Proposed privatisation of IPPs and governors call for inclusion

Energyday Editorial


The Nigerian governors’ forum last week expressed a desire to share from the proceed of the planned sale of Independent Power Plants (IPPs) by the federal government.

At EnergyDay, we find the desire of the governors most appalling for many reasons.

First, we’re convinced that at the root of this wish is the pathological laziness and lack of creativity on the part of the governors to look beyond cap in hand mentality. The governors prefer to depend on dividends from the centre in Abuja instead of looking inwards for opportunities to develop and better the lives of their citizens.

Second, blinded by the cap in hand mentality the governors could not see the enormous potential in the states acquiring the IPPs and use same as instruments of transforming their economy but prefer as usual to collect the cash from the sale even at the detriment of the state.

Ordinarily, one would have expected governors of host IPP stations to purchase the power plants on offer and take advantage of the Nigerian Electricity Regulatory Commission (NERC) embedded power policy to create industrial clusters and grow the state’s economy.

Bearing in mind that all the monthly allocations they have been collecting have not reflected in economic prosperity for the citizens.

We are aware that each state in the country has a rural electrification agency. But unfortunately, these agencies exist only in name. Obviously, any leader who have the interest of the people at heart should see the wisdom of acquiring the IPPs instead of asking for the fallout from their sales.

Despite the importance and contributions of electricity to every facet of human endeavour such as health, education, agriculture and households, access to it remains elusive in most parts of the rural areas in the country.

In such circumstances we’re at a loss as to why the governors can’t insist on acquiring the IPPs and converting same to assets of the state rural electrification agency and to improve the electricity needs of the rural areas.

EnergyDay is of the view that the time has come when state governor should think beyond what Abuja has to offer and be creative to save the nation of its numerous economic woes.

There is no gain saying the fact that the economic and industrial development of any community, state or nation depends on availability of power.

The current situation where power is generated and sent to a central system no doubt has proven to be a failure. That is the only reason why the nation generates over 7,500 megawatts (MW) but only 4,000 MW is distributed to consumers.

It’s our view that except the state government takes and identifies new initiatives to provide electricity for their communities economic development may remain elusive.

The implication is that the socioeconomic challenges facing the country may persist.

In our candid view, the governors of the IPPs host should take advantage of the NERC embedded power generation initiative. Create an industrial cluster or estate with infrastructure such roads, water in addition to the power from the IPP to attract investors to the states. That way they will not only increase their internally generated revenue but provide jobs for their citizens.

Good enough, the embedded generation regulation allows an independent power producer to embed power within the network of the local distribution company without going through the trouble of connecting to the transmission network (national grid). This allows distribution companies to procure small power and dedicate it to ring-fenced customers who could pay slightly higher price for 24/7 electricity supply.

NERC has repeatedly urged stakeholders to embrace micro-grid power generation model for industrial clusters, to ensure cost effective and reliable electricity production.

The Commission had described the program as Special Purpose Vehicles (SPV) design to fast-track power generation for industrial use.

The question that readily comes to mind is given this scenario, why is it difficult for states to harness the opportunity provided by NERC regulations to purchase the IPPs rather than support their sales and continue to complain for the lack of electricity in their states

Like many Nigerians, EnergyDay, finds it disturbing that some of our governors appears not to be interested in stable power supply which could lead to economic development in their states, but are more fascinated with sharing formula of monthly allocations.
How much of this monthly bazaar go into the state’s rural electrification agency?

It seems the governors are more interested in blaming federal government for all manners of ills, while they are not ready to own up to their own responsibility at the state level.

There is a need for a change of mind on the part of governors on the score, since there is logical affinity between economic development and power.

It is high time the forum of governors knew the meaning and importance of the provision of electricity in their state.

At EnergyDay, we are aware of the fact that the challenge of lack of access to electricity especially in the rural areas of Nigeria is further compounded by the lack of cogent electrification plans, due to lack of interest in rural electrification by governors.

A reasonable electrification plan should be able to model least-cost electrification technologies to be employed and give an estimate of investments required over a given period of time.

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