On Wednesday, 14th of August 2022, the whole country was thrown into a blackout as electricity workers led by the National Union of Electricity Employees (NUEE) began a strike over welfare issues.
This strike occurred against the backdrop of a conflict of interest between the NUEE and the Transmission Company of Nigeria (TCN). The blackout left many Nigerian homes and businesses without power for more than 24hrs, but if you’re a Nigerian living in Nigeria, the power outage is no news.
Nigeria, a country with the largest economy in Africa and the largest population of black people in the world is plagued with an epileptic power supply. The National grid of the country has collapsed six times this year alone throwing the entire country into darkness.
Nigeria has 23 generating plants across the country which are connected to the National Power Grid in Osogbo, Osun state with an installed capacity of 11,165.4MW and an available capacity of 7,139.6MW. These plants are managed by Generation Companies (Genco’s), Independent power providers, and Niger Delta Holding Company.
The electrical power generated by GenCos is used to power the grid through the Transmission Company of Nigeria (TCN).
The TCN is made up of two major departments: System Operator and Market Operator. The Market Operator (MO) is a department under TCN charged with the responsibility of administering the wholesale electricity market, promoting efficiency and where possible, competition.
The responsibilities of the System Operator include Implementing and enforcing Grid Code, system planning, providing demand forecasts, undertaking dispatch and generation scheduling, etc.
Before the privatization of the power sector in September 2013 by the GEJ government, it was widely believed that the horrid state of the Nigerian power sector was proof of the incompetence of the Power Holding Company of Nigeria (PHCN) to handle power generation, transmission, distribution, and selling of electric power to consumers throughout the country all by itself.
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Privatization was deemed a significant milestone at the time, and there were massive expectations of a significant improvement in power supply. 9 years after and the stable power supply still remains a pipe dream for Nigerians.
What is the root cause of the problems in the Nigerian power sector? Is it a power generation, transmission or distribution problem?
Some experts argue that the foundations of the process of privatizing the power sector were heavily flawed. Dr. Sam Amadi for instance, a former special adviser to the senate president of Nigeria and a one-time chairman of the National Electricity Regulatory Commission (NERC) argues that the use of short-term borrowing to execute projects with long-term returns was the first mistake made by the Distribution Companies (DisCos).
He believes that the loans acquired by the investors who bought these assets from the FG totaling about $2.53 billion remain one of the problems in the sector to date. Some others are of the opinion that the government was privatized too soon. They believe that there should have been a rejuvenation of the sector first to gain efficiency through effective regulation and good corporate governance before privatization ever took place.
Whatever the varied opinions are, the reality remains that privatization which was seen by many as a step in the right direction is yet to yield the much-awaited positive results.
The current electricity generated in Nigeria is sparse to meet the demands of homes and businesses; as a result, Nigeria has a low per capita consumption of electricity.
To put into perspective, because of our size and population as a country, at least 40,000MW of electricity is required to meet the basic electricity consumption demands of citizens, yet we generate just over11,000MW. Besides this deficit, available power plants operate below optimal levels, and power generated was lost in transmission.
Nigeria in the early years of democracy experienced a whooping 46.9% loss ratio between electricity generated and electricity billed. Although in recent times, this percentage has reduced drastically, we are still very far from having a fully functional and efficient power sector in Nigeria.