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Chinedu Ekeke: This Darkness We Are Shiaring; But Isn’t It Time To Discuss Gas?

Last week, I paid my electricity bill. And it was N500 less than my usual monthly average. Last month, I also paid N500
less. I didn’t take the first drop seriously. It wasn’t until the last one that I started to imagine a future in Nigeria where electricity bill will not perpetually remain steep.
But that was just me and the rest of Lagos residents serviced by the Ikeja Power Distribution company (IKEDC). Two months ago, the Nigerian Electricity Regulatory Commission, NERC, announced changes in tariff for electricity consumption. And the commission observed that some consumers in certain parts of the country would not be amongst those whose bills will increase. NERC’s chairman specifically mentioned Ikeja Distribution Company as one of such DISCOs whose consumers will be paying less, instead of more, as a result of the review. But some consumers, in some other parts of the country, will pay more.

It was gladdening to note the reduction in price, but that does not soften the pains of the increased darkness we are served daily. My friend Muyiwa is in the hospitality business, and practically goes dancing each time he sights electricity in his bar; yet the light hardly lasts beyond a couple of hours in a whole day. Of course there are days that the light never comes at all.
Nigeria is enveloped in darkness, and there’s no amount of positive thinking or positive talking that can change this. Before we’ll see any marked improvement in electricity supply, there first has to be a corresponding improvement in its production and distribution.
I have somehow sunk into despair since I digested the issues: a nation of 170 million citizens can only generate and distribute 4500 megawatts of electricity. This, in itself, will not make much sense until juxtaposed against the wattage generated and distributed in other climes. Brazil, for instance, with a population of 202 million, generates 160,000 (YES! One hundred and sixty thousand) megawatts. Award winning journalist Tolu Ogunlesi was in Brazil in April and his report on that visit drove home some truth – that the 160,000 megawatts generated in Brazil is not just stories we read in tabloids. That massive power generation is real in a country lumped alongside Nigeria as third world. Tolu revealed that the country wasn’t even satisfied with their current volume. They want to increase it by at least 6000 additional megawatts every year. 6000 megawatts is above what Nigeria has been able to generate and distribute to her citizens after 54 years of independence.
Nearer home here is South Africa which generates 40,000 (Forty thousand) megawatts with a population less than one-third of Nigeria’s. It was this fact, and many others like evident superior roads infrastructure that made pessimists dismiss Nigeria’s current GDP rebasing which shot us up as Africa’s biggest economy, and the world’s 26th, as a mere joke.
Here’s the magnitude of Nigeria’s electricity woes: from what we generate, the average Nigerian receives about 27 watts of electricity, as compared to the average South African who receives about 770 watts or the Brazilian who receives about 792 watts. Last year, in a Nigerian Gas Association business forum, Mr Mark R. Ward said the average American receives about 3,180 watts of electricity. Mark was a former managing director for ExxonMobil Upstream Companies in Nigeria and former chairman Oil Producers Trade Section, OPTS, an 18-member advocacy group made up of both indigenous and foreign operators in the Nigerian petroleum industry.
It means that the light the average Nigerian gets from NEPA or PHCN or DISCO/GENCO is not enough to light up a 40 watt electric. This explains why every street in any Nigerian town is a warren of whirring generators, buzzing with deafening sounds and stuffing the air with fumes. Public-owned power supply almost non-existent. If we understand the danger this reality poses, this will give us hours of sleepless nights.
The current cloud of darkness is troubling, because this is the rainy season when, usually in Nigeria, the dams are full and electricity supply generally improves. In the past, power supply came more often between May and August. That businesses and households are thrown into darkness in July, just months after hand-over of PHCN to private investors, should raise questions.
Where are these investors? How much investments have they made so far? How much more funds do they have to put in before there’ll be improvement? What is lulling their activities?
The Ecobank Middle Africa Market Report Update published April this year gives certain insights into what the issues are. The report states: “Despite the conclusion of the first phase of the power sector privatization in Nigeria, power supply from the national grid is yet to improve. Power supply has actually reduced from the peak of 4517MW recorded in December 2012 to 2670MW in April 2014. The decline has been largely attributable to vandalism of gas pipelines, leading to disrupted gas supply to power plants. Gas producers have also complained about low gas prices, which barely cover the cost of extracting the gas. Other operational challenges not anticipated by the new owners have also kept the power plants operating below capacity. However, the situation is unlikely to improve significantly in 2014 as issues around oil theft continue to force gas companies to shut down operations after costly attacks on oil and gas pipelines. As most of Nigeria’s gas is associated, shutting down oil fields also shuts down gas production. Furthermore, attacks on gas pipelines, which had been a rarity, are increasing despite the absence of any apparent gains for vandals.”

While reviewing performance for the first quarter of 2014 which ended March 31st, NERC stated that their projected generation was 9061MW, and that this figure was actually their worst case scenario, meaning that generation even had the capacity, had everything worked out good, to exceed this expectation.

But even this worst case scenario couldn’t be attained. The quarter was closed with barely 4306MW. The shortage in generation was blamed on the non-availability of gas. This corroborated the Ecobank research report.

In the light of the importance of gas in our major system of electricity generation, one is left wondering why gas regulation was not included as part of NERC’s brief, since we claim we are serious about electricity. NERC is mandated to carry out the monitoring and regulation of the electricity industry, but a core driver of the availability of the electricity we want to regulate is outside of NERC’s scope of operation.
So we have a regulator who cannot boldly tell you: hold us responsible if we make you pay more for less power usage.

The best NERC can tell us is,

“Sorry, gentlemen, we planned to generate 10,000 MW, but due to non-availability of gas, we could only generate 3000 MW. And you see, we don’t know anything about how this gas business is run.”

It is doubtful that an institution as big as the Nigerian government will push for a electricity regulatory laws aimed at clearing the way for private sector participation in generation and distribution, without first seeking to find out what obtains in other countries where similar laws have long been operative. For instance, in the UK, the Office of Gas and Electricity Markets (Ofgem) performs the exact function that NERC performs in Nigeria, but Ofgem also regulates gas. Ofgem’s powers and duties are statutory, just like NERC’s, except that NERC is not allowed to touch issues about gas.

The 2013 Power Sector Road Map which I read did not highlight the danger of gas shortage the way I heard it from the mouth of the NERC chairman. And the complaint was coming after the country was long done with the handover of power infrastructure to their new owners. It was evident that NERC, within the period that private owners started operating till now, has seen things that were not quite clear ab initio. If the commission had been in charge of gas regulation, that experience would have translated to reassessment of the gas masterplan and how to make it service the power companies better.
Now it’s looking like the commission’s hands are tied. It seems the much they can do is to go lobbying and pleading with the government agency or unit responsible for gas management and regulation.

But we really can’t go any distance in our search for energy generation without answering the gas question. How much investment have we made in the industry? What about this lingering question of pricing? How about transparency in its management?
We must begin now to have a conversation around gas. Its management and regulation should be yanked off NNPC and DPR. We know oil is the cash account of too many vested interests in and around government, but let them concentrate on their oil – since we have refused to face the challenge of fighting greed and roguery in the industry – while we pull gas away from them and structure its management to help Nigeria generate electricity and drive industrialization.
I was on TVC on Friday to discuss Africa’s huge population and its implications for the continent’s future. I narrowed it down to Nigeria, and quickly said Nigeria has an immediate need to convert our huge population to a productive entrepreneurial force or face the flip side: which is that our darkness and unproductivity will convert our huge population to a burden to ourselves, the rest of Africa and the entire world.
But then, in a country where being in power is an end in itself, I doubt anybody is listening.

Chinedu can be followed for more direct engagement on Twitter as @Nedunaija

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