FAILING GRID AMID HIGHER TARIFFS
A shortage of power is a major threat to the economy
Despite recent astronomical hikes in electricity tariff, authorities in the power sector seem incapable of putting an end to the frequent collapses of the national grid. Within a period of 48 hours last week, the grid collapsed twice, plunging the entire country into darkness. That marked the 11th time since January that power generation in Nigeria would drop to zero! While the Transmission Company of Nigeria (TCN) blamed the latest collapses on some ongoing repair works in the power sector, it is obvious that there are serious systemic issues across the power value chain. Addressing these challenges would require more than a cosmetic approach.
Today, electricity customers in the country classified under ‘Band-A’ pay 209.5 per kWh, following the federal government removal of subsidies for that category. Although that 300% increase in the electricity tariff was supposed to guarantee a minimum of 20 hours of power supply daily, incessant collapse of the national grid has rendered that impossible. The situation is worse for other customers who have also had to pay far more. For almost three weeks last month, 17 states in the North were shut out of electricity supply with officials giving different explanations for the problem. And just last week, Bayelsa State Governor, Douye Diri, lamented the prevailing darkness in the state for over three months.
Before now, the common excuse for grid collapse was always that the transmission lines could not wheel the power so generated by the generating companies (GENCOS). At some point, frequent grid collapses were attributed to vandalism of some transmission infrastructure. But when the national grid collapsed for the eighth time last month, the TCN and the Nigerian Electricity Regulatory Commission (NERC) blamed the incident on a transformer that exploded at the 330kV Jebba Transmission substation. In addition, according to TCN spokesperson, Ndidi Mbah, there were also significant repair works on several critical transmission lines and substations. “Efforts are being made to close the gaps highlighted in the report and to enhance the overall stability and resilience of the grid,” said Mbah. “These efforts include both technical upgrades and strategic interventions.”
It is unfortunate that a decade after the privatisation of the power sector, majority of Nigerians have come to the inescapable conclusion that the process through which countries like India, Singapore and a host of other contemporary emerging economies successfully used to reset their electric power challenge is proving too difficult to be applied effectively on our shores. Instead of generating, transmitting, and distributing enough megawatts of electricity to homes and industries across the country, what we get almost daily are excuses from the authorities.
In a report published last year, the World Bank rated Nigeria as the poorest country in the world on power supply to citizens with 85 million people not connected to the grid, and a loss of $26 billion annually. With everyone supplying their own electricity, the country has indeed been one of the toughest places in the world to do business. Many small and medium scale businesses have been crippled due to the prohibitive cost of generating their own power. Even the big business ventures, particularly the manufacturing ones, feel the biting effect of energy poverty with consequences stretching to every part of the economy. Lack of electricity has also limited access to healthcare, education, and other opportunities for most Nigerians.
Compared to competing nations in Africa, Nigeria is in a dismal situation. South Africa with one-third of Nigeria’s population produces 44,000 Megawatts of electricity and recently celebrated seven months of uninterrupted power supply. Unfortunately, despite the billions of dollars spent since 1999 to increase the nation’s power supply, not much has been achieved. As it is, our frequent grid collapses can mostly be traced to an overload of demand in relation to a paltry power generation capacity. To salvage the power sector from total collapse, a more robust power generation strategy with a diversity of sources and wider international investment spread are necessary.
