Engr. Razaq Obe,Commissioner for Energy , Mines and Mineral Resources Ondo State, Commissioner for Energy , Mines and Mineral Resources Ondo State, Seun Suleiman, Managing Director of Siemens Energy, Chineye Uwanaka, Partner at The Firma Advisory,
Mr. Kehinde Alabi, Chief Operating Officer AXXELLA Limited
Experts have revealed that the story of Nigeria’s electricity woes will continue until both the state and Federal governments learn to obey the sanctity of contract and create the enabling legal and policy frameworks to foster collaborations among the different stakeholders.
This according to them will help to address the issue of overlapping responsibilities by regulatory authorities and implementation agencies in Nigeria and ensure that Nigeria’s on-grid electricity capacity is adequate enough to take the country to the next level of growth.
The stakeholders made this known during a plenary session with the theme: Powering with alternative energies to stabilise and secure the future”, at the just concluded Develop Ondo, 2:0, in Akure, Ondo State. which held between July 24 and 26, 2023.
Engr. Razak Obe, Commissioner for Energy , Mines and Mineral Resources Ondo State who moderated the session, stated that electricity is the final product of a long value chain that requires various inputs. Without electricity, he argued, civilization is not possible. He further pointed out that countries and places with access to electricity tend to have prosperity, while those without electricity often experience poverty.
Engr. Razak Obe referred to data that shows a correlation between the presence of electricity and economic well-being, adding that based picture recently taken from the sky shows that countries and places that are brightened by electricity have prosperity, while those that are dark at night have poverty.
Seun Suleiman, Managing Director of Siemens Energy, in his remark, said that the on-grid electricity capacity is not adequate enough to take Nigeria to the next level of growth due to overlapping of responsibilities by regulatory authorities and implementation agencies in Nigeria.
According to him, this is why energy access has been unattainable.
He emphasised that energy is a right to life, and human beings cannot do without a form of energy source or other. He noted that it is very essential the citizen has access to energy.
He said, “There are over 22 government agencies doing overlapping responsibilities in Nigeria. The regulatory and implementation agencies have so many overlapping responsibilities in Nigeria, and this is why energy access has been unattainable.
Suleiman while discussing the Nigeria Presidential Power Initiative and partnership with SIEMENS, stated that in 2018, said that Germany, former Chancellor Angela Merkel visited Nigeria with the Roland Busch, President and Chief Executive Officer of Siemens, and met with former President Mohammadu Buhari to discuss a bilateral agreement on how to address Nigeria’s power infrastructure.
He said that during that visit, agreements were reached to boost Nigeria’s electricity capacity in phases, including phase 1 (7000MW), phase 2 (11,000MW), and phase 3 (27,000MW).
“Nigeria currently has 14,000MW of installed capacity on the on-grid level, but only 4000MW is available daily, leaving 9000MW to 10000MW stranded and idle.
“SIEMENS’ intervention is fundamental to bringing this stranded capacity back on the grid. The National grid is weak, which results in weak transmission, so SIEMENS’ intervention aims to fix this issue and close the infrastructural gap that exists in the system. SIEMENS’ role is to make the stranded power available by addressing the technical losses, while the DisCos are expected to solve the commercial losses,” Suleiman said.
The MD Siemens Energy, therefore noted that the challenges can therefore be addressed if there is a level of commitment from all parties and stakeholders.
Suleiman also noted that Nigeria must also activate the off-grid power sector, adding that a mix of both the off-grid and the on-grid will address Nigeria’s energy poverty.
Mr. Kehinde Alabi, Chief Operating Officer AXXELLA Limited, in his presentation pointed out that Nigeria’s gas production level has been averaging 1.5 trillion standard cubic feet (tscf) between 2005 and now, while the consumption of gas molecules during this period has been around 6.9 billion standard cubic feet (bscf).
This according to him means that Nigeria is only producing 0.7 percent of its average gas reserve of 206.5 tscf, indicating that the country is not fully utilizing its gas resources.
“Moreover, it is a matter of concern that Nigeria is consuming only 6.9 bscf of gas despite having a reserve of up to 205.6 tscf, which suggests a bigger problem.
“A significant amount of gas being produced is being flared, as upstream oil and gas producers are reinjecting the gas molecules back to the base while also flaring the excess. Therefore, the government needs to double its efforts to convert this gas molecule into an economic commodity.
“Apparently, the upstream oil and gas producers are reinjecting the gas molecules back to the base while also flaring the excess. The government needs to double its efforts it is ensuring that we convert this gas molecule into an economic commodity,” he noted.
Speaking about the power needed at the moment by Nigerians, Alabi revealed that based on the data from the Association of Nigeria Electricity Distribution (ANED) the estimated power requirement of Nigeria is about 30,000 MW, while the combined generation capacity of thermal and hydro, the grid is only 17,000MW. while only 4000MW is produced for over 200 million people.
He said, “This is not to say that we cannot produce beyond that, but we are not creating enough capacity to meet our demand, hence we have a massive feedstock supply gap and a huge infrastructural deficit to provide over 30,000MW that we require. This is why many industries that are shutting down simply because of energy access.
“To close the gap, we have to deepen the newly initiated Decade of Gas agenda to meet the needs of Nigerians in the gas space.
“The problems can also be solved through collaboration from the government, the private sector, and other stakeholders to come in and proffer the solution,” the AXXELA COO said.
Alabi therefore charged the Government at all levels to also be ready to create the enabling legal and policy frameworks to foster collaborations among the different stakeholders, this according to him will unlock the challenges in the value chain.
Chineye Uwanaka, Partner at The Firma Advisory, has highlighted the issue of policy duplicity and implementation in some of the energy programs, policies, and initiatives of the Federal Government in Nigeria.
She disclosed that despite significant developments in the energy space, there is little to show for it, and the business environment in Nigeria is unfriendly for investors due to inconsistent policy and regulatory frameworks.
Uwanaka emphasized that having good laws is one thing, but possessing the capacity to implement those laws is another.
She however, identified two policy measures that could free up the market for unhindered participation of the private sector: the constitution amendment bill that devolved power to the sub-nationals signed under the Buhari administration and the Nigerian Electricity Act assented to by President Bola Tinubu.
She said, “Now that the legal framework has been addressed, states have the capacity to generate electricity, and many of these states are ready to pass their electricity laws and take over and set up their electricity regulatory commission.
Uwanaka pointed out the issue of policy duplicity and implementation in some of the energy programs, policies, and initiatives of the Federal Government in Nigeria.
The Partner Firma Advisory emphasized the need for domesticating the electricity market at the state level, even after the passage of the Electricity Act, this according to her would ensure the existence of a local framework.
She urged the state government to show commitment by providing the financial base to support private sector partnerships in driving the subnational electricity market.
Uwanaka said that financing has been a significant challenge in the renewable energy space, leading to stalled projects. They propose the establishment of a mechanism for mobilizing capital, leveraging blended finance sources, and creating frameworks to attract investors to the state.
The advisor also highlights the game-changing provisions of the Petroleum Industry Act (PIA) in the Nigerian energy space. They specifically mention the importance of community engagement and participation, emphasizing the need to use the host community fund for the development of the state and creating an investment-friendly environment.
The stakeholders at the end of the discussion session, therefore, charged the Government at all levels to create the enabling legal and policy frameworks to foster collaborations among the different stakeholders, which will unlock the challenges in the value chain