Friday, 12 June 2015

Electricity Industry in Nigeria

Electricity Industry in Nigeria

Grid Electricity for Homes

Being a Nigerian or residing in Nigeria can be very tough. If you have experienced Nigeria then you should be aware that Electricity is a very difficult commodity to come by and you must know that getting ten hours of electricity in Nigeria everyday is nearly impossible. Furthermore, the electricity bills are coming in every month with fixed and usage charges; and with the advent of privatization we will be expecting increment as well.  


Electricity in Nigeria

In addition, over 60% of households Nigerians generate their electricity using privately owned petrol or diesel generators; also, private businesses that depend on electricity to function generate their electricity using generators. It will be more illustrating if we analyse fuel consumption and its costs.

Private generators in the same neighbourhood

Do you run a fuelled generator in your home? Probably, you run a 2.5kVA generator; but have you bothered to check on how much you spend running your petrol or diesel fuelled generator? A 2.5kVA petrol generator can run for seven hours on six litres of petrol, running this generator for seven hours every day, for one year will consume 2,190 litres for one year and this will amount to ₦212,430; note that this excludes generator costs, maintenance and logistics, and I assumed the cost of petrol is ₦97. Including maintenance and logistics costs, we will be having about ₦245, 000. Furthermore, an average home consumes about 18,250kWh in a year from the grid assuming if it receives power for ten hours daily for a year. Considering an average home within Port Harcourt Electricity Distribution Company PHEDC, it will ₦15.02 per kWh and a fixed charge of ₦700 monthly; consequently, an average home will pay about ₦282,515 for ten hours of electricity daily in a year. Therefore, for an average of 17 hours of electricity daily, an average home will be paying ₦527, 465 in a year; and, to have 24hours electricity an average home is expected to pay ₦772, 415 in a year.



Grid Electricity for Business

As a business owner, depending on electricity procured from the grid is a deliberate plan to terminate the business. Power supply to businesses without a dedicated transformer via the grid can last for about 2 hours maximum during business hours; consequently, businesses in Nigeria run mainly on petrol or diesel generators. Cybercafés, banks, saloons, copy centres, industries, just name them; every business in Nigeria never rely on power from the grid. However, the cost of powering these businesses is enormous and increasing due to the fluctuations in the cost of petrol or diesel.

The volume of fuel most businesses consume in Nigeria is so huge that we will be wondering how we will be able to solve the problem lack of constant electricity in Nigeria. The government seems to be slow in securing investments into the power sector. Currently, Nigeria generates power at the rate of 4GW and if the country is going to make progress industrially and technologically, Nigeria needs to generate power at the rate of 100GW by 2020.

Rising cost of oil

Let us take a look at a cybercafé that runs it business on a 15kVA generator; period of operation is from 0800hrs to 2000hrs, that is 16 hours. To run a 15kVA generator for 16 hours will at least 55 litres of diesel at the cost of ₦150 per litre of diesel. Assuming this cybercafé operates every day except Sundays, this implies that it will operate for 313 days in a year; consequently, the cost of fuel consumed over a year will be about ₦2,575,542.86. Note we are yet to include the cost of the generator and maintenance costs for the generator.


Standards in the Electricity Industry

Are there standards in the electricity industry in Nigeria?

Probably there were standards in the Nigerian electricity industry, or there are standards at some levels. Electricity is only experienced by consumers at distribution section, only the knowledgeable in the field are aware of the other sections of grid electricity. Well, we are glad most people do not know what goes on at the generation section, transmission section, sub-stations, etc; probably there could have been lots of more fatal incidents.

Why am I concerned about standards? At every corner in Nigeria, everyone is a technician or ‘engineer’ depending on the title that make the person feel important. A lot of buildings are not properly wired, the entire wiring are not done with reference to standards, sometimes these substandard connections cause electrocution, fires, and send faulty feedbacks to distribution transformers which end up degrading the transformer and the entire system.

Furthermore, another problem in our electricity is illegal connection. The people that do these connections are not usually trained on the job, they do the work based on what they pick in the streets, the connections are not properly terminated, the wires used are substandard and other gadgets used for connections are ignored and bypassed.

Another problem is the inefficient bill collection system. Most times, when agents of the distribution company go about their disconnection business, they tend to look for monetary kickbacks from consumers; consequently, some consumers end up not being disconnected despite owing the distribution company. This has reduced the authority rightful bestowed on these agents because they engage in illegal activities during their job.
Disorganised Wiring

In addition, some consumers engage touts to reconnect them back to the grid when there are disconnected by the distribution company agents. Other consumers take it further by illegally hooking back their lines on the distribution lines when the distribution company agents have left the premises.

Possibly, the reason why most people tamper with electrical connections is because we utilise overhead distribution system. It is a very open and unsecure system of electricity distribution.
Investments, investments, investments are need to achieve an efficient electricity system in Nigeria but how are the investors going to recoup their investments with all these lack of regulations and standards in the distribution sector.
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