Power reform: Watching the president’s steps
For the circuit that makes for the availability of electricity from generation to distribution to be complete, the links must be joined. They must also be joined in the specific order of generation to transmission to distribution for the circuit to function properly. With the electricity consumer at the receiving end of the distribution link, […]
For the circuit that makes for the availability of electricity from generation to distribution to be complete, the links must be joined. They must also be joined in the specific order of generation to transmission to distribution for the circuit to function properly. With the electricity consumer at the receiving end of the distribution link, a break between any of the links will inevitably result in the loss of electricity supply to the consumer.
Put otherwise, if electricity is generated and is not transmitted successfully, then it would not be available for distribution to consumers. Likewise, if electricity is transmitted successfully and cannot be distributed for any reason, then consumers cannot have electricity for their sundry domestic and industrial uses.
Of course, the issue of transmitting or distributing electricity cannot arise unless electricity is generated in the first place. Therefore, under the grid system, which Nigeria and most countries operate, these links are necessary for ensuring the availability of electricity to consumers. In effect, the efficient running of generation, transmission and distribution stations, together with the related infrastructure – i.e., generators, circuit breakers, surge arresters, transmission lines, etc. is necessary for the conveyance of electricity from the point of generation to the point of utilisation.
Indeed, one major reason for embarking on the reform of the Nigerian power sector, as those leading the reform have said repeatedly, is to ensure that the country’s generation, transmission and distribution stations – and the related infrastructure – run so efficiently as to guarantee steady and full supply of electricity to the Nigerian people. As can be inferred from President Goodluck Jonathan’s speech at the launch of the Roadmap for Power Sector Reform in Lagos on August 26, 2010, ensuring steady and full supply of electricity is necessary in order to “tackle the critical challenge of the enormous electric power deficit and transforming the sector into the major driver of Nigeria’s economic development process.”
The speech also gives clear hints that the reform will entail far-reaching restructuring of the electricity sector along technical-cum-operational lines. The common denominator of the projected restructuring as it appertains to the generation and distribution arms of the sector is encapsulated in the president’s declaration in the speech that “from next year, government will disengage from generation and distribution of electricity in the country and provide the enabling environment for the private sector to effectively take up these roles.”
More specifically, however, the projected restructuring in relation to generation is summarised in the president’s revelation that “Nigeria will largely rely on hydro, coal and natural gas for generation of much of its power over the next decade, while the quantum of electricity generated through nuclear and renewable energy such as solar, wind and biomass will be gradually developed…Coal will also be fully exploited over the next few years to install power plants in such places as Gombe, Kogi, Enugu and Benue. However, the largest resource for fuel-to-power will come from natural gas.
“On the other hand, the projected restructuring, as it concerns the distribution arm of the power sector, is summarised in the president’s declaration that “the federal government has decided to follow through on the EPSR Act and privatize the distribution companies in order to induce effectiveness and efficient management. NERC will provide strict oversight on these distribution companies. In the plan of the BPE, the federal and state governments will maintain some equity positions in the new privatised companies until such a period that these companies are stable and the various governments can divest themselves by selling their shares to the Nigerian public.”
Compared with the above scenarios, the projected restructuring of the transmission arm of the power sector will yield considerably different results. For while the ownership of the generation arm of the power sector will be partly privatised and partly concessioned under the reform, and while that of the distribution arm will be fully privatised, “Government,” as the president’s speech revealed, “will still own the transmission grid but with private sector management.”
For the technical side of the projected restructuring, the speech also makes the following revelation regarding the transmission arm of the power sector: “… the federal government plans to embark on significant increase in transmission that will begin to fundamentally address anticipated capacity problems. We plan to build a super transmission network at the voltage level of 700 KV that will go from Afam in Rivers State, through Makurdi to Jos, Kaduna, Shiroro, Jebba, and then down to Lagos through Oshogbo; before going through Benin to Onitsha, to Alaoji and finally back to Afam…A line will also run from the 700 KV line in Kaduna to Kano and from Jos to Gombe.
“Simultaneously, there will be significant work in providing reliability and stability in the network infrastructure by providing grid integrity and reliability systems, power quality and systems-stability systems, as well as institution of corporate governance of the Transmission Company of Nigeria.”
Incidentally, the Transmission Company of Nigeria (TCN) is one of the successor companies of the Power Holding Company of Nigeria (PHCN) whose chronic inefficiency necessitated the reform. It is also the company under whose aegis the transmission of electricity would be managed as a government-owned concern in the post-reform era.
However, like most reforms, the power sector reform has attracted its fair share of criticism. It has, for instance, been criticised as a ploy to sale “a gigantic national asset,” as a certain forum organised by the Lagos-based Resource Centre for Human Rights and Civic Education (CHRCED), following the launch of the road map, described PHCN. The group, as reported on page 28 of Leadership newspaper of August 31, 2010, had mobilised “civil society groups” against the reform in order to prevent the so-called sale of “such a gigantic national asset.”
But this criticism cannot be justified considering the plan of government to retain ownership of the transmission arm of the power sector and the attendant national assets after the reform. In fact, the plan positively negates the criticism. For if, as the criticism alleges, the aim of the reform is to sell the “gigantic national asset”, then the reform would not have made room for that “asset” to be improved and then partly concessioned, retained as a government-owned concern, or privatised in accordance with necessity.
That the reform made room for such varied possibilities is, I dare say, an indication that it has a higher and nobler goal than a mere sell of a national asset would suggest. That is, the goal of genuinely repositioning an organisation which, on account of what I have referred to as its chronic inefficiency, has become more of a national liability than an asset – repositioning it is “the major driver of Nigeria’s economic development process.”
Oke was once a staff of the defunct National Electric Power Authority (NEPA) now Power Holding Company of Nigeria (PHCN). ([email protected])