Upon assuming office, both the Honourable Minister of Power, Engineer Mamman Saleh, and The Honourable Minister of State (Power), Dr Goddy Jedy Agba, declared that the Ministry of Power, under their stewardship, is determined to put square pegs in square holes. This is a brilliant step in the right direction towards developing a functional and efficient power sector in Nigeria.
Our value system is the bane of our development. To succeed, we need to have the right leadership with the right mindset to set the right priorities by entrenching a people-centric agenda for the power sector. We also have to eschew selfishness, greed and corruption in the electricity value chain for us to have meaningful development and progress in the sector. To have an efficient power sector, meritocracy has to be celebrated over mediocrity and subject matter experts have to take the lead in relevant power sector agencies and the entire electricity value chain.
An important area to focus on is the issue of corporate governance in the NESI.
Nigerian Lawyers and Accountants are some of the most brilliant in their professions but their incursion into the Nigerian Electricity Supply Industry (NESI) has led to more harm than good in many areas.
When the idea of privatisation was been mused around the year 2000, the Federal Government (FG) did not take on board the inputs of seasoned power engineers but instead, pitched tent with Lawyers and other non-professionals. Thus, the basis for privatisation, the electric power sector reform act (EPSRA) 2005, was written as a theoretical document seen through the prism of legal practice. Thus, some of the concepts therein, though correct, cannot be implemented based on the physics of electricity. As a power engineer, I will recommend a review of the EPSRA document to reflect the technical, legal, commercial, and operational realities of the NESI today.
Regarding the “incursion of Lawyers, Economists and Accountants into the Nigerian Power System” two examples readily come to mind.
Some of the greatest bottlenecks that exist today in the power sector were caused by those Lawyers who saw a power purchase agreement (PPA) in power systems as a superficial and theoretical concept. PPA is quite straightforward in legal, economic and commercial terms. However, if the gas supplier sells gas to the GenCos who cannot evacuate power due to constraints in power networks, the PPA is no more worthy than the piece of paper on which it was written. A sound Power Engineer will never underwrite that kind of market.
Another one is the assumption of network losses in the NESI without accurate data relating to transformers, lines, cables etc.
If Proper Engineers were in charge of NERC as of the time, thhey would have put a stop to the assumption which the DisCos can claim forever now that it misled them and Nigeria can pay alot for that singular act if we have not already paid alot through “estimated darkness”.
To correct matters, it has to be understood that in terms of electricity access and the status of the power system, Nigeria is at the 1920 UK or USA level. Therefore, it is imperative to ensure that all relevant power sector agencies and operators are led by seasoned power engineers and not people who lay claim to it without demonstrable experience.
Arguably, in a well established power business, the Managing Director (MD) is a strategic planner and can be from any background. For business development, money is important and so the knowledge of finance & law is critical. He or she must know how to raise money, interface with regulators, and manage industrial conflicts among other functions. The chief technical officer (CTO) or Technical Manager must however be a strategic operations personnel that is well versed in the rudiments of power systems for the business to succeed. Clearly, a multi-disciplinary team of technocrats from different fields will be required to have a successful and sustainable power business. However, in the Nigerian situation where generation hovers around 4000MW for a population of over 200 million due to various constraints, power system engineers with verifiable proof of experience should be in the forefront of governance in the NESI. If you have little or no supply and your power system is in the status of Nigeria today, you need technical gurus to be in charge for at least five decades until such a time when you have uninterrupted power supply and constant electricity supply of the appropriate quality can be taken for granted. When you have uninterrupted power supply like it is the case in the UK or USA, any Dick and Harry can lead the power business. When a power system is on “auto-pilot”, you can put Lawyers, Accountants and Economists in charge to see how to reduce costs and get economic advantages where possible. You only need financial experts, economists, accountants, lawyers etc in the power sector to the extent that their knowledge can handle. You cannot put them in charge of power systems that is in the status of the Nigerian power sector. Nigeria needs what we will call a power system architect comprising of a team of multidisciplinary technocrats from various fields to detangle and provide solutions to the multi-faceted problems bedevilling the power sector. When the multidisciplinary team is set up, power engineers should take the lead.
In addressing the corporate governance issues in the power sector, the composition of the Board members of TCN and DisCos should be based on merit and must reflect the stakeholdership of government. Also, the Nigerian Electricity Regulatory Commission (NERC) should collect the CVs of the current Management and leadership teams of all operators (TCN and DisCos) in the NESI and ensure that the MDs, chief technical officers, and technical consultants have demonstrable experience of power systems. This has many advantages. Sometimes you have Lawyers and Accountants in charge of procurement of engineering materials and you want to take a technically sound decision but it is difficult. To be sure, good technical knowledge alone is not sufficient to become a good administrator; a combination of management and technical skills is needed. Power Engineers should therefore be enrolled for leadership and management courses such as MBA, Business Law & Management, Accounting, Finance, Economic Regulation of power systems, etc going forward. It is cheaper to put a seasoned power engineer in the right position of Managing a power business than to put a novice. If you put a square peg in a round hole, you will spend exhorbitantly to employ consultants to help them. Most DisCos pay heavily in Dollars for this. With a bit of training in management, a power engineer will fulfill the role more effectively.
NERC, as presently constituted, has a right balance of power engineers and other professionals in the commission with the chairman, vice chairman and commissioner for engineering, performance & monitoring being established power system technocrats. This format has to be maintained for at least five decades for us to have a sustained development in the NESI.
Another area that will enhance efficiency in the power sector is metering of consumers. This will ensure transparency and reduce non-technical losses on the network. It will help with the liquidity crisis and increase consumer confidence in the power sector reform. Estimated billing can then be banished forever. The issue with Metering is that the DisCos have no financial capacity to provide meters and are preventing others from independently doing so. Therefore, FG needs to step in, provide meters for all consumers in the NESI and insist that electricity bills be paid directly to an escrow account visible to all stakeholders.
Technical & Operational Efficiency
As a result of the huge gap in the skills set of staff of the electricity supply Industry, there is overwhelming evidence that significant improvements will take place if technical knowhow is enhanced in the NESI. The Engineers and technicians working in the NESI need to be appreciated and praised for performing brilliantly under the conditions they found themselves. They work without necessary tools and equipment; try to do things properly based on sound engineering principles, but are forced to be reactive rather than proactive by their non-professional managers.
If technical knowhow improves, significant improvements in the quality and quantity of electricity supply will be realised even with the present level of available generation capacity. Some of the key areas requiring immediate attention are highlighted below:
Improvements in Network Protection
To have a reliable power system, a well graded and coordinated protection system is key.
Transformers trip in Nigeria anyhow because of lack of coordinated protection settings. The power network has no protection coordination as TCN refuses to give settings to DisCos and even set protection relays to control load which is a misnomer.
This is the main reason why we lose power supply for no reason
We have a power network with inadequate protection settings. Fuses or even ordinary wires are used to protect expensive power assets. Where available, protection relays are wrongly set so that they never operate when required. More often than not, they trip the circuits out with little or no system perturbations.
When we have small system disturbances, our light flickers and goes off immediately as the settings are too light
Every time you change a transformer or feeder, you have to carry out protection settings studies and do a proper protection coordination with upstream and downstream devices. Failure to do so, you have 33kV transmission circuit breakers tripping for faults on the DisCos’ network.
For example, if TCN replaces a 150 MVA transformer with a new one of 300MVA capacity, the existing protection system has to be recalibrated to take account of the full load capacity of the new transformer. If this is not done, the new transformer will be tripping on load from time to time and Nigerians will be switched off power supply for no just reason. All we will hear is that there is a fault and no one will ask questions whether it has tripped on load or as a result of short-circuit.
The greatest threat to the sustainable development of the NESI is the lack of knowledge of power systems. Significant investment in training and human capacity development will be required going forward.
TCN claims to be the super power and blame the woes of the power sector on the DisCos. Operators trade blames, passing the buck. There are interface issues and load rejection due to lack of coordinated planning and development of network infrastructure. DisCos claim TCN is not providing them electricity where they need them. TCN even refused DisCos from using autoreclosers because to them, “it causes faults.”- it does not!!!
You may find it incredulous to know how many things we have to correct but the best way to do it is for us to start correcting these things now.
There is definitely a huge deficiency in technical knowhow and corporate governance in the NESI.
Since the electricity business is a regulated private monopoly, what we should be asking for is quality and transparent corporate governance and a regulatory regime where the private sector is incentivized to perform without taking an undue advantage of the natural monopoly. The regulator needs to be truly independent, impartial and not overwhelmed by the enormity of the problems.
System Planning
To have an efficient power sector, network planning studies based on accurate models of the power network have to be the norm. This will help to avoid a situation where TCN is installing Transformers in areas where there is no load. They claim to be investing in power system; a sheer waste of money. If a tenth of the money spent so far on Transmission System is spent on our distribution network, we will enjoy a leap in the quantum of electricity supply in the NESI.
To invest X amount in buying a power transformer, you need to do load studies to prove there is need for that investment. Why will you invest in 60MVA transformers all over places where we scarcely have demand?
All DisCos use 1MW = 60 Amps at 11kV without knowing why someone made that mistake in the past. TCN uses the equivalent of 20 Amps at 33kV. They do not understand the meaning of power factor and they all blankety use a power factor of 0.8 even in places where the power factor are over 0.95. The Implication is that Nigeria is experiencing loss of power for no just reason. Also, by operating the network in this way, they under-utilise the assets and so make customers pay more for the investment and get less out of it.
In short, the idea that they get only 12MW out of a typical 15MVA injection substation transformer means Nigerians are being short-changed.
In addition, they have short-changed themselves too for a long time. They could have made more money. Let no one say it is a strategy for saving the assets because this is a gross under utilisation of asset although a percentage extension of asset life ensues as a result of this operational methodology. The lack of knowledge of power systems make them to do it the way they met it and never bothered to ask why.
Some of the Injection Substations have as low as 4MW loading. They don’t use the principles of diversity factor to optimise the operation. They just switch off supplies when the feeder load reaches their set maximum, say, 5MW.
If the CTOs and MDs don’t know the subject matter, they cannot analyse the problem, and are thus unable to change the operational methods wo as to be able to get more money out for the company
The transformer you have there is a complex beast. To understand the nitty gritty of its operation , control and protection requires in depth knowledge more than can be obtained from a degree in Law or Accounting.
There is even a higher risk if both the MD and CTO are non-professionals. If the MD is from a background different from power systems, how will he or she understand that it is not right to use protection relays to open feeder circuit breakers? How will such an MD know that the frequent operation of the circuit breakers (CBs) to switch supply off is more expensive than the revenue anticipated from the customers.
NERC should use this knowledge to improve regulatory asset base because these guys unknowingly are not getting more out of the transformers which we are paying for as consumers. Thankfully, NERC has instructed that they install systems that make available the instantaneous load values from 11kV circuit breakers in a transparent manner. This is how it will become clear that consumers should have been having more supply than we experience now, even at no additional expense to the DisCos.
Such is what you get when you have technically sound persons in charge.
Though we need sound Lawyers, Accountants and Economists in the team, they should not lead power systems. They don’t even understand what reactive power flow means, what it can do to the system, and why there is need to correct for power factor. How then will they take the right investment decisions?
Procurement
It has been highlighted that procurement activities in the power sector should be treated differently from how it is typically done in supply chain management. This is because of the technical understanding required in procuring a power network asset. There have been instances where technical proposals and justification for the purchase of power equipment that have been submitted to non-technical officers in the procurement department were turned down.
For example, an Accountant may look at the purchase of a transformer from the prism of cost. That is if he knows what he wants to buy and why it is required. If a person doesn’t know why something is important, they will even shoot it down and not buy it.
If he does not know the implication of a low-loss transformer on his long-term financial investment, and the CTO can’t help because he has no knowledge of power system, he will buy a cheaper transformer because it can do the job. Alas, the cost of losses is huge and it could have paid better to buy a more expensive low-loss transformer because when armotised appropriately, it pays to do so.
We have overwhelming aspects of a technically intensive subject like power systems requiring that all leaders of the value chain must be power engineers for now.
The present operators in the NESI successfully bought the assets because those who mediated the Privatization process short-changed Nigeria with impunity.
No aspect of the Nigerian history will underscore the futility of celebrating mediocrity over merit than the outcome of the privatization exercise in the power sector.
It is high time we developed an efficient power sector because the industrialization of Nigeria depends on the success of the NESI.
Idowu Oyebanjo is a UK trained power system engineer and the technical secretary for the Procurement and projects think-tank of Nigeria.
