Lack of sustainable access to electricity has over the years been a brake on the economic development of most countries in Africa, where the proportion of people without electricity is higher than in any other continent.
Africa is home to 15 percent of the world’s population, but it consumes just 3 percent of the world’s energy output, and generates less than 50 percent of the 74,000 megawatts (MW) of current peak demand requirement, Ecobank Research said in a report published on January 30, 2014 The report stated that in sub-Saharan Africa, electrification rates are low with only 25 percent of the region’s population having access to power, adding that Nigeria’s generation of around 4,000MW falls far short of the almost 13,000 MW required to meet peak demand.
“Indeed, New York City, with a population of just fewer than 10 million, has a generation capacity of 13,000 MW, three times larger than Nigeria as a whole with its 160 million-strong population,” the report said.
Out of a sub-Saharan population of 600 million without access to electricity, 84 million are Nigerians. Worldwide, this represents the largest number of people without electricity, after India, which has 306 million, or 25 percent of its population, Yinka Omorogbe, professor of law at the Nigerian Institute of Advanced Legal Studies, Abuja, said in her keynote speech at the 7th Annual International Conference of the Nigerian Association for Energy Economics (NAEE), held last week in Abuja.
The optimal harnessing of Nigeria’s electrical energy has been an acute challenge over the last thirty years due to lack of foresight and investment for a growing population of about 167 million, according to the Presidential Task Force on Power (PTFP) chaired by Beks Dagogo-Jack.
“The effect of this lacuna is well known: crippling the growth of productive and commercial industries, stifling the creation of jobs so urgently needed for the substantial youthful and ever growing population, and the generally deleterious impact on the social psyche of a people literally living in darkness in the 21st century.
“For Nigeria, the lack of electricity is depleting the tremendous energy and creativity necessary for development,” the PTFP said in its foreword to the revised edition of the Power Sector Reform.
Access to electricity, a top priority?
When in December 2012, the United Nations (UN) General Assembly unanimously declared the decade 2014 2024 as the Decade of Sustainable Energy for All (SEFA), it noted that 1.3 billion people are without electricity, calling on member states to galvanise efforts to make universal access to sustainable modern energy services a priority.
“Sustainable energy for all is essential for achieving our Millennium Development Goals and for opening up new opportunities for growth and prosperity in every country of the world,” Kandeh Yumkella, director general of the United Nations Industrial Development Organisation (UNIDO) and chair of UN-Energy.
Despite being equipped with vast and diverse energy resources, more than half of the Nigerian population still have no access to electricity. The government expects 75 percent of the population to have access to electricity by 2020, according to Chinedu Nebo, minister of power.
On November 1, 2013, Nigeria’s power sector, which had operated for several decades as a state monopoly, with the federal government having the exclusive rights to own electricity generation, transmission and distribution facilities, saw the entry of private investors, with the historic hand-over of most of the successor companies carved out of the defunct Power Holding Company of Nigeria (PHCN) by the federal government to the new owners.
But Nigerians are yet to see the envisaged benefits of the privatisation because the system is still bedevilled by a weak transmission network and gas supply shortfall to power plants, which stoked the intensity of power outage shortly after new investors came in.
Nebo, speaking at the NAEE event acknowledged the challenge of electricity access in the country, saying: “This is where we are today. So many of the critical issues with regards to providing power to our people have or are being addressed, but the critical issue of access is something that brutally looks at us in the face and tells us that not much is being done.”
Wumi Iledare, 2014 president of the International Association for Energy Economics and director, Emerald Energy Institute, University of Port Harcourt, who highlighted the key anchors of energy access, said the first anchor is energy availability which requires massive investments from the private sector with a well-articulated public policy to attract investments.
“You cannot have access to what is not available. There is no way government can be solely responsible for providing access to energy. Next is the basic fact that energy must be affordable. While the industry needs liberalisation and restructuring to make energy available, it must be regulated at the end‐users market to ensure affordability. Finally, energy access must be sustainable. This requires massive investment in human capacity to manage the industry, its regulatory institutions and agencies effectively.”
Nigeria’s reliance on gas for power generation
Atedo Peterside, chairman of the Technical Committee, National Council on Privatisation (NCP), speaking at a conference on September 27, 2013 in Abuja, had said that while gas supply constraints arising from capacity shortfalls/lags could be foreseen, the impact of pipeline vandalisation was not so predictable and could induce damaging shocks to the health of the entire electricity value chain.
“We have an electricity sector that is dominated by reliance on the natural gas industry, which currently lacks structure and coherence due to the absence of a legal and regulatory framework that will provide the framework for development and implementation,” says Omorogbe.
She stated that the natural gas sector, which forms part of the petroleum industry, was itself hampered by the inertia in the area of petroleum industry reform. “The Petroleum Industry Bill has been drafted and redrafted. Not only has the constant drafting been to no avail, but also there is clearly deterioration, as can be seen from a reading of the present draft.”
“Why is the country so slow to realise that an electricity sector that is dependent on natural gas will continue to function at substandard levels until the emergence of an appropriate framework for downstream natural gas?” she queried.
She said before the country became a mono oil economy, it relied on hydropower as the primary feedstock for electricity.
“There is no way we will be a free, safe and secure country if we count only on gas for power. That is why one of the critical things we are doing in the minisinstitutry of power is to ensure that we have a robust energy mix,” Nebo told the conference last week.
Drive to diversify power generation mix
At the NAEE conference, which focused on ‘Energy Access for Economic Development: Policies, Institutional Framework and Strategic Options’, energy experts in their speeches and technical presentations spotlighted the need for African countries to accelerate the deployment renewable energy in their quest to deepen access to electricity.
One of the three objectives of UN SEFA initiative is to double the share of renewable energy in the global energy mix to improve access to reliable, affordable, economically viable, socially acceptable and environmentally sound energy services and resources for sustainable development.
“While renewable energy remains a high-priority issue for Africa, with huge potential and opportunities, renewable sources have become more uncertain in 2013 and strong action is needed to address the issue,” the World Energy Council (WEC) said in its 2014 World Energy Issues Monitor.
It has become increasingly likely that renewable energies will provide more of the world’s electricity than gas-fired power plants by 2016, as its declining cost profile positions it to compete more vigorously with fossil fuels, said a recent report by Ecobank Oil, Gas and Energy Research headed by Rolake Akinkugbe.
According to the report, ‘Fully charged: Key dynamics in Middle Africa’s Power Sector in 2014’, Ghana is leading the rest of West Africa in driving the renewable energy agenda with its 2011 Renewable Energy Act. The country plans to invest at least $1 billion in renewable energy projects in next 7 years to 2020.
In Ghana, the $400m, 155MW Nzema Solar Project, which is Africa’s largest solar photovoltaic (PV) power plant, is said to be in the final stages of financing.
Kenya is building solar power plants that could provide more than half the country’s electricity by 2016. Construction of the plants, expected to cost $1.2bn, is set to begin this year and initial design stages are almost complete. The partnership between government and private companies will see the state contributing about 50 percent of the cost.
According to Nebo, Nigeria does not have a renewable energy and energy efficiency policy. “We are working on that now as the government is determined to develop a robust energy mix. There will be gas, solar, hydro, coal, wind and biomass. All these are critical to make sure that electricity gets to where it has not gotten to. By 2020, we expect that 75 percent of Nigerians are connected to the grid.”
The power minister noted that the Zungeru Hydro Power Station which was flagged off on May 28, 2013, is expected to generate 700MW, adding that Mambilla hydro power station of 3,050MW will be flagged off in a couple of months.
In late January, the government said it was building over 200 new dams in order to achieve its target of 10,000MW of electricity at the end of this year, according to Vice President Namadi Sambo.
Akin Iwayemi, president, Nigerian Economic Society, said: “Renewable energy is the future of sustainability. And if we don’t go that way, we will be left behind. We have abundance of renewable energy in the country.”
With a huge potential of about 15 gigawatts (with less than 1.4 percent exploited thus far), large-scale hydropower is perceived as a clean renewable energy option that needs to be further developed to meet energy needs in a sustainable way, the WEC said.
“Energy efficiency and renewables are perceived as critical instruments for sustainable energy growth and have been on the agenda of the Nigerian energy sector for some years. Appropriate policy measures should be implemented, however, to strengthen the regulatory and institutional framework,” the Council added.
“Costs tend to be high for renewable energy projects in Africa due to equipment imports, higher internal transport costs, import levies. Developing local manufacturing capabilities and increasing the share of local content for renewable power generation projects can help reduce costs, which are predicted to decline over time,” the Ecobank report said.
Adeola Adenikinju, president of NAEE and director, Centre for Petroleum, Energy Economics and Law, University of Ibadan, stressed the need for a diversified electricity sources that will promote electricity availability, reliability and enhance electricity access, adding that “there are currently very limited incentives to boost commercialisation of renewable energy technology as alternative source to electricity supply.”
FEMI ASU
