Pathway to Improved Power Supply

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Peter Uzoho writes on efforts by the power generation companies and the distribution companies to put an end to their perennial squabble

Since the unbundling of the Nigerian power industry with the emergence of private entities as generation companies (Gencos) and Distribution companies (Discos), there has not been remarkable improvement in the supply of electricity in the country.

However, rather than taking steps to improve the power situation in the country, the power sector investors have instead been enmeshed in more squabbles than envisaged.
Across the country, there is similar song of failure in the lip of Nigerians who seldom enjoy regular and uninterrupted power supply.

The Gencos and Discos have been alleged to be incompetent and inexperienced to operate in the sector and deliver quality services to the country. They have also been described as not having the financial strength needed to invest in their infrastructure which will help to solve the infrastructural problems currently staring them in the face.

The Discos especially, have received the biggest share of the tantrum from the public as they are the closer to the electricity consumers and the last man in the electricity provision chain. Complaints about power outage, estimated and outrageous billing, transformer breakdown, group/illegal disconnection, fake metering, extortion, and staff high handedness are all thrown at them on a daily basis.

However, aside allegations of non-performance, which they (Gencos and Discos) have often defended as arising from unfavourable business conditions, the investors have also been accused of in-fighting and lack of synergy, and this has further helped to cripple the sector. Instead of collaborating with each other in order to have a common voice and front on issues, the Gencos and Discos rather work at cross purposes. This has led to serial blame game against each other. While the Gencos accuse Discos of not taking enough power as generated by them and not remitting what is due to them in returns, the Discos also allege that the Gencos are not even generating enough power as they claim.

According to the Executive Secretary of Association of Power Generation Companies (APGC), Dr. Joy Ogaji, “for the past five years, there had been bulk passing among power stakeholders within the value chain, each blaming the other for poor electricity supply in the country.

“Each player is viewed as a competitor rather than a partner in ensuring the success of the sector. There is need to put efforts and hopefully, if there is synergy across the chain, the issues will be solved. The realisation that if there is a problem with one part of the value chain, it affects the whole chain, is lacking. There is little or no synergy between the power sector and other interrelated MDAs, such as the Ministry of Finance and the Ministry of Petroleum”.

The situation has kept other players and industry watchers worried and they have been calling on the stakeholders, particularly the investors to work together to achieve a common goal.
Fortunately, the Gencos and Discos seem to have understood the need for such collaboration between them and are now beginning to sit and talk as a family to save the soul of the nation’s power sector. With the meeting of both parties which has begun, the hope of having a system that can work for the common good of the nation may have rekindled.

Although, they quite agree that the challenge of the sector is enormous, they still believe those challenges are surmountable with cooperation and synergy among them.

Hinting journalists about the meeting during an interview in Lagos, the Group Managing Director of Sahara Power Group and Chairman of Ikeja Electricity Distribution Company Plc., Mr. Kola Adesina, said the players got to understand that the main problem of the sector was lack of system and coordination in the entire value chain of the industry.

Adesina said: “The challenges are many; the first one is that you need to have a system before you can operate. So the value chain, is it coordinating? Is there any handshake in that value system? Is the handshake regular? Where do people drop the balls in this system? Those are issues that need to be resolved. Everything must work harmoniously, consistently, regularly, steadily for you to have electricity.

“The joy for me is that we had a meeting last week (fortnight ago) –the Gencos and Discos together, from an ownership perspective. Because like I have said to everybody, in the last six years, I find it very horrendous, to say the least, that the system is fighting itself.

“The value chain can only work to deliver results if they are working together. If they are not working together it will be impossible for you to deliver results that you want. It’s just like using the football analogy –the midfielder, the attacker, the defender and the goalkeeper must all work together. So if one of them is sleeping on duty, that team cannot win, that’s where we are as a nation”.

Adesina, however, faulted the move by the Transmission Company of Nigeria (TCN) to supply power directly to eligible customers, saying, that was contrary to the system’s anticipation, and was one of the issues discussed at the Gencos-Discos meeting.

“Like I said earlier, we had a meeting of investors and that’s one of the issues we discussed. The system never anticipated that a transmission company will supply power to any customer. The job of a transmission company is to give electricity to a distribution company who is empowered and licensed to give electricity to customers. So the moment a transmission company begins to give power directly to the consumer of any nature or form, that is really a problem,” he said.

He also decried the fact that, of the 1,000MW generating capacity of Egbin Power, only 600MW was being utilized, a situation he described as “a system issue”.
However, despite the existing challenges in the system, Adesina said the group would still aggressively go ahead with its plan of expanding the Egbin Power Plant, noting that “our own view as an organization is not to succumb to problems of society.”

He added: “The desire for us at Egbin is that the new capacity which we are going to build will supply electricity to the distribution company that we are going to sign power with going forward. That way, they can supply to their relevant customers.”

Adesina also disclosed that the group was venturing into the renewable energy space and had signed to work with the United Nations Development Programme (UNDP) to ensure sustainable energy for everyone in Nigeria and everyone in other nations where it has footprints.

Meanwhile, confirming the meeting between the Gencos and Discos, the Executive Director, Research and Advocacy, Association of Nigerian Electricity Distributors (ANED), an umbrella body of distribution companies, Mr. Sunday Oduntan, said the meeting and collaboration would translate to better things for the private sector and Nigerians.

According to him, “We have always said that there is need for collaboration, cooperation and alignment in the system. Yes, we are talking, we’ll be working together, we’ll be working for Nigerians. That’s a good news and the good news will continue as it will translate to better things for the private sector, that I can assure you. It’s a good development and we’ll continue to collaborate with Gencos, the TCN, so that we can now do the best for Nigeria. That’s what we are doing”.