Leadership (Abuja)
20 November 2008
editorial
Early this year, the electricity supply crisis in Nigeria did not only continue but actually got worse, to the extent that the Power Holding Company of Nigeria (PHCN) had to announce there would be disruption of power supply as a result of servicing work on the gas pipeline network. Huge amounts of money have been spent on getting new independent power producers up and running, but that ability to feed the national grid has been undermined by a general lack of coordination.
The older power plants have, meanwhile, been showing signs of aging, despite the huge expenditure said to have been incurred on maintenance and refurbishment. Egbin, the biggest power station in Lagos, with a design capacity of 1,320MW, was at one point producing only 100MW.
There are, on paper, 15 thermal (mainly gas-fired) power stations either in existence, under construction or planned in the southern parts of the country, but, in actual fact, the national grid relies heavily on four old plants - Delta, Afam, Sapele and the Lagos Egbin. But the lack of maintenance on thermal power stations means that the most reliable sources of electricity are the hydroelectric stations located in the northern part of the country.
At the tail end of the Obasanjo administration, several independent power projects (IPPs) contracts worth billions of dollars were awarded, mostly in the Niger Delta area, for the building of power plants and distribution infrastructure in order to address the problem of acute power shortage the country has been facing for several years. The Mambilla hydro-electricity project, located in Taraba State, was among the projects considered after a series of protests of its deliberate exclusion earlier.
Although all the administrative and technical evaluation of the firms that have shown interest to participate in the project had been carried out and due process certification had been completed by May 2007, the contracts were yet to be awarded when the tenure of the Obasanjo administration came to an end. The execution of these projects ran into hitches due to a huge outcry by the public against the unilateral decision of the Obasanjo regime to use excess crude account to finance the projects without proper adherence to laid-down procedures, which led to the recent probe of the entire IPP projects by the House of Representatives.
With the coming of the Yar'Adua administration and his style of respect for the rule of law and adherence to due process, the federal government sought and got the consent and approval of the state governments for it to use part of the earnings from the excess crude account to finance these IPPs. Over $5billion has since been contributed by the federal and state governments to finance what is now known as the power emergency projects.
The Mambilla hydroelectric power project, when completed, will have the capacity to inject 2,600MW of electricity to the national grid. One advantage it has over the other hydro plants located on the rivers Niger, Kainji, Shiroro and Jebba is that, in the case of Mambilla, all the waters are within Nigerian territory and the waterfall is such that the level will hardly decrease even if there is any dry season water fluctuation. It was conceived over 30 years ago and Yar'Adua will make history by being the one to bring it to reality, thus helping to solve the nation's perennial electricity problem.
The lack of investments in the power sector for years, coupled with increased demand especially over the past decade, has led the country into a serious energy crisis. Companies are forced to use generators, and energy costs are one of the two factors, along with transport costs, that most affect the competitiveness of the nation's manufacturing sector. Reducing this cost is now a top priority of the current administration, and there are very high hopes due to the fact that power is one of the seven-point agenda of the Yar'Adua regime.
The government expects to provide a solution to the continuing energy shortage, because the current scandalous energy deficit is the Achilles heel of the Nigerian economy, even more than the difficulties encountered due to lack of necessary and sufficient investments in other infrastructural facilities. Demand for energy has increased considerably during the past two decades due to increase in population, creation of new states and local government areas, as well as economic growth.
The main player in the sector is the government-owned Power Holding Company of Nigeria (PHCN) responsible for production, transmission and distribution of electricity. With the ongoing reform programme, the energy sector, like all other sectors, is undergoing structural and institutional changes. The state's role is being changed, markets are being liberalised and private initiatives encouraged.
With the inauguration of the National Energy Council and the establishment of the Nigerian Electricity Regulatory Commission (NERC), government is determined to establish an efficient system, respectful of the environment, which ensures effective production, transmission, distribution and optimal use of energy, all the while taking into consideration both commercial and national interests. The construction of the Mambilla Hydroelectric Power Project is, therefore, indispensable and urgent to the realisation of the reasoned, participatory and orderly approach to developing this extremely important sector for the attainment of the Vision 20-2020 plan, which is the cornerstone of this administration's medium- to long-term economic blueprint.
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