Tuesday, February 27, 2024

Illuminating the Path to Sustainable Power Solutions

In a candid and insightful conversation, the Managing Director of Ibom Power, Engr. Meyen Etukudo, offers a compelling perspective on the pivotal role of power generation and distribution policies in the private sector. The interview unfolds against the backdrop of the indispensable nature of power to the economy, drawing parallels between power and the sustenance of life itself. The MD, with a wealth of experience, shares Ibom Power’s distinctive approach to power generation, maintenance, and safety, shedding light on the lessons that could be replicated nationwide.

Highlighted is Ibom Power’s recognition as Africa’s Most Innovative Quality Power Generation Service Provider, a testament to its unwavering commitment to excellence. The MD delves into the intricacies of their operations, from consistent power production to meticulous maintenance practices, positioning Ibom Power as a beacon of reliability and safety in the Nigerian power landscape.

The interview doesn’t shy away from addressing critical issues within the power sector, notably the economic challenges faced by distribution companies (Discos) and the recurring theme of subsidy. The MD offers insights into potential solutions, emphasizing the need for improved bill collection, metering, and a strategic approach to addressing technical challenges.

 

How important is a well-thought-out power generation and distribution policy to the private sector?

Power is to the economy what food is to the body. You know without food, there is no energy to do work. Energy is the capacity to do work. Power is the same thing to the economy; you cannot manufacture, produce, store, or preserve a lot of things without a steady and quality power supply. That is how important power is to the private sector. Talking about manufacturing whether it is cement, foodstuff, or whatever it is, we have to store it in the cold room. So, to the private sector, power is business because, without power, there is no business. The small and medium-scale businesses, the vulcanizer, hairdressers, tailors, seamstresses, and even in the movie industry. Everything is about power. So, power is to the private sector and to the economy itself what food is to the human body.

Ibom Power has once been named Africa’s Most Innovative Quality Power Generation Service Provider at the African Quality Awards. What are you doing differently and how can those lessons be replicated across the country?

Well, that was some years before the COVID took place in 2020, At Ibom Power, if you look at our history there was a time when we ran for 198 days out of 365 days without shutting down, you know, none stop. This means we were producing power to the grid nonstop even when other generating companies had one problem or the other. So, it means we were constantly feeding the grid with the power. Our unit 3 produces about 115 megawatts of power, and that is not a small amount of power, it can feed a whole state.

We were not having problems with our unit because we did the necessary inspections when due. In 2017, the year we won the award, we did a Hot Gas Path Inspection of Unit 3. Subsequently, we did the Combustion Inspection, and this time we are doing a Major Inspection. So, what we are doing differently is that our plant is constantly being maintained to keep it running. Also, our workers are constantly on their toes. You can see that Ibom Power has consistently remained the best safety power plant in Nigeria. Since the inception of the plant, there has never been an accident, nobody has died at the plant site, no epidemic, and we have been announced severally as the cleanest and safest power station so far in the country. Our Head of HSE is the chairman of the health safety code in the power industry. He was elected by his colleagues in all the power companies in Nigeria. So, Ibom Power is doing well in terms of safety, maintenance of equipment, and good working relationships with staff. There is no grumbling, you know whenever staff grumbles, there would be a problem. So, some things have been amended, we have a good relationship with the community through our Corporate Social Responsibility efforts, so all these put together lead to the success story of Ibom power.

One lingering issue in the power sector is the issue of economics. The discos are complaining that they do not make a profit because they are not charging market rates, in turn, the government is paying a subsidy of close to N30 billion per month. How do we fix the problem of economics in the power sector?

Well, I think this issue of subsidy, petrol subsidy, energy subsidy, everything subsidy, I don’t know whether they subsidize our food too (laughs). You know everybody is saying the money is not enough, money is not enough, when will the money be enough? I think the issue of economics needs to be looked into carefully. How many of the eleven Distribution Companies (Discos) in this country have been able to collect 80% of their electricity bills? Inadequate metering everywhere, estimated billing but when customers’ transformers are faulty, they will have to wait for three weeks, three months, or more for it to be fixed, why then will the customers be happy to pay their bills? No single Disco in this country, out of eleven, has been able to collect 80% of their bills. How many domestic residences, small-scale businesses in the village, and so on have Discos collected electricity bills from? It’s either they don’t even put energy there, or they knock them off the grid or open their feeders and all that.

If electricity is distributed to all these people who need electricity and Discos can collect 80% of their bills, that is, if they invoice about N1billion, they can collect about N800million, people will have power and the Discos can use part of the collection for maintenance and other costs but everybody is complaining. Meanwhile, some distribution transformers are faulty for two to three months, they don’t care to fix these transformers and give power to the people so that they will be happy to pay the bills. That is why in some places, people protest when Disco’s personnel go to collect the bill. The people claim that Disco personnel only come twice a month, that’s when they want to come and collect a bill, they are not taking it as a business. So, you can’t be forcing everything and every time you are increasing electricity bills. The federal government can decide to do something about it through the regulatory body or the Minister of Power.

There are instances where Nigeria had to export excess power generated to other countries. What policy changes do we need to make to ensure that excess power generated in one place can be redistributed to an area of need?

Nigeria has never exported excess power, so remove the word ‘excess power’ to other countries. What Nigeria does is that we supply power to Niger, Togo, and Benin. What happened is that River Niger is from Fouta Djallon which runs from Mali through Niger Republic and runs up to Kanji. If the Niger Republic dams Fouta Djallon, there will be no water at Kanji. Nigeria produces over 800 megawatts of power from Kanji. Then, the discharged water at Kanji goes to the Jeba power station. Jeba has six turbines of 90 megawatts each, which is 540 megawatts, so Jeba can produce 540 megawatts. If added to the 800 megawatts from Kanji, that is about 1300 megawatts of power from 2 hydropower plants alone.

What do we give to Niger? Some years ago, it was 70 megawatts. So, we sold 70 megawatts to Niger at that time, not free, they even pay in dollars and we asked them not to dam Fouta Djallon so that it will not cut off the water supply to Kainji and Jeba hydropower stations. Togo and Benin together receive about 205 megawatts through the transmission line from Ikeja West. These countries pay for the electricity in dollars.  This is the ECOWAS relationship, the brotherhood between the 14 ECOWAS states. Now we are going to build a transmission line, a 330kV double circuit line from Benin Kebbi through Niger, to Benin to Togo to Ouagadougou which is in Burkina Faso.

With this, we can catch most parts of the 14 ECOWAS states and we make money because power is money. It is not for people to cry that the power, which is supposed to be given to Nigeria, is given to other countries, it’s not true. We can generate more power, even sell around, and make so much money like South Africa is making money through MTN, DSTV, etc. We can sell power to the whole of the West African coast, and make a lot of money. Before we can sell power on this line, we proposed, when I was at TCN, that there should be another 330kV double circuit line from Kainji to Benin Kebbi because the present line is a single circuit; a double circuit line can have more power.

Assuming we are even exporting up to 10,000 megawatts of power outside the country, you know what that will be in dollars. We are talking of making dollars and this is the avenue to earn dollars. If the distribution companies in the country cannot take more power for Nigerians to use, then, let us send the power outside until the distribution companies are ready. All the injection substations are not in use, and all the National Integrated Power Projects (NIPP) injection substations built in this country are not utilized to the maximum.

For example, in this state, Akwa Ibom, out of seven injection substations, only one is being used. The distribution companies have not been using them and that is the situation across the whole country. These are projects that NIPP spent billions of dollars to do, but today, the Discos are not maximizing their use. The discos have claimed that they have challenges in the collection of bills and other technical areas, the right things have to be done to solve these problems before complaining about exporting power to other countries.

Our national grid collapses now and then, is there an over-dependence on the national grid, and why can’t we have smaller grids in multiple states of the federation?

When you talk about the national grid collapsing, it is a result of frequency instability. Assuming the national grid is on 4,500 megawatts, all of a sudden, some discos tell their TCN areas to drop the load, then the grid is suddenly dropped from 4500 megawatts to about 2000 megawatts, and there will be a grid collapse. 2500 megawatts is out, maybe at a certain area, how will the grid stabilize? You know once an area goes off, the other areas try to stabilize.

If for example Egbin, which is the biggest power station in Nigeria, is carrying about 600- 800 megawatts and it is asked to drop the load to about 400 megawatts or 500 at a time, that area of Lagos and Ogun will suffer a partial collapse. By the time that area is lost, the whole system will be affected across the country. I think things can be done and we have engineers who can work and do these things. It is not a new invention, it is to maintain, sustain, and stabilize the system. Honestly speaking, if we solve the problem of electricity by 70%, unemployment in this country will reduce by about 50%.

In India, they have what is called state grids, you know the year that the government, or National Assembly or Federal Government will come out to enable any state that can generate, transmit, and distribute their power to do so, everybody will be on their toes to achieve it. Recently, you see Akwa Ibom acquired some aircraft, today Cross River has brought two aircraft, and so on. Soon, other states will follow suit because the business opportunity has been opened to all. The year that the Federal Government will allow states, to generate and distribute power, maybe TCN can still be there for transmission, and there will be tremendous improvements.

When the National Electric Power Authority (NEPA) was established in 1972, NEPA came up, to generate, transmit, distribute, and sale of power to Nigerians and aliens living in Nigeria. NEPA was doing well, but people criticized that NEPA was corrupt, it was this, it was that, by 31st of March 2004, NEPA ceased to exist and eighteen companies emerged under the Power Holding Company of Nigeria (PHCN). One TCN, 11 discos, and six legacy generation companies. By the 1st of November 2013, the Federal Government privatized the power assets leaving only TCN under the government’s control. Today, the generation companies, since licenses were given to independent power producers, the 6 legacy generation companies have grown to 25 generation companies, of which Ibom Power is one. Then we have 1 TCN, which is the Transmission Company of Nigeria to wheel the power, and the 11 discos to distribute and sell power. The regulatory body is the Nigerian Electricity Regulatory Commission (NERC) and the off-taker, is the Nigerian Bulk Electricity Trading Company (NBET). All these come together to form The Nigerian Electricity Supply Industry (NESI).

Things can be much better if the Federal Government puts generation and distribution in the hands of states. We have thirty-six states, but it doesn’t mean one state must build a power station, three states can combine to operate power generation and distribution within their region. For instance, in Akwa Ibom, we have Ibom Power with an installed capacity of 191 megawatts, we have even collected a license from NERC for 685 megawatts, which means our second phase is about 500 megawatts. The whole of Akwa Ibom and Abia cannot use 685 megawatts of power. When states are allowed to manage their power, if there is no power supply in your state, you know it’s caused by your generating station, so they can quickly do something by importing power while repairing the fault.

It’s high time the Federal Government thinks in that direction. Even if it is on a regional basis. After all, TCN runs within six regions headed by General Managers (GMs). In every state, TCN has work centers, and sub-regions, and all these help to facilitate competence in electricity transmission. I think the federal government should begin to think in that direction, and they will make more money, they will pay taxes, employ more people, and the country will be better off. Also, they will be able to give people more electricity, that is, 24 hours of electricity to the whole populace of Nigeria. 80% of Nigerians will be employed. I may not be an economist but I know there will be ripple effects that will reduce unemployment if there is a steady and quality power supply.

A lot of businesses and industries rely on the power sector, how do we build a power sector that is affordable and reliable to the point that it can drive local manufacturing and attract global manufacturing?

What I have said is that there is a need to deregulate power distribution completely. Although it seems deregulated when you consider that, today we have 25 power stations. We need to build more transmission infrastructure, that is, sub-stations, both at 330kV and 132kV, build substations, and encourage private sector participation.

I think apart from injecting money into the sector, the government should look into regulation. There should be punishment for violation. Also, there is a need for customer awareness, as soon as people know their rights, they will begin to take electricity companies to court for violation. This will make service providers sit up. If a transformer is out for three weeks and has been reported to the disco but nothing is done about it, the customer can go to court to claim damages. For instance, if goods were refrigerated and spoiled because the discos refused to respond to the report of a damaged transformer. Once people begin to do that and numerous cases against discos are filed in court, I think the discos will get serious.

Let us do serious business with power, and let us bring those who know the power and the business of power to be at the helm of the sector. Let’s check these people, what is their experience, and what have they done? Why people are so proud of NEPA because of the training they gave NEPA staff. Once you finish your NYSC, you go for two years of pupillage training in generation, transmission, distribution, and engineering. Let us groom people to know power because power is to the economy what food is to the body. You know if there is no food, the body does not have the energy to do work, similarly, without power, there is no economy. Let’s recruit and train people to manage the power industry by putting square pegs in square holes; let’s bring industry experts together to manage the sector. Period.

 

This interview is part of a special publication: Avalon Policy Report of Power

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