Despite N7trn Investment, Poor Power Supply Lingers

Despite the federal government’s claim of spending N7 trillion as direct interventions in the power sector even after privatising the electricity generation and distribution arms of the industry since November 2013, the continual breakdown of the national grid remains a significant concern among Nigerians.

LEADERSHIP Data Miners’ findings indicate that the grid has experienced a total of 223 collapses since 2010. Data gathered showed that in 2010, Nigeria’s electricity sector experienced 42 total and partial crashes; 19 in 2011; 24 in 2012; in 2013, there were 24 instances of power system collapses, followed by 13 in 2014, 10 in 2015, and a substantial increase to 28 in 2016. In 2017, there were 21 recorded cases of grid collapse. Subsequently, in 2018, 2019, 2020, and 2021, there were 13, 11, four, and four collapses, respectively. Notably, between 2022 and the present year, the grid has collapsed approximately 10 times.

Incessant grid collapses and power outages come at a huge cost to the nation’s economy. The cost of power outage in Nigeria is estimated at around $28billion – equivalent to 2 per cent of Gross Domestic Product (GDP).

The World Bank country director for Nigeria, Shubham Chaudhuri, stated that the lack of stable power had hampered investment and job creation which would empower 100 million citizens and deliver them from poverty.

According to experts, grid failures are due to various factors, including theft and vandalisation of grid equipment, unreliable gas supply to thermal power plants, reduced water levels at hydropower facilities, ageing and fragile national grid infrastructure, and load rejection, among other issues. They said that the government plays a pivotal role in rectifying these recurrent grid failures.

An energy expert, Dr Dayo Hassan, said since the government currently retains ownership and oversight of the national transmission grid through the Transmission Company of Nigeria (TCN), the government should invest in modern surveillance and monitoring technology for the grid.

He said, ‘‘Another contributory factor to grid disruptions, which the government can address, is the inadequacy of power generation. Many thermal power plants operate below capacity or remain inactive due to gas supply constraints stemming from substantial debts owed to gas suppliers by electricity generation companies.

“Addressing the liquidity challenge within the power value-chain necessitates the timely settlement of debts owed to electricity generation and gas supply firms. Timely payments to gas suppliers can stimulate investments in the domestic gas sector, ensuring uninterrupted supply to the market.’’

Also, operators in the sector believe that without diversifying Nigeria’s electricity mix and improving efficiency, the current grid network would not be able to meet the electricity needs of Nigeria’s growing population.

A World Bank-sponsored report in 2021 showed that 85 million Nigerians are not connected to the grid, and that Nigeria loses about $29 billion annually due to erratic power supply. Pundits said this is a significant sum of money which could be used to improve the economy and enhance living conditions.

While some have attributed the challenges faced by the Transmission Company of Nigeria (TCN), particularly in relation to the national electricity grid, to issues such as poor management, the TCN recently has stressed that due to the significant vandalisation of its facilities, Nigerians should not expect a reliable national grid.

The TCN criticized the public for tolerating vandals who continue to engage in destructive actions against its infrastructure which, it says, makes it impossible to have grid stability and expansion.

“The rate at which TCN’s installations are being vandalised nationwide is reaching a critical level. We cannot simultaneously preserve and squander our resources. We cannot condone the destruction of power infrastructure or turn a blind eye to such activities and still expect the grid to remain stable and expand,” it said.

There have been reports of 108 power transmission towers being destroyed by vandals between January 2022 and September 2023, as well as incidents in May where vandals destroyed nine transmission towers in Ogun State.

These incidents have occurred in various regions across the country, including Benin, Abuja, Lagos, Enugu, and Kano. Some of the attacks on TCN towers were attributed to Boko Haram terrorists in Borno State two years ago, indicating that these incidents go beyond mere theft and accidents, but deliberate acts of sabotage. Stakeholders in the industry have expressed deep concern over this persistent issue which has plagued the nation for years, leading to an unreliable and unstable power supply.

According to an advocacy group, Better Nigeria Initiative, the recurring breakdowns in the nation’s power grid should genuinely concern Nigerians, especially those in positions of authority. Essentially, these incidents raise serious doubts about the government’s capacity to effectively tackle a problem that has consistently hindered the country’s economic progress.

It said, ‘‘Not too long ago, the Transmission Company of Nigeria (TCN) proudly declared more than 400 consecutive days of uninterrupted grid stability, providing a ray of hope to a nation accustomed to enduring power shortages. However, this optimism was short-lived as the grid faltered shortly after that announcement. This recent collapse adds to a troubling statistic: in 2022 alone, the national grid failed eight times, underscoring a persistent issue that successive administrations have struggled to resolve. It’s worth noting that the national grid experienced 98 collapses during the tenure of former President Muhammadu Buhari, despite the Federal Government injecting over N1.51 trillion into the sector since assuming office in 2015.

‘‘One cannot help but contemplate how a country with a population exceeding 200 million people is only capable of generating a mere 5,000 megawatts (MW) of electricity. To provide context, South Africa, with a population of 59.39 million, generates an impressive 58,095 MW, while Egypt, with a population of 109 million, produces over 59,000 MW. Nigeria’s power generation significantly lags behind its potential, hindering economic growth and development,’’ the group said in a statement. An energy expert, Usman Mohammed said when discussing Nigeria’s power challenges, it is impossible to overlook the Siemens agreement, a project that once held the promise of enhancing the nation’s power infrastructure.

He said, ‘‘The power crisis in Nigeria extends beyond governmental policies; it has palpable and substantial ramifications on the daily lives of ordinary Nigerians. Business owners are compelled to allocate substantial funds towards the procurement, fueling, and maintenance of generators, costs inevitably transferred to consumers. This added financial burden exacerbates an already delicate economy, underscoring the urgency of finding a sustainable resolution to the power predicament.

‘‘So, why have successive administrations struggled to effectively combat these power outages? The answer is multifaceted, encompassing insufficient infrastructure investment, mismanagement of resources, and a lack of transparency and accountability within the power sector. Corruption and bureaucratic inefficiencies have further obstructed progress.’’

A leading manufacturer in Nigeria, Mallam Bello Ahmed, who said he spends millions of naira on alternative power supply in his business, said addressing the power crisis in Nigeria requires a comprehensive approach. There is a need for substantial investments in power generation, transmission, and distribution infrastructure. He said the government must prioritize the refurbishment and expansion of the power grid to ensure its capacity aligns with the escalating electricity demand.

Another stakeholder who craved anonymity said transparency must be upheld in the allocation and management of funds within the power sector. According to him, the eradication of corruption at all levels is imperative to ensure resource utilization efficiency.

He said, ‘‘Nigeria should also explore alternative energy sources, such as renewables, reducing reliance on fossil fuels and fostering a more sustainable energy mix. Encouraging private sector involvement in the power sector can bring the requisite expertise and investments for its rejuvenation.

‘‘Importantly, the government must provide a transparent update on the Siemens agreement, addressing any delays or challenges it has encountered and ensuring its successful execution. Consequently, Nigeria’s power crisis is an entrenched problem that has endured for far too long, affecting every facet of Nigerian life, from economic development to the daily routines of citizens and business proprietors.’’

A businessman, Geoffrey Odey,  said that Nigeria, throughout its history as an independent nation, has grappled with the persistent issue of insufficient power supply. According to him, in global rankings of electricity production, Nigeria lags far behind other major nations.

Nigeria’s power generation, in contrast, is alarmingly low. Odey highlights that despite being the largest economy in Africa and the 27th in the world with a GDP of $514 billion, Nigeria’s power generation stands at a mere 29,300 GWh. This starkly contrasts with the expected output of approximately 1.26 million GWh, considering the nation’s population and economic size.

Former minister of power, Barth Nnaji, says manufacturers cannot thrive without a stable supply of electricity and stressed the need for an industrial-scale power supply, which remains an elusive goal unless Nigeria addresses its power challenges comprehensively.

Nnaji called for the establishment of regional grids as a way to address Nigeria’s power issues. Regional grids, in addition to a national grid, would provide reliable and high-quality electricity supply. He stated that states lack the financial means to build their power plants, but regional grids would enable them to collaborate with the private sector on cost-effective, reliable power projects.

Also, experts say that as Nigeria’s population continues to grow, the country will need to significantly increase its power generation by 2030. Nevertheless, nearly half of the population lacks access to electricity, and even those with access frequently experience power outages. Experts estimate that Nigeria must invest over $100 billion in the power sector over the next two decades to address these issues.