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Solving The Power Sector Crisis

Solving The Power Sector Crisis

By Chris Emejuru

They say to solve any problem is to first understand the historical foundation from which that problem was derived. The Power Sector crisis is no different.

The Nigerian Electricity Supply Company was established in Nigeria in 1929. It was state owned and since it presented itself as a monopoly with no major competition, it was difficult to meet the needs of all Nigerian citizens. The only significant solution was privatization. It took up until 2005 for significant legislation to take place in which the Electric Power Reform Act of 2005 was enacted. It would help promote a more privatized environment. It allowed for private companies to purchase assets in the transmission, generation, and distribution areas of the Power Sector. And amongst other things, it established what we know as the government regulatory arm, the NERC (Nigeria Electrical Regulatory Commission). Popular today or not, the creation of the NERC was a necessary step. 2 major attributes to this regulatory agency is that it licenses and regulates all investors in generation, transmission, and distribution companies, and overseas the overall electricity market so that all stakeholders will be in compliance.

There are 3 subsectors in the Power Sector and they are the Generation (Gencos), Transmission, and Distribution (Discos) companies. Generation plants are connected to a number of grids with the purpose of supplying power throughout the country. In regards to transmissions, Transmission company of Nigeria (TCN), managed by Manitoba Hydro International, purpose is to transmit power throughout the country without interruption. Finally, you have Distribution Companies (Discos) with the ultimate goal of distributing electricity to consumers. There are 11 distribution companies in Nigeria including Abuja, Benin, Eko, Enugu, Ibadan, Ikeja, Jos, Kaduna, Kano, Portharcourt, and Yola.

From my perspective, the crisis in the Power Sector could have been avoided if more emphasis could have been placed on the following: Qualification, Enforced Legislation, Accountability, Transparency, and more Personal Participation amongst others. When an Employer hires an employee, the first thing an employer looks at is if the employee is qualified. Does the employee have the background, the extensive experience, the knowledge, and ethical reasoning to conclude that he/she is qualified for the position? An employer needs to conduct responsible due diligence to create a responsible outcome. Creating Legislation should not be the only decision to affect an outcome. Implementing legislation should be. If you create rules, but they are not followed, then what is the point of creating rules in the first place? So this reasoning leads to accountability. Any stakeholder who is not law abiding should be held accountable for their actions. Rumors of overcharging customers whether through estimated billing or pre-paid meters needs to be looked at and taken very seriously. This can be solved through more transparency. There is a saying and that is “what is kept in the dark, shall be open in the light.” I challenge all producers in the Power sector to OPEN YOUR BOOKS, PRODUCE FINANCIAL STATEMENTS AND ALL OPERATING INFORMATION, whether legislation requires it or not, and I guarantee it will be of benefit, not only in the short term but the long term as well. Finally, we have what is called Personal Participation. When you as an investor invest in a project with your own money, you are more likely to see that project through in a personal way. And if for whatever reason, the project isn’t succeeding, you will find a way to re-invent the company. BORROWING IS NOT THE ONLY ANSWER! Currently, the Power Sector is in crisis, and there is a lot of borrowing. Is it helping? So, more indepth strategy needs to be put in place rather than looking for bonds or bank loans.

Nigeria has a lot of resources, including Coal. Coal is of today and should not go to waste, but the future is renewable energy. Renewable energy (also known as alternative energy), is an alternative to fossil fuels or traditional energy. Its energy that can never go to waste and includes Solar Power (Sunlight), Wind Power, and Bio Fuels (Vegetable oil, etc which can be used as fuel for transportation) amongst others. There was a renewable energy policy which was launched in April 2015, and it gives more attention to alternatives. It was set according to similar German legislation in regards to decreased reliance on Fossil Fuels. Today, almost all of Germany relies exclusively on renewable energy and it would be great to see Nigeria going in that direction.

Progressive Youth Advocate, Chris Emejuru is a columinist of Nigeria Today

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