PART 1
The just concluded Future Energy Nigeria Conference for 2017 held at Eko Hotel and Suites, Lagos, Nigeria from 7 – 8 November has set a new dawn for the Nigeria Electricity Supply Industry (NESI). Engineer Idowu Oyebanjo, a UK Chartered Power System Engineer and MD, Idfon Power Engineering Consultants (iPEC), sets the tone for an industry wide historic shift in mindset for all Stakeholders in the NESI saying: “We must move away from talking about the known issues to proffering and implementing solutions”. He said he will expect that from now on, future power conferences in Nigeria will be solution-based.
The theme of the event aligns with the Power Sector Recovery Programme (PSRP) and FG’s plans to attract required investment from the private sector to ensure incremental, stable and uninterrupted electricity supply while promoting economic development opportunities across the country through the Economic and Recovery Growth Plan (ERGP). This can be achieved by focusing on solutions to practical issues surrounding financing power generation, transformation, transmission, distribution, supply, while diversifying the energy mix, closing the metering gap and increasing performance standards of all major stakeholders to mention but a few.
Apart from the strategic conference, the event showcased a pre-conference master class which provided financing options for Renewable Energy (RE) systems, detailing what financiers are looking for when funding a RE project.
The Strategic Conference
The Keynote address 1
What does the Economic Recovery and Growth Plan (ERGP) mean for the Nigerian Energy Sector?
Patrick Okigbo of Nextier Power in his speech highlighted the relationship between ERGP and PSRP while stating the conditions precedent that the Federal Government of Nigeria (FGN) must meet before the World Bank and affiliate financial institutions can grant Nigeria the required loan of 5.3 billion USD to combat the infrastructure, liquidity, and governance challenges the power sector faces. This, according to him, will require specific, strategic interventions by FGN and its regulatory agencies to reset the electricity market. To reset the NESI, immediate steps to take must include financial, operational (technical), governance and policy interventions.
The World Bank Group and others have stated time-bound conditions precedent for the disbursement of loans to FGN to include ensuring:
1. A minimum of 4000MW daily generation capacity in 2017.
2. DisCos’ performance and put in place credible business continuity plans in case DisCos fail.
3. Proper sector governance by appointing qualified and competent professionals from the private sector to lead sector agencies and boards.
4. Data driven processes for decision making across the sector.
5. Sacrosanctity of electricity market contracts.
6. A communication strategy that carries all stakeholders along and especially to have customer buy-in.
7. An FX policy for the power sector.
8. Increase in electricity access in the NESI using off-grid solutions.
9. Private sector investment by removing all barriers to investment including the implementation of a cost reflective tariff.
In reaction to the speech, the audience was perturbed by the fact that Nigeria with an external reserve of over 30 billion USD is seeking a loan of 2.7 billion USD from the World Bank group. Engineer Idowu Oyebanjo recommended that investment should be made in the distribution networks while regional power grids should be established for significant penetration of embedded generation in every part of the country as soon as possible. He further recommended that for the PSRP and ERGP to succeed, there is an urgent need to put in place a Power System Architect, a multi-disciplinary team of technocrats from diverse fields to coordinate the implementation of the program.
Everyone agreed that the time to act is now.
Keynote Address 2
A critical review of Nigerian Power Sector’s Legal/Regulatory Framework – Areas for Legislative Intervention
For the first time, the Nigerian National Assembly co-located the Future Energy Nigeria event to focus on the broad energy portfolio by bringing the entire value chain together for frank and honest discussions on strategies for overcoming funding challenges, capacity building and knowledge sharing between IOCs and Independent participants in the oil, gas, and power industry in Nigeria.
Senator Enyinnaya Abaribe, a passionate, prolific and unassuming distinguished Senator and chairman, Senate Committee on Power, hits the nail on the head, quoting from the holy books saying: “For all have sinned and have fallen short of the glory of God”. He said we must avoid the blame game we have witnessed in the last few years and move towards resolving issues and implementing solutions. In his characteristic manner, he summarized, quite quintessentially, the challenges of the power sector, the solutions as well as made the promise that Nigerians will get the support of the Legislative chamber. He opined that the robustness of the discussions during the FEN 2017 conference means that a public enquiry on Legislative interventions in the power sector should involve all stakeholders from the FEN 2017 conference among others.
To have the chairmen of the committees on power from the Senate and House of Representatives, His Excellency Senator Enyinnaya Abaribe and Honorable (Chief) Daniel Asuquo at the event proves that the Law makers in the country are aware of the problems in the power sector and are willing to tackle them head-on. Senator Enyinnaya Abaribe reiterated the relationship between the GDP of a nation and the quantum of electricity supply. He asked the question: What is the most efficient way to produce and let Nigerians have safe, secure, reliable and sufficient power? Engineer Idowu Oyebanjo responded that the creation of regional grids with the transmission network left in position for interconnectivity and economic transfer of electricity where possible is the veritable means to achieve the required progress in NESI. On the subject of RE, he maintained that all energy sources will be included in the future energy scenario for NESI. A separate legislation on RE is already before the National Assembly and a public enquiry about it should be expected pretty soon.
The Lawmakers promised that the inputs arising from the deliberations from this conference will be used to engage appropriate arms of the government.
Unbundling of the Transmission Company of Nigeria (TCN)
A search beam into the activities and role of TCN as the weakest link of the NESI brought the need for improved operational efficiency. Some stakeholders believe that with TCN remaining in the hands of the government with other segments of the NESI in private hands, full privatization or concessioning of the transmission network is inevitable as we move along towards the full liberalization of the Nigerian electricity market. The idea of concessioning the transmission network was deemed inappropriate in the short-to-medium term but can be considered in the medium-to-long term planning of the development of the power sector reform program.
Everyone agreed with Engineer Idowu Oyebanjo that a regional grid system with the transmission network used as and when required (for example as an interconnector) is the surest way to realize the immediate objectives of both the PSRP and ERGP. Continuing with investment in the transmission network will have a limited impact compared to using same funds to strengthen the distribution networks.
…….to be continued
Engineer Idowu Oyebanjo MNSE CEng MIET UK
