Six Months have passed in 2017 and we’ve decided to take a critical look at the power sector. There’s been a whole lot of activities in the Nigerian power sector and a year that seemingly began with so much promise has slowly fallen into the usual trappings we all know too well. However, it isn’t all gloom and we’ll be looking at both the Negatives and also the few bright spots that occurred in the Nigerian power sector & Energy industry from January 2017 to June 2017.
First off, January 1st kicked off with Sparkonline.com.ng exclusively breaking the news on the electricity tariff hike across the Nation. DisCos had apparently refused to make an official announcement over the issue at the time, due to concerns of NERC’s disapproval. Regardless of a lot of cries and displeasures from electricity consumers, the tariff hike took immediate effect and even though the hike in tariff was not particularly large for DisCos such as EKO and IKEJA, the same could not be said about PHED customers. This, however, was not the fault of the DisCos. A tariff change had to occur as the MYTO scheme which governed the tariff system was failing and most DisCos had to review their operating costs in light of changing market prices in Gas as well as other acquired costs. Arguably, the biggest policy change over the last six months is the new policy allowing a sect of customers to buy power directly from the GENCOS. This caused widespread panic across the power sector and various DisCos have ben forced to review their business models because of this decision. While it is still a bit unclear how this would play out, it is certainly interesting to see how DisCos react to this policy.
Lawmakers have also finally reviewed the laws governing gas flaring. Gas flaring has been one of the mundane activities which have constantly held back the power sector and now lawmakers are finally seeing why a law allowing flaring gas to be cheaper that harnessing, makes little sense. As regard policies in the last 6 months, NERC also chipped in with one of theirs. One that caused quite a stir and lots of confusion as they instructed customers (Maximum demand customers) not to pay their bills till they were metered. While the intention behind this decree was noble, the execution left little to be desired.
Overall, it feels like these policies are small steps in the right direction. However, these sort of policies are few and far between and a lot of times these policies are not backed up with the kind of structure or strategy that allow these new policies take effect. Lawmakers need to understand that it isn’t good enough to make a decree, it should be accompanied with an actual framework that allows these new laws to exist effectively. Invariably, the fate of the Nigerian power sector will be determined by those making the policies governing it.
Read More: Lawmakers Set To Review Gas Flaring Laws
At the tail end of the first quarter of the year, we had a massive game changer in the Nigerian power scene as MTN and Lumos launched its Mobile electricity service. The service which is still in its early days certainly has the potential to deliver sustainable & reliable energy for small scale businesses and homes across rural areas in the country. We also got to see Unilorin students invent a device to detect electricity theft and got to interview the inventor of the Hydroelectric generator. Even Nigerians abroad appears to be breaking boundaries with Jessica Mathews earning lots of acclaim in the United States for her SOCCKET ball invention.
Also, during the first quarter of the year, the minister of power, as well as the Federal Government, endorsed various renewable energy projects in the Northern part of the country, many of which are yet still in the development phase. With countries like Egypt and South Africa leaps and bounds ahead of Nigeria in renewable energy infrastructure, 2017 seemed like the year Nigeria would finally harness its renewable energy potential.
In all fairness it hasn’t been a remarkable year as regards innovations in the Nigerian power sector, with countries such as China Launching Solar farms over water and Elon Musk using his power pack system to power kauai Islands, we can only watch with envious eyes. The early foundations are however being laid and it’s only a matter of time before something truly groundbreaking is invented in the Nigerian energy scene. We will be keeping a keen eye on the MTN & Lumos’ Y’ello Box though. With the right marketing and infrastructure, the Y’ello Box might just be the perfect alternative to power we’ve been looking for.
While most DisCos continued to improve their services, Ikeja electric was arguably the most pro-active of all DisCos. IE continues to leverage off it’s tech infrastructure to push further its value proposition. This year we even saw the utility company launch an online payment platform for electricity services asides bill payment. Now users under iE can pay reconnection fees from the comfort of their homes. The very controversial issue of vandalism in Igando was a rather inconsequential issue in what has largely been a good year so far for IKEDC.
The same cannot be said of BEDC, the DisCo got into serious hot water early in the year after Spark covered an exclusive expose of Ibusa community in Delta state. The community which had experienced 7 year power outage made headlines as BEDC service delivery was called into question. This was just one of the communities which have since come out to decry BEDC services, with Ondo South local government the most recent community petitioning the utility company. From a PR stand point it has been a year to forget for BEDC.
EEDC didn’t fair much better as news of electrocuted staff were sandwiched between recurring stories of protest by both workers and electricity consumers in Enugu.
Kaduna electric continued to push boundaries and is still considered the most impressive DisCo when it comes to community service, as the company just recently gave out classroom furniture to schools in Kaduna. This sort of philanthropy has promoted a rather cordial relationship between Kaduna Electric and its customers and Kaduna electric is still often considered the most Likeable of all DisCos In Nigeria.
Eko DisCo which largely operates in the Urban areas of Lagos have impressed market operators with their collections but not necessarily their services as power supply in its franchise areas is still somewhat surprisingly inconsistent. Power supply doesn’t solely rest on the DisCos though and Eko has proven time and time again that it’s willing to improve its services and make bold claims to its customers, something that has endeared them to some of the customers. Eko DisCo also ranks number one when it comes to metering.
IBEDC has had a rather quiet year and only made headlines when they posted an hilarious picture on Facebook of what their customers do to avoid paying bills. IBEDC spokesman also chipped in on the debacle of TCN’s incapacity, pointing accusatory fingers at the transmission company’s poor network. IBEDC weren’t the only ones pointing fingers at TCN, more on that later.
PHED had a rather average 6 months as power supply slowly improved in its service areas. The company also hosted a lot of engagements which were aimed at educating its consumers on their rights as consumers and the power sector value chain. The company is still notoriously known for overbilling customers and PHED tariff don’t help as R2 customers are forced to pay 32 naira per KWh which is more than most DisCos. This has been a constant complaint of PHED customers and PHED often seeks to clear the air (much to no avail) on its ever present social media channels. It is noteworthy that PHED is the most active Distribution company on Facebook. Inside sources suggest that the company is set to roll out thousands of meters in the coming weeks, if this is true, we can hope that PHED might be able to finally free its customers from overestimated billing.
KEDCO continues to impress us with its sleek and stylish website but nothing else, while AEDC and Dino Maleye made the News for the wrong reasons as the Minister joined the list of people who have accused AEDC of overestimated billing.
Other Discos such as YEDC, JEDC had a rather quiet 6 months and that is not exactly a good thing.
Distribution companies are in the business of making a profit and if recent reports are to be believed, that has been really difficult for DisCos. it’s been tough for most DisCos and most have simply struggled to remain afloat. As far as service delivery, the DisCos Still have a long way to go before they can truly shake off the NEPA tag. However, with DisCos such as Eko Disco, Kaduna Electric and particularly Ikeja Electric, we believe these DisCos are certainly on the right track, with other DisCos such as PHED, IBEDC and KEDCO not far behind. Communication has largely improved between DisCos and its customers but clearly, more work still needs to be done.
It is difficult to talk about power supply as the supply of power and access to electricity is often relative to location, hence there is no universal assessment of Nigeria’s power supply that can be 100% accurate. However, we know that we witnessed several national grid failures which crippled power supply for the most parts of January and February. The unfortunate event of fire outbreak at Afam IV power station and Jebba also contributed to the poor power supply during this period. Recurrent and sometimes incessant grid failures have occurred intermittently since, and power generation has barely reached 5,000 MW since the turn of the year. TCN has often been blamed by several people in the power sector for the poor power supply. While it’s still somewhat unclear why power supply is so haphazard in the country, it is safe to assume that our power generation output is greatly beneath the expected demand.
Improved power supply still feels like an afterthought for most stakeholders in the power sector and the conversations surrounding the power sector are often themed around metering (or the lack of it) collections and big money loans. 6 months into 2017 and Nigeria isn’t any closer to achieving any its power goals. At this rate, we have to start to consider that just maybe the privatization of the power sector might have been a mistake after all.