• Monday, June 17, 2024
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Escaping the tyranny of national megawatt numbers

Households groan over rising energy bills

The press statement by the Minister of Power on March 3, 2022, is a brilliantly-written and innovative effort to change our national perception about the Nigerian electricity sector. Putting into our consciousness that national electricity capacity is 8,000MW is a good thing but it would have been better if we actually saw 8,000 MW in our homes.

I wish the minister had gone all the way and added total gen-set capacity that Nigerians aggregate into the mix of numbers we were given. After all, they serve an important load too – the load distributed across the country that actually votes. If he had done this, he would have got a number closer to 50,000MW. To round this out and put things in proper light, the minister should also have spoken about the totally unserved load, those who have zero supply.

No supply from the grid and no backup. This is a demographic whose number and extent the Rural Electrification Agency (which reports to him) should have at its fingertips. That way, Nigerians will truly appreciate the task that this administration confronts.

Playing with megawatt numbers has always been political in Nigeria but it is a very flammable matter that tends to burn ministers who do not handle it with care. What we have here is that the FG is using a consultant study (KPMG in this case) to score political points. It would have been better for the FG to publish the entire KPMG study, let us see what it was all about, what its recommendations were and how the FG is already implementing these recommendations.

I honestly do not begrudge the minister for trying to paint a positive picture about what this administration has actually achieved. He would be failing in his duty if he did not do so. There is another reality, however, and this lies in the fact that the portion of this 8,000MW (or the 50,000MW that is the more correct number for Nigeria’s total electricity sector) that is traded in a formal electricity market – the part that serves ordinary, voting Nigerians, is insolvent, in fact technically bankrupt and has been on life support for years, with no sign that it is coming off its FG treasury lifeline any time soon.

That market trades less than 4,500MW/100,000MWh daily for our 200m people. The rest is totally invisible to the formal grid-connected national electricity market.

Read also: Amid poor power supply, FG vows to sanction Discos

Successive FGs have been unable to ask and answer the question why Nigerians are willing to pay over 2ce the cost of grid energy for their alternative, off-grid, captive, backup electricity but are overwhelmingly unwilling to pay economic tariffs for 4GW of grid-connected power. It’s a puzzling socio-economic and political paradox that is the stuff of a PhD thesis.

It is this seemingly small sector, which the minister’s statement tried to minimize and take away from our consciousness that in fact gives him and his team sleeplessness. Not the captive, off-grid, backup generation capacity dedicated to industrial and large commercial users and the homes and housing estates of the well-heeled and upwardly mobile in Nigeria’s 37 capital cities.

No, the entire range of issues that bedevil our electricity sector and give successive ministers a big headache are focused in that “small” 4,000-MW market our minister of Power tried to dismiss from our consciousness. Surely, the minister knows it will not work because it is in that place that grossly dissatisfied Nigerians reside.

Each minister of Power takes office and quickly realizes that the market should be 40GW or more, not 4GW or even 8GW, large and he desperately wants to move the needle upwards. In order to do so, each minister has succumbed, like every one of his predecessors, going back to Chief Bola Ige in 1999, to the tyranny of megawatt numbers counted in different ways by Abuja’s bureaucrats, technocrats and consultants.

After 21 years, the FG is still at sea about how to get us to the point of trading much more than 4GW, daily, speak less of 8GW and speak even less of 40GW. The grid-connected market has stagnated and needs to be rejuvenated with innovative ideas. The recent passage by the National Assembly of a bill that enables states to create sub-national electricity markets promises to multiply capacity and open up new opportunities to make citizens’ access to electricity truly national.

Instead of playing the numbers game, the FG needs to accept that the era of a single, national electricity market is now over. There will be more players in the mix and not all of them will be regulated and/or controlled from Abuja. That would not be a bad thing for Nigeria and it does not also mean a loss for people in Abuja (many of whom oddly feel that the rise of state or sub-national markets means that their turf is being encroached upon).

This is the time for the minister of Power and his team take leadership and return to the Federal Ministry of Power’s original policy synthesis and formulation role and create a platform for stakeholders to come together to ask why we are where we are, how best we can accommodate present realities and in good faith facilitate the development and execution of solutions that are genuinely focused on getting us to the heights we should attain.

We need to seek honest solutions…instead of putting a PR spin on megawatt numbers that are still too small to really matter and make a difference in our lives.

Eyo O. Ekpo is a former Commissioner in the Nigerian Electricity Regulatory Commission and CEO of Excredite Consulting Limited