24th June, 2016
Speaking at two major events – the Quarterly Business Luncheon of the Institute of Directors (IOD) and the 13th Distinguished Electrical and Electronics Engineers Annual Lecture, Fashola, who was Guest Speaker at the IOD Business Luncheon, underscored his optimism that the current challenges facing the power sector would be over soon.
He assured that the Muhammadu Buhari administration was committed to ensuring a sustainable power supply in the country.
The minister, who was also Guest of Honour at the Distinguished Electrical and Electronic Engineers Annual Lecture of the Nigerian Institution of Electrical and Electronic Engineers (NIEEE), told the industrialists, entrepreneurs, directors and other employers of Labour in the Organised Private Sector not to panic by downsizing, shutting down or laying off their staff, saying that the nation would overcome the challenges of unsteady power supply just as it had overcome other critical national challenges.
Establishing the context within which to analyse the current situation in the power sector, Fashola traced the evolution of the country’s electricity industry to the 1950s when the nation’s electricity was managed by the Electricity Corporation of Nigeria (ECN) which later gave way to the National Electric Power Authority (NEPA) which finally handed over to the Power Holding Company of Nigeria (PHCN).
In all those transitions, the generation, transmission and distribution of power was in the hands of the government which also issued meters, he stated.
Fashola said he inherited a privatised power sector where majority shares of the sector was sold to private companies. According to him, the majority share was sold in 2013, 63 years after, when government unbundled the PHCN and sold the generation, and distribution processes to private companies.
He added that government only retained the transmission aspect of power which it manages through the Transmission Company of Nigeria (TCN).
Government, the Minister said, also created regulatory agencies like the Nigerian Bulk Electricity Trader (NBET), the Nigerian Electricity Management and Safety Agency (NEMSA) and the Nigerian Electricity Liability Management Company (NELMCO), adding that by unbundling the PHCN into 18 companies, government stopped producing and distributing power as well as issuing meters.
“Therefore, the power sector I inherited is one that the role of government is reduced to policy and regulation,” adding that the functions of generation and distribution were now carried out by the Generation Companies (GenCos) and the Distribution Companies (DisCos) which also have the function of issuing meters.
Noting that the power sector would have been in transition for three years in November this year out of which the present administration has spent one year and he would have spent seven months as minister, Fashola asked, “The context, therefore, is, between 1950 and 2013 what did we achieve in power?”
He pointed out that in all that time, only 4,000MW was generated while not all consumers were metered out of the six million known consumers.
“What is reasonable to expect within three years of privatization and one year of a new government in respect of a problem that could not be solved in 63 years?”, he asked, adding, “It is in this context that we can discuss my role as policy maker, regulatory supervisor and enabler for the private sector-led electricity market”.
Noting that the real problem in the sector was lack of sufficient electricity, Fashola, who recalled that the highest generation capacity, achieved only in February this year, was 5074MW for a country of no less than 150 million people as against Chad and Liberia with 84MW and 40MW electricity demands respectively, said the solution to insufficient power was to get more power.
“This is the basis for leg one of our roadmap- Incremental Power”.
Explaining further on the plan to produce sufficient power, Fashola listed the various power projects being undertaken across the country, some of which have either been completed and working or are in advanced stages of completion, to include repair of gas turbines, strengthening transmission to evacuate power and the National Independent Power Project (NIPP), Gbarain which, according to him, has now been completed and is being tested.
Other power sources targeted to increase power supply, according to him, also include expanding Qua Iboe, completing Kaduna Power Plant with generation capacity of 215MW, Kasimbilla with 40MW, Dadin Kowa with 39MW, Azura with 300MW, Zungeru 700MW and Gurara 30MW, adding that other sources besides gas powered plants include Zuma Coal, Mambilla Hydro with 1,200MW and Solar which, according to him, is targeted for rural electrification and universities, small hydro-dams as well as some uncompleted constituency projects and embedded generation such as Parias Power.
To achieve steady power, Fashola, recommended a full audit of consumers in the country, which, according to him, could best be done through a comprehensive national census exercise.
”It would be impossible to provide steady power supply without a data on the number of people requiring the utility, the minister stated, adding that such an audit would help to bring all consumers into the metering net so as to make them pay for what they consume.
This, he added, would boost the finances of the power generating and distribution companies to deliver more power and for maintenance of power facilities.
The minister said the prospect of achieving uninterrupted power lay in the maintenance of sustained growth in the sector to match population increase, energy conservation in homes and offices, energy preservation and conservation of water and loss reduction.