New Electricity Act will enable states develop independent power market – Adegbemle, ED, PowerUp Nigeria

THE Executive Director, PowerUp Nigeria and a power sector governance expert, Adetayo Adegbemle, speaks with HARRISON EDEH of The ICIR on concerns on the Federal Government’s mass metering programme, how states can explore opportunities in the new Electricity Act, and other key issues in the power sector.

Can you share your thoughts on the mass metering programme. Where are we currently?

To be frank with you, everyone is confused about the progress of the National Mass Metering Programme,(NMMP), and it’s a shame we cannot muscle the resources, even after taking the World Bank loan, to complete a simple project like the NMMP.

The last serious thing I heard was in late December 2022 that contract offers were given to meter manufacturers, but the prices quoted were ridiculously low. So, manufacturers and vendors were writing and asking for the review of the awarded prices.

Where do you think the government possibly got it wrong?

On the NMMP, we actually reached out to the Federal Government and asked that the approach should be changed. We should not continue to take loans and be consuming without a plan to sustain whatever gains we might be getting.

The NMMP itself was a kneejerk reaction, a Trojan Horse, if I may say, because the FG came up with the six million meters idea when it insisted on implementing the Service-Based Tariff in September 2020.

By now, we should have had a Common Meter Design – like they have in China – and build an ecosystem around metering so we can start sourcing for parts locally. I even made a presentation to the Nigerian Society of Engineers on this, to showcase the entrepreneural opportunities that we can develop.

The basal thinking of NMMP was not to solve the problem of metering in Nigeria, and has not solved the problem of bridging the metering gap.

The Senate Committee on Power is pushing for the reversal of the 700-megawatt Zungeru concessioning. What is the cost of this inconsistency to power sector reforms?

I have asked: in whose interest is this? I don’t believe this will be done eventually, so I won’t bother myself too much about it.

The new Electricity Act recently signed by President Buhari offers hope. But do you have concerns about a possible breach in this legislation?

No, not at all. In fact, myself and my organization have been asking for this constitutional amendment since 2015.

There’s no reason we should continue to deceive ourselves about the progress being made in the power sector. And if we want any change, our mental approach should also change.

This amendment opens up the power sector for investments, both at the state and national levels.

Of course, not all states will be able to float their own electricity market, but those with the capacity will do it, and should be a relief on the national grid.

The amendment is also clear, so I am not expecting any breach.

What can states do differently to reap the benefits from this landmark Act?

States like Lagos State are already advanced in this regard. I think Akwa Ibom and Cross Rivers are, too. Some people have argued that it’s not possible to have two parallel distribution lines. This is not true, as we presently have a system like that running in this country.

Two distribution lines running in parallel can exist, and this opens up a proper competitive market.

Imagine Lagos running a distribution line from their independent power projects (IPPs) in Alausa, Ikeja, to Maryland, then concession it out, thereby making it possible for people in that axis to switch their distribution company.

States can also license metering companies to meter every household in their coverage area.

We are not even talking of original equipment manufacturers that will benefit from the development.

Then, states can now trade in electricity, selling to neighbouring states, and the national grid.

Are there possibilities of enacting state electricity regulatory commissions, and how does that pan out?

This is what it means, basically. States can now have their individual Electricity Regulatory Commission to handle everything electricity within their boundaries. Enacting this will be left to the respective House of Assembly.

What will become the fate of various contractual obligations entered into by the government, which could be tied directly or indirectly to the new Act?

I don’t believe it has any adverse effects on existing contracts, and don’t also forget that this is a market in evolution. Everything can run concurrently.

Where does this new Act leave the generation, transmission and distribution companies? Does this Act signpost any form of policy somersault?

No, there’s no policy somersault here; this is a constitutional issue.

What the amendment did was to remove the restrictions that we had. So, while power has always been on the Concurrent List of the constitution of the Federal Republic of Nigeria, and allowed states to only provide power where the national grid didn’t cover, the amendment now allows states to operate without such limitations.

Many upbeat investors have started signalling interests into Nigeria’s power sector. How does this new Act enable them to do more?

One of the electricity meters distributed to communities. Photo by Sodiq Ojuroungbe

I have mentioned this earlier. Now states can develop their distribution networks and can generate power locally and consume same locally.

All these will need funds, and the development of local industrial capacity.

Investors can now look at the gamut and choose where they want to play. We are also poised to consult and provide business intelligence for any interested investors that might like to play within that space.

Lagos State has also published a Policy Document to throw light on their vision for Lagos State power market. I am sure other states will follow suit; and again, we can provide business intelligence for any investor that might be interested in any state.

How would states re-set themselves to tap into the enormous benefits of this new Act?

I will continue to use Lagos as an example. Lagos State started with the Lagos State Energy Board since the Babatunde Raji Fashola days, compiling data and researching into Lagos State capacities. So at one glance, you can see what the energy demands for Lagos is and what investment opportunities are available.

Other states are advised to take similar steps. Let the world know what local resources are available. If I were to be Ondo, Kogi or Enugu state, I would be talking to investors from Australia, Poland and India on how the available coal resources could be used to generate electricity and service my state, and then, maybe, now sell the excess to the national grid, thereby creating massive internally generated revenue as well.

With this new Act, where do you see the sector in the next 10 years?

Like the maxim says, ‘the best time to plant a tree was yesterday, the next best time is now.’






     

     

    The constitutional amendment has opened up further opportunities for us to resolve the power challenges we have been having, and the only thing that can make it successful, or otherwise, is the intent of purpose with which we implement it.

    Positive results are expected, at least, from states with resources, and there won’t be any need for one section or set of people to be dragging back the nation.

    Don’t also forget that this is also a drive at deregulating power from the centre, and every state can now develop at their own pace.

    The future is exciting for Nigeria and the power sector.

    Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.

    Join the ICIR WhatsApp channel for in-depth reports on the economy, politics and governance, and investigative reports.

    Support the ICIR

    We invite you to support us to continue the work we do.

    Your support will strengthen journalism in Nigeria and help sustain our democracy.

    If you or someone you know has a lead, tip or personal experience about this report, our WhatsApp line is open and confidential for a conversation

    2 COMMENTS

    1. I read most of the responses and I can’t but laugh……….Why not speak to subject experts for the sake of your readers?

    LEAVE A REPLY

    Please enter your comment!
    Please enter your name here


    Support the ICIR

    We need your support to produce excellent journalism at all times.

    - Advertisement

    Recent

    - Advertisement