Madness, Power & Fashola's Dilemna/

Madness can simply be defined as doing the same thing and expecting a different result. In the case of Nigeria, this cannot be farther than what we've been doing with Power policies since 1960 and the depressing level of darkness that have defied all solutions despite good intentions since 1999. The power problem that defeated Uncle Bola Ige of blessed memory is now humbling no mean human in Governor Fashola, and for very good reasons.

Celebrating a recent success in connecting the Ikot-Ekpene/Alaoji leg of the transmission grid, the Minister took the opportunity to celebrate his feat and derided the proponents of distributed level power whom he labeled “naysayers”. Unfortunately for the Minister, the ink on his speech was yet to dry before the grid generation collapsed to 3000 MW from 4500 MW despite his promise of additional 300 MW after months and billions of naira spent to finish the work on that critical leg of our epileptic grid.

Unfortunately it is this author’s professional opinion that this preferred grid centric model continues the technically and economically inept philosophy of Nigeria’s erstwhile governments to emphasize grid level power generation & evacuation , instead of the distributed level power generation and supply that is more in tune with our current needs at major urban centers.

Mr Fashola’s Incremental Power Policy 

Let me be clear that in by itself, the current policy of the Minister of incremental power is not a bad idea. After all, who would be against the completion of projects into which billions of national dollars has already been sunk? Unfortunately, if sunk costs were the only legs this policy rests, it is a poorly constructed one as policies should never be built on the mistakes of the past.

For those who do not know, the idea behind Mr. Fashola’s incremental power policy is to complete the legacy NIPP projects in both generation and transmission largely abandoned by the previous administrations and largely hampered by human factors, funding issues and lack of political will. His idea is that if we close out on these projects in the next three years, we can add 5000 MW of grid power to achieve a 10,000 MW goal. In addition and to his credit he has also promoted diversifying the sources of this grid power including signing off on 14 Solar based PPAs with more to come.

Incremental vs Monumental Power

Certainly, if Nigeria’s power needs were incremental, then Mr. Fashola’s policy makes sense. Unfortunately our needs are monumental not incremental. Monumental needs require radical rethinking not incremental changes around the boundaries. Moreover in the age where governance has been commoditized, there is need for institutional thinkers to “Trump Proof” governance. It is Mr. Fashola today, it might be a low energy Minister tomorrow who lacks the mental or physical capacity to solve problems. The right policy position is one that anticipates that likelihood.

If Nigeria must produce the monumental 35,000 MW she needs in the next 4 years to rapidly industrialize and produce jobs to its teeming unemployed youths then distributed power that relies on diversified sources of power especially solar and wind, and demphasizes the grid is the way to go.

Why Distributed Level Power is Superior to Grid Level Power in 2016 Nigeria

The reasons are straightforward including:

It is immoral to waste what we already don’t have enough of. Even at its best, a transmission grid loses 9%. That waste due to transmission is as high as 30% at times. Power can simply be generated next to the demand centers and injected directly into the distribution system. The distributed system can then be connected once the nation achieves some level of power supply parity.

2. Power is largely needed in about 15 urban centers in Nigeria, with each having some specific power generation advantage. Abuja is close to several Hydro as is Zaria. Kano is a potential fertile hotbed for solar energy as is Kaduna. Lagos have gas to power as well as ocean wind advantages that can be easily harnessed. Aba, Nnewi, Benin and Onitsha Ade next to major gas fields. Why send the power to the grid and make them vulnerable to saboteurs ? If the gas of Warri is powering Warri and throws its residents into darkness when breached the incentive for Warri based militants to damage pipelines disappears.

3. Current model discourages private investment in the power sector. I don’t know many businessmen that will invest in producing something when they don’t have visibility to the ultimate user and customer. The power sector in Nigeria today have that unique complication with a series of agencies all heavily indebted like TCN, NEBT Plc and DisCos in between the juice producer (GenCo) and the customer. We must un-complicate this system by tearing the playbook and requiring distributed level power that pioneered by Aba IPP and which is still being prevented from taking off by selfish interests.

4. Incremental power cannot industrialize a nation. Our biggest problem is not that we have 4000 MW cap on generation as it seems but that most of our demand centers in Lagos or Nnewi cannot plan for 10 hours or 16 hours or 20 hours of constant power to drive production. Hence we must send power to where it is needed, city by city basis and seek to increase availability at that micro level instead of pursuing phantom grid level transmission of paltry power.

5. It makes no sense why investment by state actors in partnership with the central government would be discouraged when all hands should be on deck. The current situation where States are disallowed from providing power to their citizens yet are supposedly responsible first for their economies and security stands reason and federalism on its head. If any Minister should know, it should be Hon Mr Fashola given his struggle against federal hegemony in Lagos.

After all if the economy of Ekiti booms because it gets eight hours instead of the one hour average it currently receives because its state invests and distributes power, then Ekiti would be less dependent on Federal allocations and Nigeria wins.

6. As a policy maker, one recognizes that policy making is about trade offs. Monetary wise, it costs 2–3 times in additional amount to connect power to the grid as it costs to produce. The grid today covers only 40% of Nigeria. Hence, simply focusing on grid power is an expensive proposition, that yields very little. If the argument is to complete existing project, that is understandable. But to promote grid level generation in the face of the reality of a rickety grid that evacuates nothing but darkness and scarcity is unrealistic. I

7. Any grid is as strong as its weakest link. This is true for any network based system. Hence building new legs in an old rickety network is useless as the new leg will actually cause system failure. Imagine it like a network of old pipes and suddenly you add a big new pump and pipe. Well the entire old pipe networked to it will soon begin to burst and fail incessantly. It is not rocket science, it is far more expensive to rebuild and protect our often vandalized and poorly maintained electric grid. No amount of ministerial plea can fix that.

Ultimately the fundamental question on why you need a transmission grid need to be answered by the Minister despite his obvious professional handicap. Transmission grids are not just fanciful pieces of engineering works. They exist where cheap power is produced from distant places and need to be transmitted to. demand centers. In the case of Nigeria, this would be massive hydro projects but definitely not applicable to solar which is available everywhere and to gas, which is not cheap due to the cost of militancy and age-long political risks where it is found.

Another reason why countries tie up their generation centers into a grid is to improve reliability and allow power move around. in case temporary shut downs are required in key demand centers. In our own instance, we have no such issue. Our demand centers scarcely produce and can’t even share, yet we force Egbin to transmit power to the centralized grid when it seats right next to a demand area (Lagos) that needs 15 times what it can produce at best.

If these two reasons why we have grids are non-existent in Nigeria, do we need to hang our hope on this grid concept?

It would also make sense if the idea of distributed power were an exclusive choice decision. In this case, it is not. We can connect the distributed power centers we build in the next four years on the road to 40,000 MW after the entire country achieve power adequacy parity.

In Conclusion

In the mean time, lets unleash our economy and liberate our power clusters by deleting power from the federal exclusive list, removing NERC’s regulatory limit on embedded power and distribution in the key fifteen urban centers and force a consolidation of the mad DisCo/GenCo dichotomy that is chasing away investors. To even accelerate things, a template for Power Purchase Agreements should be posted online and that function should be merged into NERC. Forget capitalization of NeBT which we obviously can’t afford, instead enforce metering and make customers pay for the power they take from consolidated DisCo/GenCo that will see end to end.


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