tide, that the Nigerian power sector was yet to attain synergy in the three major areas that constitute the sector, such as Power Generation (Genco) power Distribution (DISCO) and Power Transmission (Transco).
According to him, not all the power generated in the country are transmitted and distributed to the end users.
“There are a lot of technical challenges in the generation, transmission and distribution of power in the country. Most of the power projects carried out in the country have no consideration for the distribution and transmission of the generated electricity to the end users. An example is the Omoku power project, which is a huge investment but had not been able to make maximal impact because of the challenges of transmission and distribution”.
Adekanya, who is also a fellow of the Nigeria Society of Engineers said similar challenges exist in the transmission of generated electricity to the National Electricity Centre at Osogbo. He said most of the power generated are wasted along the line before they get to the end users.
In his view, the concentration of generated electricity at the Osogbo Power Centre where the needs of consumers across the country are decided may not be serving the best interest of the various sections of the country.
He noted that such discretionary measures in the allocation of power may not truly represent the electricity demands of the various states of the nation.
Alternatively, Engr. Adekanya suggested that power generation, transmission and distribution should be based on comparative economic advantage, as the various parts of the nation have peculiar natural advantages in strategic location of energy sources.
“The various parts of Nigeria are disposed with vast energy sources that can be explored based on comparative advantage. In the north, there is abundance of solar energy source, in the middle belt there are rivers that can be harnessed for hydro power generation while the Niger Delta is blessed with enormous gas potentials for thermal energy.
“These energy sources can be explored fully to serve the power need of the various areas where they are located. The idea of evacuating generated power to Osogbo before distribution may not be entirely the best option for the country. Nigerians are in serious need of electricity to do their business. It is regrettable that at 57, the country still runs a generator economy”.
Adekanya, who is a proponent of diversification as the panacea for effective power sector reform, also faulted the allocation of the DISCO by the federal government.
He said the DISCOs were given out on political consideration rather than competence and liberalisation.
He noted that the conspicuous absence, or non involvement of experts with the requisite technical knowhow in the DISCO stifles development in the sub-sector, as those involved are more concerned about profit motive than effective service delivery.
He therefore advocated for full liberalisation of the DISCO for more players to be involved on a note of competition in service delivery as in the case of the telecommunication industry.
In his submission, another expert in renewable energy, Elder Elkanah Hanson said the future of Nigeria’s industrialisation depended on renewable energy which is a global phenomenon.
Elder hanson, who spoke with The Tide correspondent in Port Harcourt recently, said nations of the world are taking advantage of renewable energy to serve their electricity needs.
The elder statesman, pointed out that Nigerian electricity laws were based on colonial orientation and as such do not serve our peculiar development need.
To attain sustainable development in power sector reforms, he called for a total revocation of the obsolete electricity laws and adoption of inventions that are best suited for our polity.
Elder Hanson, who described the concentration of generated electricity at Osogbo as “economic piracy”, said the major problem with Nigeria was its behemoth federal status, that disposses the component units of the country from developing at their own pace.
He called for total restructuring of the centralised federal structure of the country and added that electricity should not be the exclusive reserve of the Federal Government.
“At 57 Nigeria has come of age and should not be toddling again. It is ridiculous that we are still battling with defects in the power sector, our value system must change. The fight against corruption must be thorough and complete. The Federal Government should declare a state of emergency in the power sector. The lumping of power ministry with works and housing is wrong. The power ministry should be made to stand on its own and an expert should be saddled with the responsibility of running the ministry”.
Meanwhile, the Federal Government has stated that it was not against states building their own power projects to support incremental power.
Minister of power, works and Housing, Babatunde Fashola disclosed this at a meeting of the National Council of Power (NACOP) held in Jos, Pleateau State recently.
The minister explained that the law allows states to embark on electricity distribution under license through the Nigeria Electricity Regulatory Commission (NERC).
Fashiola further hinted that in the Power Sector Recovery Programme (PSRC) of the Federal Government, states are vested with enormous responsibilities to ensure that, “their residents comply with safety standards on building by not building on the right of way of 332/133,33 and 11KVA lines”.
He also urged states to encourage their residents to pay for consumed energy while the metering issue and estimated billing is addressed.
Fashola, who described the meter system as cost effective, called on state governments to set up debt verification teams with audit capacity to ascertain the debt profile and develop a payment plan which can be budgeted for. This he noted will help liquidity issues and contribute to the power sector reforms.
Considering the importance of power in the economic development of any nation, the 57th Independence anniversary of Nigeria offers an avenue for a critical review of the power sector for better service delivery.
The fact remains that competence and not politics should be the criteria for participation in the power sector. This will give more room for innovation and efficiency.
Taneh Beemene
Nigeria’s losses due to crude oil theft has been said to be more significant than those of some other members of the Organisation of Petroleum Exporting Countries(OPEC).
The Chairman, Senate Ad- hoc Committee on Crude Oil Theft, Senator Ned Nwoko, made this known in an interview with newsmen in Abuja.
Nwoko noted with dismay the detrimental impact of the issue, which, he said include economic damage, environmental destruction, and its impact on host communities.
According to him, the theft was not only weakening the Naira, but also depriving the nation of vital revenue needed for infrastructure, healthcare, education and social development.
The Senator representing Delta North Senatorial District described the scale of the theft as staggering, with reports indicating losses of over 200,000 barrels per day.
Nwoko disclosed that the ad hoc committee on Crude Oil Theft, which he chairs, recently had a two-day public hearing on the rampant theft of crude oil through illegal bunkering, pipeline vandalism, and the systemic gaps in the regulation and surveillance of the nation’s petroleum resources.
According to him, the public hearing was a pivotal step in addressing one of the most pressing challenges facing the nation.
‘’Nigeria loses billions of dollars annually to crude oil theft. This is severely undermining our economy, weakening the Naira and depriving the nation of vital revenue needed for infrastructure, healthcare, education, and social development.
‘’The scale of this theft is staggering, with reports indicating losses of over 200,000 barrels per day more than some OPEC member nations produce.
‘’This criminal enterprise fuels corruption, funds illegal activities and devastates our environment through spills and pollution.
‘’The public hearing was not just another talk shop; it was a decisive platform to uncover the root causes of crude oil theft, bunkering and pipeline vandalism.
‘’It was a platform to evaluate the effectiveness of existing surveillance, monitoring, and enforcement mechanisms; Identify regulatory and legislative gaps that enable these crimes to thrive.
‘’It was also to engage stakeholders, security agencies, host communities, oil companies, regulators, and experts to proffer actionable solutions; and strengthen legal frameworks to ensure stricter penalties and more efficient prosecution of offenders”, he said.
Nwoko noted that Nigeria’s survival depended
Shell Nigeria Exploration and Production Company Ltd. (SNEPCo) has called on Nigerian companies to position themselves strategically to take full advantage of the growing opportunities in upcoming offshore and shallow water oil and gas projects.
The Managing Director, SNEPCO, Ronald Adams, made the call at the 5th Nigerian Oil and Gas Opportunity Fair (NOGOF) Conference, held in Yenagoa, Bayelsa State, last Thursday.
Adams highlighted the major projects, including Bonga Southwest Aparo, Bonga North, and the Bonga Main Life Extension, as key areas where Nigerian businesses can grow their capacity and increase their involvement.
“Shell Nigeria Exploration and Production Company Ltd. (SNEPCo) says Nigerian companies have a lot to benefit if they are prepared to take advantage of more opportunities in its offshore and shallow water oil and gas projects.
“Projects such as Bonga Southwest Aparo, Bonga North and Bonga Main Life Extension could grow Nigerian businesses and improve their expertise if they applied themselves seriously to executing higher value contracts”, Adams stated.
Adams noted that SNEPCo pioneered Nigeria’s deepwater oil exploration with the Bonga development and has since played a key role in growing local industry capacity.
He emphasized that Nigerian businesses could expand in key areas like logistics, drilling, and the construction of vital equipment such as subsea systems, mooring units, and gas processing facilities.
The SNEPCO boss explained that since production began at the Bonga field in 2005, SNEPCo has worked closely with Nigerian contractors to build systems and develop a skilled workforce capable of delivering projects safely, on time, and within budget both in Nigeria and across West Africa.
According to him, this long-term support has enabled local firms to take on key roles in managing the Bonga Floating, Production, Storage and Offloading (FPSO) vessel, which reached a major milestone by producing its one-billion barrel of oil on February 3, 2023.
The Emohua Local Government Area Administrator, Franklin Ajinwo, has pledged to improve electricity distribution in Oduoha Ogbakiri and its environs.
Ajinwo made the pledge recently while playing host in a courtesy visit to the Oduoha Ogbakiri Wezina Council of Chiefs, in his office in Rumuakunde.
He stated that arrangements are underway to enhance available power, reduce frequent outages, and promote steady electricity supply.
The move, he said, was aimed at boosting small and medium-scale businesses in the area.
“The essence of power is not just to have light at night. It’s for those who can use it to enhance their businesses”, he said.
The Administrator, who commended the peaceful nature of Ogbakiri people, urged the Chiefs to continue in promoting peace and stability, saying “meaningful development can only thrive in a peaceful environment”.
He also charged the Chiefs to protect existing infrastructure while promising to address the challenges faced by the community.
Earlier, the Oduoha Ogbakiri Wezina Council of Chiefs, led by HRH Eze Goodluck Mekwa Eleni Ekenta XV, expressed gratitude to the Administrator over his appointment and pledged their support to his administration.
The chiefs highlighted challenges facing the community to include incessant power outage, need for new transformers, and the completion of Community Secondary School, Oduoha.
The visit underscored the community’s expectations from the LGA administration.
With Ajinwo’s assurance of enhancing electricity distribution and promoting development, the people of Oduoha Ogbakiri said they look forward to a brighter future.
By: King Onunwor