- Obsolete and dilapidated plants operating at less than 36% of installed capacity are over 30 years old; 48% are over 25 years old and 80% are over 20 years old.
- Lack of, and poor maintenance of existing plants and poor managerial efficiency at Generation, Transmission and Distribution sides of the value-chain.
Comparing Nigeria’s electricity consumption per capita with peers and the developed world shows that there is a correlation between access to energy and the cost of doing business as well as the development of small businesses. Current power generation stands at 3,800 Megawatts and the per capita electricity usage is 136 kilowatt/hour. Nigeria’s electricity consumption on a per capita basis is among the lowest in the world when compared with the average per capita electricity usage in Libya, 4,270KWH; India, 616KWH; China, 2,944KWH; South Africa, 4,803 KWH; Singapore, 8,307KWH; and the United States, 13,394KWH.
Reforming Nigeria’s electricity market without a positive change in fundamentals is another critical factor.
Since reforming the sector, it seems that the new players are rather slow in their reaction to a lot of the capacity issues in the industry. Ordinarily, one would have expected that with the privatisation of the electricity market, the new industry players would be in their Capacity Upgrade Phase and would have started rolling out innovative offering with a consequent improvement in the delivery of value to electricity consumers, but funding seems to be a major problem.
Another problem is the slow pace of putting together the requisite industry structures.
The structure of the market is the missing link.
While one would have expected that the industry would pull together in order to ensure the smooth take-off of the Transitional Electricity Market (TEM), the Power Purchase Agreements (PPAs), Gas Supply Aggregation Agreements (GSAA) and Gas Transportation Agreements (GTAs), which would have unlocked the potential of the market, on the contrary, what we are witnessing is the slow take-off of the broad industry structures which would have helped ease out the old order and deliver the kind of game-changing dynamics we witnessed upon the liberalisation of the telecoms market.
But, one question that is left unanswered is: Between government and the operators, who is to blame?
Even though government has not been up to speed in helping to oversee the transition from policy to practice, truth be told, the quality of players in the game is hindering envisaged progress. My take on this matter is that we got the power reforms wrong from the licence bid stage.
Source: By Bolaji Okusaga,