The unprecedented happened last week, with the final hand over of the components of the unbundled Power Holding Company of Nigeria to new owners, and the subsequent proclamation of the demise and official interment of the company; the culmination of a reform process that kicked off more than a decade ago.
It’s good news, at least theoretically speaking. This is the farthest Nigeria has ever come in its interminable bid to put an end to the curse of darkness.
But the road ahead is still long and difficult. Upon all the noise of reform Nigeria is still generating well below 4,000 MW, and has, in the 14 years since democracy landed with its goody bags of false promises, never generated more than 4,500MW (attained in December 2012).
The new owners of the plants are inheriting deeply troubled assets (they’re currently operating at about 40 per cent of installed capacity). And hanging uncomfortably over them are recurring threats of revolt by the same PHCN workers under whose watch things fell apart (insert here a proverb about Nigerians and shamelessness).
And then there’s the issue of the obsolete national grid. “Transmission is the life-blood of this entire electricity system and it is also potentially the weakest link at present,” Atedo Peterside, Chair of the Privatisation Council’s Technical Committee, was quoted as saying, in October.
However, all things considered and all dysfunctions acknowledged, there’s no doubt a lot to get excited about in this country, considering that the size of our dysfunction is also the size of the potential for transformation. There are countless vacancies for people of vision and competence and integrity, and countless opportunities for people to legitimately make money from the bid to improve the state of public infrastructure.
About 10,000MW of grid electricity is due to come on-stream in the coming months (close to half of this will be provided by the National Integrated Power Project due to come into operation next year). The rest will come from improved supplies from the GENCOS that have now been handed over to their new managers, and should hopefully be more efficiently run from now.
Off-grid, things are looking equally promising. I’ve heard estimates of as much as between 10,000 and 15,000 MW to be expected from off-grid sources.
As always, Lagos State is somewhere in the front seat. In 2011, the government inaugurated the Lagos Island Independent Power Project, supplying 10MW to government buildings in and around the Marina, from the Lagos Island General Hospital to the High Courts to Lagos City Hall, Freedom Park, and 12km of street lights and external building lights (“public lighting”) on the Lagos Island.
Now, last month, the government unveiled the second phase, which expands the number of facilities covered by the plant (the government says the public lighting coverage has now risen to 70km).
No doubt, something very exciting is happening in Lagos State, driven by the State Electricity Board – from the IPPs to the public lighting to energy conservation efforts to the planned vocational training for young people in fields related to energy. I definitely think other states across Nigeria should be paying attention, and looking to copy the Lagos model.
However, there’s much that is depressing about this country (and no, I will not again mention how the BMW purchase scandal is slowly but surely going the way of the countless scandals that have preceded it, as predicted), but there are also a lot of inspiring efforts springing up.
When the private sector displays innovative thinking, we’re not surprised, because we expect it – it is the nature of the sector, driven by relentless competition and the quest for lower operating costs, bigger customer bases, and bigger profits, to innovate.
But when it is a state government showing traces of a thirst for innovation, then we should be pleasantly surprised. And we should pay attention. For what I consider the many failings of the Lagos government – and they are many – the impressive efforts also abound.
And I think these stories need to be shared widely in the hope that we can reset the standards of Nigerian governance away from mediocrity – governments endlessly congratulating themselves for providing boreholes and motorcycles and mosques and new secretariats and official cars and Christmas and Sallah food to citizens.
(For example, IBM is working pro-bono with the Ekiti State Government on a number of projects to foster the use of technology across the government, hoping to produce such outcomes as a paperless document system within the civil service, and improved access to government data and information by citizens – which will help support government transparency and fiscal responsibility. If citizens are aware of projects like these, then there’s the likelihood that we’ll be better able to put pressure on our governments to ensure that the projects are not abandoned along the way).
Back to the electricity matter. Much of Nigeria’s focus has been on fossil fuel energy – coal and natural gas. (President Goodluck Jonathan has said that his government intends to generate a third of Nigeria’s power from coal). But there’s certainly great potential for energy generation from renewable sources. In 2012, Germany added 10,000MW of electricity from renewable sources – 8,000MW from solar panels, and 2,000MW from wind.
If there’s anything close to a wind power revolution in Nigeria, we might need to look towards Kano State. In 2010, the state government inaugurated a 51MW wind farm, due for completion in 2011. Unfortunately, the project appeared to have run into a hitch when one of the expatriates working on it was reportedly kidnapped sometime in 2011 (I’ll try to get an update regarding this, and the current status of the project).
It appears that there’s massive potential to envelop swathes of Northern Nigeria in wind farms, providing a boost to manufacturing and agriculture (food preservation, for example), and generating the much needed jobs. While writing this article, I found, on the Internet, a 2011 study of wind energy in Northern Nigeria by researchers at the Moshood Abiola Polytechnic in Abeokuta and the Lagos State University, suggesting the viability of sites in Sokoto, Gusau, Kano, Zaria and Katsina as wind farms.
I hope the governors in those states are paying attention (someone needs to inform the Governor of Katsina State, Ibrahim Shema, that spending N360m of public funds on the construction of 34 mosques is just the sort of financial irresponsibility Nigeria doesn’t need; not when there are countless private individuals who can be cajoled by the governor to use their money to do such. He should instead put that money into an energy fund for his state).
Alongside wind farms, Nigeria, blessed as it is with appreciable levels of year round sunlight, should be taking advantage of solar energy. Months ago, I attended a retreat by the Heinrich Boll Foundation in Abuja, that shed some light on the economics of solar energy. What appears to be the overriding disadvantage of solar energy is its installation cost – it costs far more to build a natural gas fired plant than to build an equivalent capacity solar powered plant (a six-fold difference when considering a 30MW plant).
But when you then account for operating costs, over time, the solar plant turns out to be the cheaper alternative, since it has negligible running costs (if good quality technology is deployed in the first place); compared to the huge costs of providing and maintaining gas infrastructure and supplies.
The effects of improved power supply will be considerable. Renaissance Capital says that Nigeria’s economic growth rate could easily soar into double digits with improved electricity supply. With better-lit streets at night, crime rates will fall; night-life (and the accompanying ‘economy’) will flourish.
Businesses, small and large, will spend less on fuel costs and have more money to devote to the critical aspects of their business – hiring more people, buying more equipment, and generally improving productivity. Prices of many goods should drop, as the cost of doing business reduces. We will be able to start conversations around electricity-powered trams in cities across Nigeria. The silencing of generators will produce cleaner and more comfortable neighbourhoods.
What’s baffling at the moment is that it is the countries that already have plenty of power that seem most desperate to increase their supplies. For so long an energy-starved country, Nigeria has carried along as if electricity is an optional box in the list of requirements for national progress.
Let’s hope that attitude is changing. President Jonathan recently declared, regarding the power sector reforms, that “things can only get better from this point onwards.”
I desperately want to believe him. Here’s hoping that by coming this far in the reform process, we’ve broken a jinx, and eternally silenced at least one clan in the tribe of powerful demons busy keeping our lights off.
– Follow me on Twitter @toluogunlesi.