Presently, the amount of power energy that is accounted for by the Discos is far below the amount generated and transmitted to them. The majority is lost at the distribution end of the chain
About thirty years ago, the World Bank organized a seminar in Abidjan, Cote D’Ivoire on “Reducing Power Systems Losses in Africa.” The Late Engr. Tam Balogun and this writer represented the then National Electric Power Authority (NEPA) at the seminar. It was a unique opportunity to hear from international energy economists.
Subsequently, this writer headed a team of professionals in NEPA that monitored the activities of the World Bank in the organization. The bank had earlier provided a $200 Million loan for the Lagos Power Distribution Expansion and country-wide systems rehabilitation.
By the late 1980s, the World Bank in one of its meetings with us had told the then Chief Executive Officer that the electricity company was heading for the rocks. According to them, the revenues could not keep up with expenditures in spite of the Federal Government’s financial support. It had become technically insolvent. By then, total power systems losses were in the threshold of forty percent including generation and transmission losses which accounted for about a quarter of that. The rest were distribution technical and commercial losses. As at today, the losses have increased to over sixty percent. This is the cause of the present revenue shortages that is being experienced no matter what the Federal authorities do to provide financial relief.
From the early seventies, power system demand had become a major challenge. The Kainji Hydro Project had been completed shortly before and other large power generating facilities, notably Jebba Hydro, Sapele Thermal, Afam and others followed. All these stations were designed, developed and commissioned based on international procedures and standards. The same applied to the associated transmission and substation infrastructure. Except in a few instances in the power distribution system were strict standards and procedures were followed. That is the reason why most 33kV, 11kV, 415V lines and substations have become unsightly. Most distribution network have to be compromised because funds were inadequate to meet the challenges of power demand.
Losses in the distribution system include the following:
- Excessively long 33kV lines with undersized cables and conductors.
- Long 11kV lines with non standard conductors.
- Indiscriminately long 415 Volts lines with small sized cables and conductors.
- Transformers at various sections of 33/11kV and 11/0.415kV that require upgrading and modernizing.
- Poor termination of joints notably copper/aluminium and aluminium/aluminium.
- No reactive power compensation of long distribution lines.
- Improper earthing or grounding of the network.
- Many customers are not metered and the suppliers rely on estimates which in most cases are non reflective of the correct consumption.
- Energy theft is very common. This is the reason why the discos must take a closer look at the network.
The existing business structures are fully backed by laws. They include Nigerian Electricity Regulatory Commission (NERC), Nigerian Bulk Electricity Trading Company (NBET), Power Generating Companies (GENCOS), Transmission Company of Nigeria (TCN) wholly owned by Government at least for now and Distribution Companies (DISCOS). The issues of unbundling of the old system have been finally settled.
Meanwhile the critical areas to explore are poor energy supply and delivery. Over the years, the amount of power generation was much talked about but more important than that is the percent of the power generation that gets to the users.
Presently, the amount of power energy that is accounted for by the Discos is far below the amount generated and transmitted to them. The majority is lost at the distribution end of the chain. No doubt, this impacts negatively on revenues such that all stakeholders cannot have their entitlements unless the Federal Government provides relief. The question is for how long will the Government support this inefficiency?
Some of the short, medium term solutions include:
- a) Massive investment in US Dollars for the acquisition and replacement of old and inefficient hardware.
- b) Redesigning, planning, construction, commissioning and modernizing operation and maintenance of the system with the aid of computers. In addition, communication systems need to be upgraded with active support of information technologies (IT).
- c) System outages must be minimized and faults quickly brought to notice of officials and immediate remedies taken.
- d) Systems availability must be in the range of ninety five percent in the medium and long term with large commercial and industrial customers targeted while domestic customers are also properly serviced with more officials attending to customers from door to door as a matter of policy.
- e) The quantum of electricity supplied to customers is directly related to the revenues. Effort must therefore be geared to increasing the level of supply in order to gradually get the government out of the age long support it gives the electric utility. Also, all customers must be supplied with pre-paid meters and followed up with checks and inspections to ensure there is no foul play.
With this approach, revenues are expected to jump to far more reasonable levels. The utility would break even and make a reasonable return on investment of between twelve to fifteen percent. This of course assumes that the funding is long term in nature and the merchandizing approach currently being used is phased out.
Engr Ajagbe, worked in the Power System Planning unit of NEPA from 1980 – 1990 and writes from Lagos
