Nigerians groan over cost of power as supply worsens

 
Fri Apr 30th, 2021 - Lagos
 

Electricity grid


For more than three weeks, power supply in the country has worsened as the frequency and duration drastically reduced. Meanwhile, the cost of alternative supply is on the rise, causing Nigerians to groan.

The Guardian reported that the outage was due to the drop in power generation from 4,000MW, as 11 power plants went idle, and others saw their output decline.

According to data from the Nigerian Electricity System, generation dropped from 4,394MW to 3,922.2MW and the situation has remained the same as at the time of filing this report.

The idle plants include the six National Integrated Power Project (NIPP) plants; Geregu II, Sapele II, Olorunsogo, Omotosho, Ihovbor, and Gbarain. Afam IV&V, Ibom Power, AES, ASCO and Egbin ST6.

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Gas and water constraints and low demand by distribution companies were cited as reasons why 2,830.7MW of generation capacity could not be utilised.

But, unfortunately for Nigerians on estimated billing, the electricity bills they occasionally receive from the Distribution Companies (DisCos) have not changed and most customers believe they are paying for service not rendered.

However, experts have warned that if the situation is not addressed, it could worsen the security challenges in the country, while urging stakeholders in the value chain to address the situation.

A company in Lagos, Castremineo, which is into the fabrication and installation of buildings, complained that production had been slow due to the power outage occasioned by the power shedding.

The General Manager of the company, Seyi Egunjobi, lamented that the situation has affected the profit of the economy, as the company had to rely on alternative power sources.

“The current power shedding, which has resulted into power outages, has drastically affected us in many adverse ways. As a company that uses power in our fabrication and production processes, it has been extremely difficult to rely solely on the power from the DisCo. We had to resort to an alternative means of power generation, which is the generator. The cost of diesel and the associated maintenance cost of the generator made our overhead cost unbearable

“This has, in turn, affected our income and profit. Hours of productive works have been reduced to minimise the amount of diesel run and delivery affected once in a while.”

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He urged the government to invest more in alternative power sources for commercial purposes and also assist small and medium scale companies with practical and achievable means of navigating through these terrible times so that it can improve the economy of the nation in general.

Speaking with The Guardian, Petroleum Economist, Prof. Adeola Adenikinju, stated that the situation is already hurting the economy, as Nigeria is still recovering from the effect of COVID-19.

He said: “If there is load shedding that means the cost of businesses that are dependent on the grid will be affected. They will not be able to produce, and that will have impact on our economic recovery. We are just getting out of recession and our economy is still very weak and the recovery is very slow.

“Anything that will hinder the operation of normal businesses will have impact on economic recovery and it will affect employment and poverty.

“This is not a good time for a generation to drop as we are currently suffering from the impact of COVID-19. It will also mean additional costs for businesses.

“The economic implications are very huge and not just economic implications, the social implications are also very huge. Part of the reasons we have serious security issues is because our people are unemployed and under serious hardship. The more the economy is down the more people are out of jobs and that will also affect the security.”

Prof. Adenikinju who is also the Director, the University of Ibadan Centre for Petroleum Economic and Energy, Oyo State added that there are fundamental issues bedeviling the sector, which cut across the generation, transmission and distribution chain of the sector. He urged stakeholders in the value chain to fulfill their side of the contracts.

“Problems in the sector have been there for some time and there is a need to address these fundamental problems. We cannot just be reacting to it in a knee-jack way. These issues cut across generation, transmission and distribution.

“There is a need also for stakeholders to come together and find a way of really looking at the problem and proffer solutions. There must be some form of determination to get over these problems. This is not the time to start trading blames.

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“There is a need for the DisCos, TCN, GenCos to look at the value chain and identify where problems are and try to resolve them.

“The government has undertaken and they have to commit to that. Government is a party to the contract and they play an important role. There are areas the government has made undertakings that they have to fulfill their side.

“Also, there are roles that the DisCos also have to play and they haven’t. All stakeholders in the value chain have one fault or the other and there is a need to address it so that we can get the sector moving. Where we are is quite unfortunate. We shouldn’t be here at all.”

Adenikinju urged the Nigerian Electricity Regulatory Commission (NERC) to be effective in ensuring that they get the industry working. On his part, an energy expert, Muntasir Adamu urged the government to work with stakeholders in the industry to address the gas constraints that have made it impossible for 11 power plants not to generate any electricity.

“Over 80 per cent of power generation is dependent on gas and as such, we need to address this concern as quickly as possible.”He urged the DisCo to ensure that customers are billed based on the amount of power consumed and not arbitrarily, saying customers should contest any bill they are not comfortable with through the customer care departments of the Distribution Companies.

“Generation dropped drastically since most power plants were idle, and others saw their output decline. They identified Gas constraints for the Gas power plants, water constraints for the hydropower plants and low demand by distribution companies were cited as reasons.”
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source: Guardian