These are indeed trying times for the owners, managers and operators of the power sector in Nigeria. Coming not too long after a very successful and highly applauded transparent privatisation process that led to the handover of the generation and distribution companies to the new owners, we are faced with a new kind of challenge; sustaining the earlier variable capacities of between 3,800 – 4,200 mw that had raised the hopes of Nigerians for improved electricity supply in view of confidence reposed in the ability of new private sector owners to do better.
However, instead of sustained capacities with improved increases in arithmetic progression, we are faced with a web of complexities weaved around diminishing capacities, more frequent outages and blackouts often ascribed to technical issues as if the new owners did not conduct adequate studies on the facilities they were to inherit as to be prepared with already mapped out strategies for tackling these challenges.
Suggestions for overcoming these challenges:
By far the greatest challenge faced by the power generation and distribution companies concerns managing the demand and supply of peak power. Increasing peak power demand in Nigeria is considered to be one of the key factors responsible for the recent demand by the privatised generation companies (Gencos) and distribution companies (Discos) for a review of current electricity prices.
Recent data tends to suggest that peak demand is growing too fast and this requires introduction of power generation models that will promote increased availability of peak power in synch with energy save technologies deployed at the electricity distribution and consumption ends. The rapid growth of peak demand relative to overall (or average) demand is a major factor influencing electricity costs in Nigeria.
This situation makes it imperative that stakeholders and government should explore modalities for reaching a consensus on the need to tackle peak demand borrowing from global models. However, there are a number of potential solutions for tackling the peak demand challenges and thus mitigate the impact on electricity prices.
As a result of rising peak demand there is need for investment in specific renewable based peak power generation technologies in order to boost peak power availability. It is important to note that there is difference between peaks which occur day in day out and peaks that occur for only a few occasions each year.
If the main issue is critical peaks e.g. 12noon – 4pm, on the usually hot days found in tropical countries, then a year round time of use tariff may be less useful than critical peak pricing/rebates and /or automation of response from appliances such as air conditioners, washing machines, dish water, electric cookers and water heaters inclusive to heavier appliances used by industries and other public facilities.
We need to be clear about the peak demand problems that need to be addressed-day in day out or a more limited number of critical peaks. This will enable us to better tailor appropriate solutions, whether it is year round time use of tariffs, critical peak pricing or direct load control. From the side of government, there is need to invest and put in place energy saving schemes needed to address peak and overall demand.
Costs in the electricity system (and hence impacts on consumers electricity bills) are driven both by overall demand (the total amount of electricity consumed) and peak demand (the maximum amount consumed at any one time).
By: Goody Duru-Oguzie
