Unanswered questions on public power supply


Prof. Chinedu Nebo

FORMER Minister of Power, Prof. Chinedu Nebo’s parting advice to the President Muhammadu Buhari administration on how to improve public power supply raises some troubling questions.

And they need answers urgently so the new government is not misled into the non-performance that characterised the previous regime.

Power generation and supply have fallen far short of the targets set in the Vision 2020 Economic Transformation Blueprint. For the record, the peak volume of electricity wheeled by the defunct Power Holding Company of Nigeria (PHCN) reached 4517MW for a brief moment in December 2012.

Nebo said: “The grid is being strengthened, and for the first time, we were able to hit a peak of over 10,000 MW hours in a day within the Jonathan administration …”

The exact date was not given. But between both peaks, public power supply has hardly averaged 3,000 MW throughout because the Jonathan administration “lost the war against vandalism and we lost the war against inadequate gas supply… Every two weeks, the gas pipelines are blown up.

It takes two weeks to fix then only for them to be blown up again within 24 to 48 hours of fixing.” Needless to state that the 2015 power generation and supply target of 20,000 MW is but a pipe dream.

Pertinent questions for the Ministry of Power and also the Nigerian National Petroleum Corporation (NNPC) include: What were/are the perceived grievances of the pipeline vandals? Second, Nebo indicated that it cost about N120 million monthly to fix damaged pipelines.

So, was it cheaper to incur such cost of repairs than to address the perceived grievances? Third, were any steps taken to establish possible involvement of the contractors handling the lucrative repairs in the recurring incidents of vandalism? Four, did the over N1 billion that Nebo said was being spent monthly in recent time to ensure the integrity of transportation of the gas-to-pipeline put an end to the incidents?

With regard to inadequate gas supply, the former minister complained that while the country produces five billion standard cubit feet of gas per day (5 bscfd), 4 bscfd was exported leaving just 1 bscfd for domestic use. Even then gas producers deliver the 1 bscfd preferentially to industries thereby “starving the power sector of the needed gas to industrialise this country”.

But that is an odd development because there exists the Domestic Gas Supply Obligation (DGSC) rule that requires gas players to set aside a predetermined amount of gas produced for the domestic market. And that leads to the fifth question: If 1 bscfd of gas is insufficient for domestic use, why has the DGSC not been adjusted appropriately?

It is public knowledge that gas producers/suppliers cut down gas supplies to the power plants over debts owed by the then PHCN. And so to the sixth question: In light of the Federal Government’s arrangement with the Central Bank of Nigeria (CBN), have the legacy debts been cleared in full to pave the way for fresh supplies of gas to flow smoothly?

Incidentally, while the Ministry of Power routinely ascribed the low power generation and supply to incessant pipeline vandalism, industries obtain relatively steady flow of gas to operate their mini-power plants. Hence pipeline vandalism may well be a smokescreen for covering up other problems bedevelling the power sector. As for the alleged preferential treatment, the seventh question arises.

Is there the likelihood that industries enjoy preferential gas supply because such supplies attract more favourable terms such as higher price and shorter credit period than the power plants are being offered? Alternatively, can the growing gas demand by industries be attributable to a switch by firms to gas mini-plants away from relatively expensive diesel-fuelled generations and/or unattractive DISCOS’ electricity tariffs which recently provoked protests?

The inadequate gas supply may be viewed from another perspective. The frequent disruptions to the gas pipelines reduce the volume of gas delivered for domestic use below 1 bscfd over a given period, thereby raising the volume available to gas producers for export.

That gives rise to the eighth question. Are proceeds of the excess gas export volume creamed from under-supply of DGSC volumes paid by gas producers into the Federation Account or corruptly disposed of in collusion with elements in NNPC and the Ministry of Power? Adjunctly, does such possible self-enrichment not constitute additional incentive to vandalise the gas pipelines every fortnight and so expertly?

Sincere answers to the above questions would expose the perennial alibis of inadequate gas supply and pipeline vandalism to have been deliberately left unresolved. The one-day-long peak transmission of over 10,000 MW on the national grid clearly indicated that a relay of mega-capacity power plants could efficiently deliver bulk electricity to the people. Gas-fired mega-power plants are environment-friendly sources of cheap electricity.

But kicked out of office after 27 months by the 2015 Presidential Elections, Nebo leaves a legacy of excuses for failure in his assigned responsibility, unrealised plans to sell off the Transmission Company of Nigeria and a belatedly revealed yearning for an era of embedded natural gas mini-power plants in the country.

So, in addition to turning Nigeria to the world’s largest importer of petrol and diesel generating sets, the contrived poor state of public power supply is gearing to make the country the world’s largest market for imported 1-20 megawatt capacity natural gas power plants. The electricity so produced will be relatively expensive.

By the way, the probability of mega-capacity embedded power plants raises the ninth question. With blackout everywhere owing to inadequate power generation and supply, why does the Ministry of Power consider redundant the 400 MW of electricity that may be easily obtained from the independent power plant that literally sits on a natural gas field near Aba in Abia State?

Nebo canvassed that embedded small capacity power plants may be installed within a short time while mega-capacity power plants would require up to six years to gestate “starting from concept to design and financing, getting international partners, the partial risk and national sovereign guarantee”. But Nebo was deliberately being distrustful in Nigeria’s capability.

As an erstwhile Vice-Chancellor, Nebo will agree that, given the go-ahead, Nigerian universities, in collaboration with relevant cadres of retired and in-house personnel in the power sector, are eminently suited for the task of designing requisite power plants for our environment.

It may be recalled that the Manufacturers’ Association of Nigeria (MAN) not very long ago expressed the intention to set up an independent power plant (IPP). MAN harbours far better potential partners on power projects than can be got internationally.

As for financing of power projects, this newspaper has shown that proper handling of the country’s oil proceeds (even at the current low crude prices) and autonomous inflows of foreign exchange (forex) will rapidly transform the economy.

For instance, it will become possible for investors to access at internationally competitive interest rates currently unutilised bank credit capacity in excess of N70 trillion.

Also it will facilitate accumulation of substantial amounts of investable external reserves as the Federal Government’s internally generated forex revenue.

Therefore, Nigeria can self-finance key infrastructural projects such as IPPs, national gas and power transmission grids in such less than six years without recourse to IMF/World Bank guarantee or external loans. It behoves the Federal Government to adopt policies that maximise the benefits derivable from the country’s ample resources.

And very importantly, government should engage the services of Nigerians who know and are willing to do what is necessary to make the economy self-reliant and prosperous. Vested interests have been left to cripple the economy for too long.

  • amador kester

    Some of the worst corrupt tendencies are happening in the power sector whereby the discos withhold prepaid meters and give crazy estimated bills even without services while the regulators look the other way.Reports say the southeast has the worst culprits. Its high time the efcc steps into the power sector

  • honesty NO1

    Who is NEBO? Who are the vandals? If Nebo knows who they are what did jonathan do about it? I think the argument about vandals is a coverup by nebo because it will only take a few scapegoats with capital punishment as economic saboteurs to put an end to the vandalisation of the gas pipe gas line. Nebo should just go home. He is a failure !!!!!!!!!!!!