- Nigerian economic recovery and growth plan (ERGP) and the Nigerian Power sector recovery plan (PSRP) to the rescue.
- No longer time for finger pointing as “All have sinned and fallen short of the glory of God”.
- Eligible customer declaration by the federal government of Nigeria
- Pipeline of renewable projects in Nigeria growing at an astronomical rate.
- Traditional energy sources that are comparative advantage in Nigeria should be fully exploited.
The problems bedevilling the Nigerian power sector and the impact on the Nigeria economy have been well documented. The required solutions have been proffered in so many media including conferences like the FEN. What is required now is the political will and creation of enabling environment by Federal Government of Nigeria (FGN) to attract the required investments for projects across all the value chains in the power sector.
The Nigerian economic recovery plan (ERGP)1 was launched in 2017 and hinges on the successful implementation of the power sector recover plan (PSRP). While investments in renewables (PV solar, wind, biomass and hydro) have increased rapidly, the traditional energy sources especially natural gas and coal are still comparative advantageous to Nigeria and would have to be exploited fully within the time line that they remain so. There were so many topics discussed at the FEN with the eligible customer declaration by the FGN one of the most contentious issues.
Nigerian economic recovery and growth plan (ERGP) and the Nigerian Power sector recovery plan (PSRP) to the rescue
What better place to start from than the key note address by Patrick O. Okigbo III, Principal partner at Nextir Limited? In summary, the Nigeria economy was recently in decline and the government in February 2017 rolled out the economic recovery and growth plan (ERGP) which largely depends on improving the power sector with target of 10 GW of operational capacity by the year 2020. How is the power sector recover plan (PSRP), designed to come to the rescue of the power sector different from previous plans? The specific actions the key stakeholders have committed to and the clarity of responsible parties is where the difference lies. In the chairman’s words, “what is required now is action, speedy action, because the PRSP needs to succeed for the ERGP to succeed”.
No longer time for finger pointing as “All have sinned and fallen short of the glory of God”
The Nigerian national assembly was well represented with both ranking senate and house committee members on power present. The quote of the conference was from the chairman of the senate committee on power – Senator Enyinnaya Abaribe, “All have sinned and fallen short of the glory of God”. This was during the emotional stake holder talk on resolving the legacy on-going debts in the power sector. The CEO of the association of Nigerian electricity distributors – Mr. Azu Obiaya was on the hottest seat amongst other things made a case for increased tariffs with need for all stake holders in the power sector to manage their contractual performance responsibilities and risks. He admitted that increased electricity tariff is not the silver bullet to solve all the Distribution Companies (DisCos) issues but will go a long way to increase investments in the sector. One thing through is that there is no love lost between the public and other stakeholders on one hand and the DisCos on the other.
“All have sinned and fallen short of the glory of God”
Eligible customer declaration by the federal government of Nigeria (FGN)
In order to address some of the liquidity/revenue shortfall in the power sector in the Nigerian electric supply industry, the FGN invoked the eligible customer (EC) declaration2 derived from the Electric Power Sector Reform Act (EPSRA) 2005. The declaration allows certain customers to source electricity directly from Generation Companies (GenCos) and other licensees aside from just the DisCos. Most participants aside the DisCos at the FEN believe that this is a step in the right direct and should restore customer confidence as wells as remove collection monopoly enjoyed by the DisCos. The big elephant in the room is how this is going to be implemented by the regulator (NERC) after the policy directive by the FGN.
Pipeline of renewable projects in Nigeria growing at an astronomical rate.
Nigeria’s 2030 electricity agenda as formulated under the United Nation’s Sustainable Energy for All (SE4ALL) initiative was adopted in July, 2016 with a “Vision 30:30:30”3. This aims at achieving 30 GW of electricity by the year 2030 with renewable energy contributing 30 per cent of the energy mix. Participants at the FEN have reported an astronomical increase in renewable projects pipeline in Nigeria. Due to the ease of quick access to power via mini-grid connections, the mini-grid regulation was issued by the FGN in 2017 for registration and licencing of energy consumers requiring less than 1 MWp. In addition, there is also a visible entrant of solar home systems providers especially for rural and peri-urban areas which have been quite popular in east Africa.
Discuss on other alternative energy sources centred on the following:-
- Lot of buzz around hydro power as it is one of the major base load electricity generations.
- The jury is still out on the ability of solar plus storage providing base load.
- Rationale behind the offer by Russia to build nuclear plants in Nigeria.
Kindly watch out as these are candidates for discussions in future RiA articles.
Traditional energy sources that are comparative advantage in Nigeria should be fully exploited
The “vision 30:30:30” envisages natural gas and coal contributing 62% of the energy mix with both very much abundant in the southern part of Nigeria. Though not considered clean energy, general consensus is that they need to be exploited fully within the available time frame in which they provide comparative advantage. For gas, this can be in form of pipeline natural gas or compressed natural gas transported in trucks and stored in tanks at location. The major challenge is that it is mostly located in the Niger Delta region of Nigeria where there has been historic disruption of oil and gas activities resulting in of lack of steady gas supply. Coal is abundant in the relatively peaceful area around Enugu in the eastern part of Nigeria.
The FEN highlighted the fact that though there are numerous challenges in the Nigerian power sector even after the privatization and breakup of the vertically integrated energy utility PHCN in 2013. The issues have not disappeared but it is time for investors to take advantage of the potential and inherent opportunities that currently exist in the sector.
Kudos to the organizers of the Future energy Nigeria (formerly known as WAPIC) which held in November in Lagos as the line-up of attendees, quality and diversity of discuss were all impressive. Lastly, my sincere gratitude to my African brother – Tony Tiyou who has graciously allowed me to contribute this article via RiA.
Igwe Onuma is the Founder and the Managing Director of GreyWorks Ltd, a project management and clean energy consulting firm operating in Ghana and Nigeria. Igwe is a trusted partner of Renewables in Africa and will be regularly contributing to the RiA platform.
- Federal ministry of budget and planning: http://www.nationalplanning.gov.ng/index.php/about-us/780-federal-republic-of-nigeria-economic-recovery-growth-plan-2017-2020
- Nigeria electricity hub: http://www.nigeriaelectricityhub.com/2017/06/13/eligible-customer-evaluating-the-declaration/
- Nigeria electricity hub: http://www.nigeriaelectricityhub.com/download/nigeria-sustainable-energy-for-all-se4all-energy-mix-chart-2016/