Epileptic power supply in Nigeria: Will NIPP break the ice?

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NIGERIA is the seventh most populous country in the world, 39th top economy but unfortunately occupies the 70th spot on the global electricity production chart, according the CIA World Fact book.

Epileptic power supply, with the attendant effects on industrial production can hurt the country’s goal of being among the top 20 economies of the world in 2020, a mileage that is merely seven years away.

With a miserly 20.13 billion Kilowatt-hour (kw/h) of electricity, Nigeria ranks lower than Brazil (509.2 kw/h), South Africa (238.3 kw/h), Egypt (123.9 kw/h), Malaysia (118.2 kw/h) and Argentina (115.4 kw/h). Nigeria has a pool of hydro, thermal, solar and wind electricity sources to tap from to boost her power supply but has not managed to do this effectively over the years.

History of power generation

Under colonial rule, Nigeria started electricity generation and supply in 1896. In 1929, it set up the Nigeria Electricity Supply Company (NESCO) as an electricity utility company operating a hydroelectric power station near Jos, Plateau State. In 951, the Electricity Corporation of Nigeria (ECN) was established. The first 132KV line was built in 1962, to link Ijora power station in Lagos to Ibadan power station.

Since then, there have been increases in electricity infrastructure and changes both in the nomenclature and operations of the regulating agencies. The Niger Dams Authority (NDA) was established in 1962 with a mandate to develop the hydro-power sub-sector. It was merged with the ECN in 1972. It was followed by the coming of the National Electric Power Authority (NEPA) and the current National Electricity Regulatory Commission (NERC) and Power Holding Company of Nigeria (PHCN) as the search for stable power supply in the country continues.

Military setback

Nigeria’s power infrastructure however faced a major setback under the military regime to the extent that most of its hydro-electric dams were allowed to decay and the transmission and distribution equipment and lines became obsolete until in 1998 when the Federal Government initiated efforts to end NEPA’s monopoly of electricity generation, transmission, distribution and sales.

Coming of NIPP

The most significant measures taken by the government to re-jig the industry came in August 2005 when the National Council of State (NCS) and the National Assembly approved an initial funding of US$2.5 billion for the National Integrated Power Project (NIPP) from the “Excess Crude Oil Account.

The Niger Delta Power Holding Company Limited (NDPHC) was thereafter incorporated as a limited liability company to serve as the legal vehicle to hold the NIPP assets. The mandate of the NDPHC included construction and expansion of the country’s power infrastructure to boost electricity generation and supply across the country.

In 2008, the National Economic Council (NEC) voted US$5.375 billion from the excess crude account as Power Emergency Fund (PEF) to complete NIPP. NEC also inaugurated the NIPP Steering Council in January 2009, chaired by President Goodluck Jonathan, then the country’s vice president with six state governors and four ministers as members.

The NIPP Steering Council, which has transformed as the board of directors of NDPHC is headed by Vice President Mohammed Namadi Sambo. In February 2009, the council approved phase I budget of US$2.213 billion from the PEF of US$5.375 billion to complete the first phase of the NIPP projects. It also approved US$423.639 million to PHCN as special intervention fund.

In June 2010, the council approved US$123.110 million to augment the phase 1 budget and N1.750 billion to buy NDPHC corporate headquarters in Abuja.

With these funds, the NDPHC built several gas turbine plants, distribution and transmission equipment and lines in the country.

NDPHC Managing Director and Chief Executive Officer, Mr. James Olotu, while presenting NIPP Status Report on December 14, 2012 in Lagos, said more power stations had been completed in various parts of the country. These plants, he said, have cumulatively added 1,687.5megawatts (MW) to the national output.

The completed plants, which can each generate 112.5MW per gas turbine, are located in Olorunsogo, Sapele, Alaoji, and Omotosho among others. The report showed that as at December 7, 2012, the country’s power generation capacity had risen to 5000mw.

On distribution system enhancement, he said 43 lots of low high voltage distribution system, 295 injection sub-stations, 3,540 MVA injection sub-station capacity; 2,600 of 11KV lines and 1,700km of 33KV lines are almost completed. Work is also in progress in the transmission sub-sector where 118 projects in 43 lots are being executed. These transmission projects covering over 274 km of lines and transmission capacity of 2,370MW will soon be completed.

In the distribution segment, the NDPHC has supervised the completion of various projects in Abuja, Benin, Eko, Ibadan, Ikeja, Kaduna and Jos-Yola zones, including 125 high voltage transmission network projects for the evacuation of electricity from the new power plants and reinforcement of various segments of the national grid network to increase its capacity to wheel 10,000MW of electricity around Nigeria at 330kv and 132kv voltage levels. The projects fall under 29 lots.

The NIPP scope also covers 125 electricity distribution network projects of 11kv and 33kv voltage levels with injection sub-stations and HVDS transformers, which are grouped under 43 lots and spread across the country.

According to the NDPHC, 16 of the transmission projects in Ogun, Ondo, Delta, Abia, Kwara, Oyo states and Abuja in the Federal Capital Territory (FCT) have been completed. The projects are to evacuate power from Olorunsogo, Omotosho, Sapele and Alaoji stations.

According to Olotu, in 2013, the NIPP plans to complete all gas turbine projects with capacity for 4,264mw. The projects include the simple cycle power plant for Alaoji plants with installed capacity of 510mw and transmission projects covering 219km of 330kv lines and 809km of 132kv lines as well as the distribution projects to evacuate 3,540MVA across 2,600km and 1,700km at 11KV and 33KV lines.

The power generation projects also slated for completion within 2012 and 2013 under Lot 11 are the Calabar power station in Cross River State, Egbema power station – Imo State, Ihovbor power station – Edo State, Gbarain power station in Bayelsa State and Sapele power station in Lot 6 located in Delta State.

Others are the Omoku power station in Rivers State, Alaoji combined cycle power station located in Abia State, and Olorunsogo combined cycle power plant (Ogun State), Omotosho power station (Ondo State) and Geregu power station in Ajaokuta, Kogi State.

The NDPHC plans to also complete all Gas Sales Aggregator Agreements (GSAA) and Gas Transmission Agreements (GTA), receive and commence the implementation of transaction adviser’s recommendation once approved by the board during the year.

The massive construction of power projects by the government may have contributed to the current improvement in power supply in some parts of the country

When most of the projects are completed and are operational power generation is expected to hit 10,000 MW from the present 4517 MW, which is still a far cry from the 40,000 megawatts that industry watchers say can drive the economy on the part of sustainable growth.

The Manufacturers Association of Nigeria (MAN) admits improvement in power supply. It said from three hours average daily power supply in the cities to its members across the country between 2000 and 2010, it now ranges from six to nine hours.

A council member and former president of MAN, Alhaji Bashir Borodo, said the improvement in power supply has reduced cost of production for manufacturers.

He said the major problem with power supply in Nigeria is in the distribution chain.

“They (government) has targeted the generation of 10,000 MW by the end of 2013. If this target is met, would they efficiently distribute it to the end users?” he asked.

Also, Director-General of the Lagos Chamber of Commerce and Industry (LCCI), Mr. Muda Yusuf, said there was an improvement in power supply and linked it to improvement in gas supply to the thermal power plants.

On why the achievements of the NIPP were not being felt by most Nigerians in terms of more steady power supply, Olotu said: “Power itself is a function of three elements: The power as generated, the power as transmitted, and then there is the power as distributed.

Usually the ratio internationally is that the power as transmitted, that is the power infrastructure for transmission, should be sufficient enough to surpass the power generated. The same thing happens at the lower end. Power for distribution should be able to take more than what the transmission can give out.

This is to allow us reduce redundancies at the various levels and reduce losses while transmitting power from one location to another. The farther you travel with power, the more the quality and the efficiency of the power is reduced.”

Challenges before NIPP

The NIPP has, however, been dogged with several problems ranging from inadequate gas supply to the power stations, security and community issues, right-of-way challenges for distribution equipment and transmission lines, port clearing coordination hitches and contractor performance-related problems.

Even though the three tiers of government own the NIPP, equipment imported for the power projects are often delayed or seized at the ports by the Nigeria Customs Service (NCS) because of non-payment of import tariffs thereby stalling the execution of some power projects.

Sadly, some of the equipment at the ports were auctioned by the port authorities after demurrage charges had accrued on them. It took the intervention of an alarmed Senate to recover some of the equipment sold off under questionable circumstance.

To sustain and improve on the present achievements, the government should wave duties on equipment for power projects.

It should also address the problem of acquiring the right-of-way for the approximately 3,000km routes for the 330kv and 132kv transmission lines for the NIPP, especially in densely populated areas of Lagos, Anambra, Imo, Abia, Enugu and Akwa Ibom states.

Chairman of the Presidential Task Force on Power (PTFP), Engr Becks Dagogo-Jack’s declaration of 2013 as a “make or break year” for the power sector reform in Nigeria would only be realised if the government resolves the challenges facing the NIPP.

Vice President Namadi Sambo, who at meeting with NIPP contractors last January chastised them over what he called “the slow pace of work on some transmission projects,” should assist them to deliver and sanction the non-performing ones so that the December 2013 deadline for the completion of NIPP can be met.

But before wielding the big stick on the contractors, the government should tackle the activities of vandals, kidnap of the employees of the contractors and broker peace with the host communities.

Former Minister of Power, Prof. Barth Nnaji, drew attention to some of the challenges faced by the contractors when he said that shortly after the “NDPHC diverted the transmission line to the Ihovnbor station in Edo State at a considerable cost because of the presence of a shrine, a new shrine emerged overnight on the new route and the villagers are demanding a huge amount to relocate it.”

During the recent Good Governance tour to Cross River State by the Minister of Information, Mr. Labaran Maku, the issue of inadequate gas supply to the power plants was brought to the team’s attention.

A power project in the state said to be 93 per cent completed is allegedly being stalled by poor gas supply to the plant and back feed.  The minister was told that four other power stations in Geregu (Kogi State); Sapele in Delta State; Omotosho in Ondo State and Olorunsogo in Ogun State were affected by inadequate gas supply. The government should henceforth ensure the steady supply of gas to the plants to prevent these capital-intensive projects from rotting.

Also, operatives of para-military agencies, especially men of the National Security and Civil Defence Corps (NSCDC) should be re-assigned to protect power installations from vandals across the country.

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