At long last, the much awaited 188MW Geometric Power Plant in Aba, Abia State, has become a reality. Thanks to the doggedness of Professor Barth Nnaji and his team who kept pushing despite many challenges. Even for bystanders, it has been a tortious marathon race, for the past two decades, from conception to reality. Many are now pointing at that power generation and distribution model, as the way out of the electricity crisis that Nigeria is facing. This column agrees with that postulation<<<READ FULL ARTICLE>>>
According to an analyst, the 188MW power plant is programmed to generate approximately 135,360,000 kWh of electricity per month, which at roughly 500 kWh per household would serve about 270,720 households. According to Professor Nnaji, the choice of Aba for the power plant was deliberate, considering the manufacturing potentials of the city. No doubt, Aba is a preeminent industrial centre in the Southeast and leads in leather works and garment production in Nigeria, and its products are easily passed off as made in Italy.
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So, the provision of permanent power could turn Aba to the industrial hub of the southeast and even parts of south-south considering its proximity to Rivers State.
No doubt, the shortage of electricity is the greatest impediment to the economic prosperity of Nigeria. With the entire country sharing about 4,886.40 MW of electricity last year, which periodically fluctuated to less than 2000 MW, and zero, when the national grid collapses, as it often does, the Aba model is the way to go. The 188 MW serves a fenced off area, encompassing industrial and residential areas.
The Geometric Power Plant also has its dedicated gas pipeline of 27km, and may not suffer the debilitating gas supply challenges that have made a mockery of the several power plants initiated during the regime of President Olusegun Obasanjo in the Niger Delta area. So, the plant generates, and distributes to end use consumers. That solves the present challenges across the country, where power generation and distribution companies are perpetually quarrelling over who is responsible for the crisis in the electricity sector across the country.
While the generating companies (Gencos) claim they generated about 14000 MW, the distribution companies (discos) distribute about 4000 MW, with part of the problem attributable to the Transmission Company of Nigeria (TCN), which owns the national grid that collapses regularly. The Geometric Power Plant has its own localized distribution wires, cables, poles, meters and transformers. So, the problem associated with vandalized transmission lines across the vast unchartered Nigerian forests is solved with the localized transmission lines.
This column has for years called for the decentralization of the transmission line, otherwise called the national grid. According to Punch, the national grid collapsed 46 times in six years. And most of the times, the reason given is that vandals have tampered with the line in difficult terrains. This column reiterates that the grid should be regionalized, so that interventions can be quicker and consequences of collapse reduced, to the affected areas.
Of course, there is the problem associated with the existing contracts between the federal government and the existing discos, which seem to have covered the entire country, save for few exceptions like the fenced up area reserved for the Geometric Power Plant. Perhaps while taking steps to untangle the contracts in a way agreeable to both parties, to starve a long drawn legal battle, the ministry of justice should advice on ways to create more fenced up areas for other investors.
Notably, the Gencos have breached many clauses in their agreement, and the 10-year initial privatization period has expired. There is also the paucity of investors willing to invest the huge resources required by the power plants and distribution networks to be efficient. One of the reasons for the disinterest by investors is the tight control of the tariff by the federal government agency, the Nigerian Electricity Regulatory Commission (NERC). That leaves Nigeria is a difficult position.
And because of the economic impacts of the removal of petroleum subsidy and the deregulation of exchange rate, President Bola Ahmed Tinubu’s administration is unwilling to yield to cost-reflective electricity tariff. The administration is in a difficult situation, because without allowing the discos to charge cost-reflective tariff, investors would not invest to upgrade the facilities. On its own, the federal government cannot raise the capital required, to buy off the investors and upgrade the infrastructure required for efficient power supply.
The way out may therefore be to fence off more commercial centres and high-brow areas, where users can pay cost reflective tariffs, and hand them over to investors willing to go the way of Geometric Power Plant, in terms of upgrading the facilities, and charging commercial tariffs. After all, the discos are already operating what they call dedicated lines, but which are very expensive to access, because the customers are few and scattered.
But with residents of some highbrow arears already getting regular power supply for which they pay higher tariffs, this column believes a lot of such possibilities exist to be tapped into. Of course, with many clusters making an alternative arrangement away from the Gencos, discos and TCN, the nation will be the better for it. And if there is improvement in the economy and inflation is tamed, the subsidy regime in the electricity sector can also be removed so that investors would have the confidence to come into the sector with their investments.
Also, on their part, the discos, with the support of the federal and state governments can concession some of their concession arears to private equity investors, where the model of Geometric Power Plant can be replicated. After all, it makes neither commercial nor common sense for Discos to hold onto large area where they are hamstrung to apply commercial tariffs because of regulations by NERC. So, where possible they can parcel out part of what they hold to other investors, and collaborate to make better returns on their investments.
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Hopefully, the southeast would tap into the Geometric Power model, for the economic renaissance of the region, as promoted by vice president, Kashim Shettima, who represented PBAT at the commissioning of the power plant recently. Governor Peter Mbah of Enugu State, who signed the Enugu State Electricity Bill into law last September, has promised to play in the generation, transmission, and distribution segments of the market. We await his style of play.
Luckily for Abia State, they now have Governor Alex Otti, who understands how to make the state prosper, unlike the consumerism of the previous eras. As I have argued on other occasions, there is need for collaboration within regions. Hopefully, the Southeast Development Commission, if it becomes a reality, can tap into the burgeoning electricity market, and help reincarnate the region as an economic power house<<<READ FULL ARTICLE>>>
