The truth: IPP is not going to work as Nigerians expect—NERC boss

We have read many reports that government has licensed Independent Power Projects but little is heard after that. What is the situation? The truth of the matter is that the IPPs are not going to work as Nigerians expect. It is not something you put your capital into today and tomorrow you see it in […]

We have read many reports that government has licensed Independent Power Projects but little is heard after that. What is the situation?

The truth of the matter is that the IPPs are not going to work as Nigerians expect. It is not something you put your capital into today and tomorrow you see it in operation. The process takes a long gestation period to become operational. For the minimum, we need not less than three years for an IPP plant to be operational, depending on the capacity.  It is not possible to license IPP today and next year you see it becoming operational. Another issue is most of the IPPs we have registered depend on gas supply. We know the problems we are presently encountering on the use of gas and Nigerians should be patient. Even the power companies on ground do not have adequate supply of gas. So, the great challenge here is ensuring adequate supply of gas for the present companies and also evolving measures for the new IPPs that are coming on board.  That is what we are involved in addressing now. Just this morning, we had a meeting with the NNPC on ways of ensuring improved and adequate gas supply for the power companies.  We hope by the grace of God to overcome this challenge of gas supply soonest.

Do you have any deadline for these IPPs to become fully operational?

As I have told you, we have several of these power companies becoming operational just as I told you of the Dangote power plant at Obajana.  We also have power plants that are established to serve their companies and some of these power generations are for the companies. We presently have nine of such power plants in Lagos that would only be concerned in serving the power needs of their industries.

When do you think Nigeria can attain enhanced and adequate power generation, and what is the total power generation capacity needed for the country’s power sector?

The process of adequate power generation for the country cannot be feasible for now, as the country’s power generation may increase with increase in the generation capacity of the country. If, for instance, we say that what the country needs is 12,000 megawatts, you will be shocked to discover that even after attaining such a target, the country will still need to increase power generation as the resuscitated industries will make it imperative to continue increasing the power generation capacity. With the increase in the power generation, we will experience an increase in the demand for power.  Once we have that, then the challenge will be the need to sustain our needs for power. I am happy to state here that we have put enough measures on ground to achieve that.  We have the IPPs on ground and I am sure, by the grace of God, they will soon become operational. We are envisaging that before the beginning of next year, we hope to generate 10,000 megawatts for the country.

As you earlier mentioned, the problems of gas supply are enormous. Why is the government not taking advantage of abundant solar power in the north for power generation?

Government is looking into such possibilities and I am happy to tell you that government is making efforts towards the diversification of power base for the country.  I think Nigerians should take note that it is impossible for the government to do everything; the private sector should be a partner in this endeavour. What the government is presently doing is to create a favourable environment for the participation of private companies towards attaining the vision of enhanced and improved power sector in the country.

There are some IPPs that have been completed and are not allowed to distribute. Example is Ibom Power Project. Why can’t the government grant licence to this IPP to distribute?

The problem of Ibom Power Project is that of power evacuation. The transmission facilities there cannot evacuate the 190 megawatts and even before they built the plant, they knew about it. I think they should have built the power plant in an area that they could easily evacuate the power.  I know as at now that they are constructing power transmission plant to evacuate the generated power which will resolve the problem. We discussed it recently when the Ibom Power Project man was here.

So, most of the problems we are facing are that of transmission and we are not resting on our oars to ensure that additional transmission lines are built to evacuate power.  Now that we are having problems with transmission of power, even if we generate the 6000 megawatts, we will definitely have a problem evacuating the power. But the government is building new transmission lines and very soon we shall meet the target and tackle the problems associated with evacuation of power. I am sure that before the middle of this year most of the projects aimed at expanding the transmission capacity of the power sector will be completed and Nigerians will begin to see enhanced and improved power supply for the country.

 As a regulatory body what have you been doing to improve electricity generation capacity in the country?

We have done a lot as a regulatory body with the sole purpose of providing an enabling environment for private partnership in the enhancement of the power sector and then ensuring the protection of the consumer‘s rights. In the past few months, we have licensed additional five Independent Power Producers with only one of them based on solar and the remaining four based on gas. One of the IPPs, Dangote at Obajana, is already operational with a capacity of 135 megawatts. There is also the issue of safety that has been pursued by the NERC with the creation of a committee to look into the issue.  We have also directed the distribution companies to obtain health insurance for their staff and other third parties for liabilities for people that get electrocuted so that they could be compensated.

On consumers’ related issues, we have gone to about seven states of the federation and listened to complaints of consumers through what we call Power Consumers’ Assembly. People who have complaints are allowed to state their complaints and solutions are proffered to resolve the issues. Next week, we intend to have such an assembly in Wuse, Kubwa and Gwagwalada, all in the Federal Capital Territory. We have also established a committee to travel round the country and listen to consumers’ problems that have to do with issues relating to billings, among other matters.  We have been made to understand that consumers are made to pay for the replacement of their analogue metres with pre-paid metre. That should not be so, as it is merely a replacement and not the purchase of new ones.

Have you set up a committee to ensure that consumers do not pay for replaced metres?

As I have said, we have constituted a committee on the issue and the committee is handling the matter effectively and we are satisfied with their work.

Looking at the present condition, do you have an effective monitoring committee, and what sanctions do you impose on violators?

At NERC we recognise the fact that we are putting up an effective framework that would ensure not only the enhancement of power sector but also the protection of consumers’ rights. If you look at the number of distribution companies in the power sector today, you will agree with me that the challenges are there and some of the companies may not come up with an accurate data on the registered number of consumers they have.  What we are presently doing is looking closely at the operations of the 11 distribution companies and you may also need to know that the task ahead for the NERC is enormous and we are poised to tackle the challenge.  The commission has completed arrangements to send staff to the southern states to hear complaints from consumers in the southern part of the country. This we believe will go a long way in ensuring effective supervision of companies involved in the power sector.