Nigeria’s power woes mount as businesses gasp for breath

The epileptic power supply woes in Nigeria which some say tarnished the Goodluck Jonathan administration are getting even worse with the nation’s thermal and hydro power stations struggling to generate up to half their installed capacity, according to BusinessDay investigation.

Constrained by unavailability of gas, about 2,811MW thermal generating capacity was taken out of the system this week, with another 540MW of generating capacity made redundant by low water level at hydro power stations in Northern Nigeria, our reporters learnt.

Industries are made to pay higher electricity bills from the Discos without power supply, and demand for diesel is rising higher with per litre price of the fuel now beyond N150. Beside this, firms are taking out huge budgets to buy new generators, with small businesses the worse hit.

Nowhere is the miserable power supply problem more felt than in the nation’s commercial nerve centre of Lagos, where the noise of generators and the fumes generated now define a city bursting at its seam.

On Monday, only about 20MW of power was made available to the whole of Ikoyi and Victoria Island, the business headquarters of Nigeria and the home of some of the nation’s wealthiest.

Vandalism of a decrepit gas pipeline network and the strangulating hold on gas supply by the inefficient government owned Nigeria Gas Company, mean that whatever gas is available cannot be wheeled to the power stations.

The situation has been made worse by failure of the petroleum ministry to find creative solutions to the unwillingness of the international oil companies, (IOCs) to make the badly needed investment to produce, gather and process enough gas for supply to power stations.

According to a recent report by BusinessDay, up to 300 billion standard cubic feet of gas remains stranded in two fields discovered by both Exxon Mobil and Shell under the Production Sharing Contract (PSC) exploration regime and this gas cannot now be exploited because of an old dispute on ownership of the gas that has lasted more than ten years.

Mike Uzoigwe,  managing  director of Egbin Power Plc said  there is  no  gas, and  consequently  the gas stations   cannot  supply   gas to the power  stations.  Asked if  vandalisation was the problem, he said :”The primary  information that I have  is that  there is  no gas and because of this, we  cannot  operate efficiently”.

Uzoigwe said  Egbin Power plc is currently generating 300 megawatts, instead of 1,300megawatts.

“With this type of situation how can we    pay salaries and meet our cost? The situation is just too bad.”

Analysts who hail the privatisation of the power assets by the Jonathan administration, however, maintain that the sector remains constrained by the whims of senior government officials who serve themselves more than the national interest.

They point to the scandalous dispute that has kept the $500m Geometric Power from being commissioned. Geometric has perhaps the most modern distribution network in Nigeria today, and its 140MW plant remains idle at a time Nigeria needs all the power it can find.

A government official told BusinessDay that a simple order, signed by Vice President Namadi Sambo as chairman of the National Council on Privatisation (NCP) could resolve the crisis, paving the way for Geometric to pay for the distribution asset in Aba, under an existing pricing framework locked up inside the shelves of the Bureau of Public Enterprises, (BPE).

BusinessDay also learnt that a surprise but unnecessary dispute between the ministries of Justice and Finance, over paper work, has cost the acclaimed private sector-owned Azura ower project in Edo state more than two months in construction time.

Work on the Azura site near Benin City was meant to have commenced in December, but it is now being held back by the failure of the Justice Ministry to complete the required paper work.

A third factor militating against progress of the privatised power sector was identified as the slow pace of the various distribution companies which last year began negotiations with potential suppliers for the procurement of embedded power. The distribution companies include Eko Disco, Ikeja Disco, Ibadan Disco, Abuja Disco and Kano Disco.

It is now believed that unless the authorities, including the power regulator, NERC, mandate an early completion of the procurement, it could go on forever.

OLUSOLA BELLO