Barth Nnaji Suggests Immediate Steps to Stabilize Power Sector

Against the background of Nigeria’s deteriorating electric power crisis, a leading Nigerian energy expert, Professor Bart Nnaji, has outlined a number of measures he says the country has to take immediately to arrest the situation.

Delivering the 30th, 31st and 32nd graduation lecture of the Abia State University at Uturu today, Professor Nnaji, a former Minister of Power, outlined the steps as the restoration of the power purchase agreements (PPAs) between electricity firms and the Federal Government which the President Muhammadu Buhari administration suspended, the payment of the N6.8trillion owed the power generation firms and the over N200 billion owed distribution companies, and allowing DisCos to charge cost-reflective tariffs.

Others are building a national super grid of 765KV and decentralizing its operations so that a fault in one networked plant, for instance, would not cause a national blackout, and the development of Nigeria’s 210 trillion cubic foot of natural gas since 75% of the nation’s electricity is thermal.

Professor Nnaji, also a former Minister of Science and Technology who now leads the Geometric Power that drives the Aba Integrated Power Project (Aba IPP), also advocated that DisCos be encouraged to have embedded generation firms, greater official attention to DisCos which he said have been neglected more than other segments of the electricity value chain, and a review of the coverage areas by each distribution firm to make them more agile.

Drawing examples from India, China, Brazil, Egypt, and the United States, Nnaji noted that practically “each industrializing nation adds to the stock of its quantum of electricity every year”, contrasting it with Nigeria that “has not built a new power plant in the last 12 years except the 451MW Azura-Edo Power Plant in Edo State and the 188MW Geometric Power Plant in Aba, Abia State”.

The former minister, who had a storied career in the United States as a world-class scientist and research engineer, argued that people would not invest in new power plants without a financial instrument like the World Bank-backed Partial risk guarantee (PRG) to provide investors comfort.

“This is because it is exceedingly expensive to invest in power generation”, he told the university community that interrupted his speech intermittently with applause.

“It costs about $1.3m to construct one megawatt gas-fired plant, which is the cheapest in the country, as solar, wind, and hydroelectric technologies cost more”.

He added that investors would like to know how they could recoup their heavy and long-term investments, and the PGR is about the only realistic instrument to provide comfort to them.

He challenged the notion that investors would like to sign such PRGs with state governments following the implementation of the 2023 Electricity Act that permits subnational entities to regulate power generation, transmission, and distribution in their domains.

The state governments have limited financial capabilities, he explained.

Prof Nnaji pointed out that even if the federal authorities reversed the suspension of the PPAs today and work commenced immediately on the construction of a new plant, it would take at least three years to complete it, meaning that Nigeria would be one of the few countries in the world that would not expand its quantum of electricity in over 15 years.

Commending the Federal Government for setting up a 19-man committee headed by the President Bola Tinubu’s Chief of Staff to, among other things, accelerate the recovery of some stranded 1,600MW within two years, the Geometric Power chairman remarked that Nigeria needs 100,000MW to become a higher-medium economy by 2040, referring to the 30,000MW suggested by the Nigeria Electricity Supply Industry (NESI) by 2030 as unrealistic.

He said an electricity-hungry nation like the United States would do everything possible to increase its electricity by all means, including reembracing coal-fired plants in the face of power demand unleashed by generative AI data centres, comparing it to the return of coal plants by European countries in the wake of the energy crisis occasioned by the Russian invasion of Ukraine in 2022 that forced the European Union to impose sanctions on Moscow.

Nnaji lauded the Federal Government for returning to the 765KV Super Grid he convinced the Goodluck Jonathan administration to approve in 2012 but was abandoned after he resigned the same year over the manner of the privatization of Power Holding Company of Nigeria (PHCN) assets.

He advocated its regionalization in technical terms rather than in the geopolitical sense, so that “a fault in one remote part of Nigeria would not lead to a nationwide outage, as is the case currently”.

The energy expert said that though his firm does not benefit from Federal Government’s subsidy payments to power firms, he “strongly supports the payment so that the power sector won’t collapse”.

He referred to the DisCos in Ibadan, Benin, and Yola as examples of power distributors covering unwieldy geographical areas, calling for their review.

He said, in contrast, Aba Power covers only nine of the 17 local government areas in Abia State which he said enabled it the utility to operate in an agile manner.

Among the distinguished guests at the lecture who commended Professor Nnaji for the lecture which they described as a tour de force are the Chairman of the Abia State University Governing Council, the Hon Agwu A. Agwu, the ABSU Vice Chancellor, Professor Ndukwe J. OKeudo, and the Special Adviser to Abia State governor on Tertiary Education, Dr Emeka Enyeazu.