- Blame Game Rocks Power Sector Five Years After Privatisation
The nation’s power sector is still in crisis with operators trading blames, more than five years after privatisation, ’FEMI ASU writes
When the Federal Government handed over the nation’s electricity generation and distribution companies to private investors in November 2013, it was widely expected that the power sector would turn the corner in a few years.
If Dr Femi Egbesola was told then that he would still need four generators to run his hospitality business in 2019, he would have shrugged off such statement.
But that is the reality he is contending with currently as power supply from the national grid remains unreliable, hovering sometimes around pre-privatisation levels.
Power generation plunged to 2,390.20 megawatts as of 6.00 am on October 29, 2018, as the number of idle power plants rose from seven to 15. It dropped to 3,456MW on February 24 this year as 1,108MW was lost in seven days.
Egbesola is one among millions of business owners in the country who are forced to depend on generators to power their businesses.
Irked by the poor supply from the grid and the “crazy bills” from the distribution company covering his area, he decided to rely solely on diesel-powered generators.
Egbesola, whose hotel is located in a border town between Lagos and Ogun states, said the huge sum of money being spent on diesel to power the generators every day could have been used to expand the business.
“I spend about N250,000 on diesel every day. You can imagine what that would translate into if I can keep it and use it for other ventures; I would be able to employ more people and this will also help the economy,” he told our correspondent in an interview.
“I run a 500KVA generator virtually 24 hours, and you can imagine how a 500KVA generator gulps fuel. If I have a full house, I run an 800KVA generator. The days that we have very few guests, we run a 350KVA generator. I have four generators; does that not sound crazy to you?”
Egbesola, who is the national president of the Association of Small Business Owners of Nigeria, lamented that not much had been achieved after the privatisation, saying businesses had continue to spend so much on power generation over the years.
In late September 2013, just a little over a month before the handover of the Gencos and Discos to the private investors, the then Chairman, Technical Committee of the National Council on Privatisation, Mr Atedo Peterside, gave some insights into the purpose of the privatisation at a forum organised by the Bankers’ Committee in Abuja.
“The purpose of privatising the Discos and Gencos was not just to transfer ownership of the assets. The primary purpose was to bring into play new owners with ‘deep pockets’ who could finance and/or access financing for the rapid restoration of lost capacity and/or add significant new capacity to make up for decades of government neglect and mismanagement,” he said.
But the financial viability of the Nigerian electricity supply industry remains the most significant challenge threatening the sustainability of the power sector, according to the Nigerian Electricity Regulatory Commission.
It said, “The liquidity challenge is partly attributed to the non-implementation of cost-reflective tariffs, high technical and commercial losses exacerbated by energy theft, and consumers’ apathy to payments under the widely prevailing practice of estimated billing.”
Total available electricity generation in the country stood at 4,708.3 megawatts as of 6.00 am on March 20, 2019.
The Nigerian Electricity System Operator put the nation’s installed generation capacity at 12,910.40MW; available capacity at 7,652.60MW; transmission wheeling capacity at 8,100MW; and the peak generation ever attained at 5,375MW.
