A leading Nigerian energy expert, Prof. Bart Nnaji has suggested that the solution to country’s deteriorating electric power crisis included the payment of both the N6.8 trillion owed the power generation firms, the over N200 billion owed distribution companies, and allowing distribution companies (DisCos) to charge cost-reflective tariffs.
He also recommended that the Power Purchase Agreements (PPAs) between electricity firms and the Federal Government which the President Muhammadu Buhari administration suspended should be restored.
Delivering the 30th, 31st and 32nd graduation lecture of the Abia State University at Uturu on Thursday, Nnaji, who was a Minister of Power, said that other steps included building a national super grid of 765KV and decentralising its operations.
He explained that the decentralisingwould ensure that a fault in one networked plant would not cause a national blackout.
Nnaji, who now leads the Geometric Power, which drives the Aba Integrated Power Project, called for the development of Nigeria’s 210 trillion cubic feet of natural gas since 75% of the nation’s electricity is thermal.
Also a former Minister of Science and Technology, Nnaji advocated that DisCos be encouraged to have embedded generation firms.
He pointed out that greater official attention should be placed on DisCos, which he said had been neglected more than other segments of the electricity value chain, adding that a review of the coverage areas by each distribution firm should make them more agile.
Drawing examples from India, China, Brazil, Egypt, and the United States, Nnaji noted that practically ‘each industrialising nation adds to the stock of its quantum of electricity every year’, and contrasted that with Nigeria that ‘has not built a new power plant in the last 12 years except the 451MW Azura-Edo Power Plant in Edo State and the 188MW Geometric Power Plant in Aba, Abia State’.
The former minister, who had a storied career in the United States as a world-class scientist and research engineer, argued that people would not invest in new power plants without a financial instrument like the World Bank-backed Partial Risk Guarantee (PRG) to provide investors comfort.
He told the university community that interrupted his speech intermittently with applause: ‘This is because it is exceedingly expensive to invest in power generation.
‘It costs about $1.3 million to construct one megawatt gas-fired plant, which is the cheapest in the country, as solar, wind, and hydroelectric technologies cost more’.
He added that investors would like to know how they could recoup their heavy and long-term investments, and the PRG is about the only realistic instrument to provide comfort to them.
He challenged the notion that investors would like to sign such PRGs with state governments following the implementation of the 2023 Electricity Act that permits subnational entities to regulate power generation, transmission, and distribution in their domains.
The state governments have limited financial capabilities, he explained.
Nnaji explained that even if the federal authorities reversed the suspension of the PPAs and work commenced immediately on the construction of a new plant, it would take at least three years to complete it, meaning that Nigeria would be one of the few countries in the world that would not expand its quantum of electricity in over 15 years.
Commending the Federal Government for setting up a 19-man committee, headed by the President’s Chief of Staff, Rt. Hon. Femi Gbajabiamila, to accelerate the recovery of some stranded 1,600MW within two years, the Geometric Power Chairman said that Nigeria needs 100,000MW to become a higher-medium economy by 2040, referring to the 30,000MW suggested by the Nigeria Electricity Supply Industry by 2030 as unrealistic.
He said that an electricity-hungry nation like the United States would do everything possible to increase its supply by all means, including reembracing coal-fired plants in the face of power demand unleashed by generative AI data centres, comparing it to the return of coal plants by European countries in the wake of the energy crisis occasioned by the Russian invasion of Ukraine in 2022 that forced the European Union to impose sanctions on Moscow.
Nnaji lauded the Federal Government for returning to the 765K super grid he convinced the Goodluck Jonathan administration to approve in 2012 but was abandoned after he resigned the same year over the manner of the privatisation of Power Holding Company of Nigeria assets.
He advocated its regionalisation in technical terms rather than in the geopolitical sense, so that ‘a fault in one remote part of Nigeria would not lead to a nationwide outage, as is the case currently’.
The energy expert said that though his firm does not benefit from Federal Government’s subsidy payments to power firms, he ‘strongly supports the payment so that the power sector won’t collapse’.
He referred to the DisCos in Ibadan, Benin, and Yola as examples of power distributors covering unwieldy geographical areas, calling for their review.
He said that Aba Power, in contrast, covers only nine of the 17 Local Government Areas in Abia State, which he said enabled it the utility to operate in an agile manner.
Among the distinguished guests at the lecture were the Chairman of the Abia State University (ABSU) Governing Council, Hon Agwu A. Agwu, the ABSU Vice Chancellor, Prof. Ndukwe OKeudo, and the Special Adviser to state governor on Tertiary Education, Dr. Emeka Enyeazu.
