•Blames perennial under-capacity production on low demand for energy by the populace
•Highlights options for states to play in a decentralised power market
Peter Uzoho
As Nigeria’s electricity supply continues to hobble around 4,500 megawatts (MW), with many Nigerians complaining about poor or lack of power supply, the Transmission Company of Nigeria (TCN) has stated that the existing grid equipment in the country have the capacity to generate and supply between 16,000 and 17,000 MW. Market Operator, TCN, Mr. Edmund Eje, disclosed this during an exclusive chat with THISDAY.
Eje said the perennial under-capacity delivery by the power operators was due to the low demand for energy by the populace.
Eje also highlighted options available for state governments to participate actively in the electricity market following the signing of the amendment made to Paragraph 14, Part II, Second Schedule to the 1999 Constitution, which empowers states to own, generate, transmit and distribute power in their areas.
He said the low demand for power by the populace made the equipment not to function at their full installed capacity, adding that currently, TCN would only be able wheel up to 8,000MW to distribution companies (Discos) as it receives.
At its peak, Nigeria’s power sector is only able to generate just about 15 per cent of the total projected national daily requirement of 28,880MW.
Despite the various financial interventions by the federal government since the privatisation exercise in 2013, only a paltry average of 4,500MW is actually generated every day.
According to the market operator, the demand for energy determines what transmission can evacuate, hence, the inability to deliver up to the 17,000mw installed grid capacity of the power equipment.
He explained, “Let me start by telling you that installed grid capacity is in the neighbourhood of 16,000 to 17,000 megawatts – if you look at all the equipment that will convey power from generation to distribution.
“But given the scenario we have in Nigeria that most of the generators are not generating to full capacity and some other intrinsic factors, we see it that the energy that is consumed is not demanded or wanted, wanted in the sense that it’s not backed up by effective money.
“Now, what it means is that the Transmission Company of Nigeria can wheel whatever is in the grid, ranging from 8,000mw downwards. But the question is, does the Nigerian populace demand 8,000mw?
“That’s the big question. So, the demand determines what transmission can evacuate because energy is not stored in the wire, it is consumed as it is even generated.
“Therefore, the demand determines what enters the wire. It is a simultaneous process that as you generate, the consumption takes place, evacuation takes place. So if the demand is low or consumption is low, you don’t expect the transmission company to evacuate more than what the demand is or the consumption is.”
Insisting that the TCN was averagely on 8,000MW capacity delivery if it was available to be evacuated through the grid, Eje said the question many Nigerians should ask was, how many people in the villages paid for electricity.
He maintained, “It is easier to say we need light, and remember that the generators that generate this light are mostly private generators. Electricity is no longer a social good that must be consumed without payment.”
Eje pointed out that Gencos were faced with the challenge of buying gas to enable them generate energy, adding that it is difficult to get gas now.
He said the gas companies insisted on Gencos paying for gas before it was released to them.
“If the generators are not paid, if the distribution companies are not also paid for the energy they distribute, how can they make light available?” he wondered.
Eje said there was enough electricity capacity in Nigeria to go round for now, saying given Nigeria’s level of industrialisation, about 70 or 75 per cent of energy generated is consumed by domestic users.
He said that told a lot about the level of industrialisation in Nigeria, where just about 25 or 30 per cent of energy produced was taken by few industries, unlike what obtains in industrialised nations.
He explained, “In industrialised nations, the opposite is the case, where 25 to 30 per cent of total generation is taken by domestic users and then, about 70 or 75 per cent taken by industries. If industries are at that level, it means there will be less unemployment, there will be job opportunities and people will also have disposable income to pay for the electricity.”
Eje, however, highlighted options available to states in the new power industry regime, where states now have powers to generate, transmit and distribute electricity in their areas as contained in the recent amendment made to Paragraph 14, Part II, Second Schedule to the 1999 Constitution, signed by President Muhammadu Buhari.
He said everybody had welcomed the new development that states should generate, transmit and distribute if that was the only way to make energy available to every nook and cranny of the country.
Eje said the federal government had taken a step in the right direction, pointing out that the power given to states to own electricity assets, generate, transmit and distribute electricity had been there.
With the existing transmission lines owned by the federation, and the generators and distributors virtually owned by private companies, Eje stated that the best the states could do was to generate energy and put into the grid.
According to him, “With a kind of investment made by the states, they would now generate and their energy would enter into the grid and it will be treated like any other generator in the grid network. So, it becomes a commercial venture for them.
“Of course, they can now say, 20 per cent of what I am generating should be consumed within my own environment, in other words, if it is going to shoulder the responsibility of paying the tariff.
“But if they see it as a business concern, all they need to do is that their energy generated should be accounted for by the market operator, at the end of the day.”
He said it would be a different ballgame if the Nigerian Bulk Electricity Trading Plc (NBET) was to be an off-taker for the states.
On the other hand, if NBET was not off-taking them, Eje explained that the states would then look for customers who would consume the energy they generated at commercial rate.
The market operator added, “If they generate and transmit, they would pay evacuation charge, like any other generator does, and it enters into the grid, and if they have an off-taker, the off-taker is the person that will pay them and resell. And if they don’t have off-taker, it means they will do marketing by themselves and then find users and follow it up from there.”
