Africa Energy Nigeria Energy – #lightupnigeria Money Down The Drain

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Source: Next, By Idris Akinbajo, January – 15 – 2010

After spending over N95billion on capital projects in the power sector in 2009 coupled with President Umar Yar’Adua’s pledge of increasing power generation to 6,000MW by December 31, it is unfathomable that the actual energy generated by power stations owned by the Power Holding Company of Nigeria (PHCN) between January and December last year only increased by 29MWH/H.

Interestingly, the unit – mega watts hour/hour – is the universally acknowledged measurement for actual power generation, while generation capacity is measured in mega watts. An energy expert said that the confusion is caused by the government, which does not differentiate both units.

Based on the “Daily Operational Reports” produced by the National Control Centre (NCC) of PHCN in Osogbo, the Osun state capital, obtained exclusively by NEXT,

it was not only in actual power generated that the PHCN stations have underperformed; the power generation capacity of the PHCN stations also increased by 150MW. This is in sharp contrast to independent power plants whose power generation capacity increased by 345MW in the same period.

The reports, it was gathered, were given to Lanre Babalola, the Power Minister on December 29, 2009.

Generation Capability In the report, the NCC revealed that total generation capacity increased from an average of 4,464MW in January 2009 to 4,959MW in December 2009. The increase was largely due to a 300MW increase in generation capacity of Afam VI, an independent power plant run by Shell Peteroluem Development Company. That of the 11 power stations owned and managed by the PHCN under the supervision of Mr.

Babalola as minister, increased from an average of 3,695 in January to 3,845 in December.

The four independent gas powered plants, which data were included in the report are Afam VI (run by Shell), Okpai (run by Agip), the AES plant, and Ibom Power plant owned by Akwa Ibom state overnment. The PHCN power stations include Kainji, Jebba, and Shiroro – all hydro powered; Egbin and Sapele – steam powered; and Omotosho, Delta, Omoku and Olorunsogo – gas powered.

Actual Energy Generated In our previous expose on the power sector, it was shown that the country was generating less than 3,000MW of electricity and not 5,200MW as mouthed by Tanimu Yakubu, the Chief Economic Adviser to President Yar’Adua at the National Economic Summit held last December. The energy generated and sent out to the national grid as contained in the NCC report increased from an average of 2,590MWH/H in January to 2,904 MWH/H in December 2009.

This implies that after 12 months in office with over N90 billion as capital expenditure and devoting himself to “rehabilitation” and “service delivery”, the Minister of Power has only managed to increase the generation capability of PHCN power stations by 150 MW while actual generated power within the same period increased by 29MWH/H.

‘High generation capacity not the solution’ Oladapo Ademola, an energy lawyer and a partner at ILS Attorneys thinks that having a high generation capacity is not even the solution to Nigeria’s energy problems.

This comes on the heels of condemnation by some Nigerians on the government’s failure to fulfill her promise of 6,000MW by December last year.

“You might have 10,000Mw generating capacity in the country and still have power cuts,” Mr. Ademola said. “You have to take into cognizance where the capacity is.” Mr. Ademola explained that because of load loss which is about 10percent of every 100km of electric cable, “your power generally has to be located where you want to use it.” “So, when people say we have x amount of generation capacity, we should be producing x amount of power, it doesn’t work that way.” Debo Adeniran, the co-ordinator of the Coalition Against Corrupt Leaders (CACOL), a non-governmental organisation, sees the generation in government power plants as a failure.

“The power sector is not different from every other sector where the government has failed woefully,” Mr. Adeniran lamented.

“When they made that promise, some of us indicated our cynicism about it. It is not because we are deliberately cynical but you cannot trust a government that is not trustworthy by any breath. And that is why we knew that they were unserious from day one because they didn’t put any structure or any activities in place to make that dream realisable,” Mr. Adeniran said.

Soji Apampa, the President of the Centre for Business Integrity, also sees the government’s performance as a failure.

“I don’t know what any other Nigerian will say beyond being completely dumbfounded,” Mr. Apampa added.

He asked the federal government and its officials not to make any promises on the power situation again saying “I don’t want their promises. Even without promises, they make policies and they reverse their policies. Look at all the policy reversals that we have had in Nigeria in this current administration.” Some of the commentators however described the apparent success of the privately managed power stations as a sign of the government’s failure.

“They should deregulate this power thing, and allow those who can to actually deliver the thing. Government has proved time and time again that they cannot deliver on this power issue. So, they should just deregulate the sector, period,” Mr.Apampa of the CBI stated.

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