5. January 2014 Falcon

Issues that may hinder power in the new era, by Prof. Ezigbo

The Federal Government on Nov. 1 handed over the Power Holding Company of Nigeria (PHCN) to 18 private firms.
The move, which was part of the process to make the power sector vibrant, marks the beginning of Nigeria’s road to industrialization but there are lingering issues that ought to be resolved fast to ensure that there is a smooth transition
Professor Joseph Chukwurah Ezigbo is the managing director of Falcon Petroleum Limited, a company which provides a range of oil and gas engineering, design and consultancy services. In this interview, he says the move is one of the best thing that ever happened to the country but warns that if the players in the gas sector don’t have the resources to supply gas for power generation at a cheaper rate, the electricity reform might turn out an exercise in futility.

Basically, it is a great thing that has happened to Nigeria. The government divorced itself completely from power sector just like they did in telecommunications . We have seen the effect in communication which has expanded beyond our widest dreams.
In the same vein, we can say that the chances that the power sector would come into its own was very likely at one condition that the government sticks to the rules. They are divorced, they should stay divorced but we must create all the legislative paraphernalia that is required to ensure that the players involved in the power sector succeed.
Also, there ought to be harmonization particularly in the pricing structure to allow this change over because you know that for the power sector to actually perform properly the gas prices must be right as most of the power distribution would be gas generated and at the moment the pricing is such that the industry pays more for gas distribution than for electricity.
If the players in the gas sector don’t have the resources they require to be able to supply gas for power generation at a cheaper rate than it is, there are going to be issues. These are the issues that ought to be resolved now and fast to ensure that there is a smooth transition and that we don’t have adverse effect or hiccups at the end of the day.
Having said that, there also other things that government should look at to create enabling platform for gas distributors to have access and the distribution companies to take electricity and put it directly into distribution lines without it going to the grid. I would give you an example. We at Falcon Petroleum own the Ikorodu franchise. A couple of years back, I had discussions with Lagos State Government and we assured them that we could deliver electricity in Ikorodu 247. Having said that, the issue of distribution companies came up and we are planning to deploy gas generators in the country to generate electricity and put it directly into distribution lines in agreement with the distribution companies.

That means the loss of electricity in the atmosphere would be reduced. It means that electricity can be distributed to people in Ikorodu straight through the distribution lines and what it takes to repair or bring up to date the distribution lines would be less and still go directly to them. We are hoping that this would be a pilot project that would allow the world to realize that it is actually possible to deliver electricity to a small group of people 247 for the country. .
That way we would fix our power supply and spread to other places particularly in the areas where we have gas. If we can deliver electricity in all the areas where gas is available, it means that whatever is being generated in our bigger stations can now go to the rest of the nation . That way we can experience less power disruption in the system.
So, what I am saying is that the handing over to the distribution companies would make easier for you to discuss with a smaller group of people not PHCN as it is before that didn’t have the malleability to be able to take such smaller decisions that can be put into the hands of the distribution companies in small pockets of Nigeria. We are hoping that what they have done really would be the best step to actual industrialization of Nigeria.
But you see, no nation has developed industrially without iron and steel. We can have all the power we want in this world, if we don’t have iron and steel, we are not going anywhere because virtually everything today is steel based. Once we have steel, we can build ships and cars with steady power supply and with the availability of iron and steel in all its form, this country Nigeria would go places.

There is no implication. The point is that each time I look at Nigeria, it is a country that has failed to abide by rules. Nigeria has defiled all political rules, Nigeria has defiled all economic rules. Nigeria has defiled virtually everything and it is always good to do things that would adapt to the people and to the laws of that time to make it suitable for physical utilization. All over the world, Nigerians are thriving.
So, as long as we address all the pitfalls and as long as we divorce ourselves completely from interfering with the system, to me it is the best thing that has happened to Nigeria. But again, we must also come to the fact that there are other addition that would enable us climb higher in our quest to become industrialized. So, we must resolve the lingering issues in the power sector. Once we do that this country will be fine.

I would take you back to when GSM came out initially, people paid a lot of money to get SIM cards . It is essential for a few areas to take the brunt of the cost of electricity. If we spread electricity as it is to every nook and cranny immediately and expect the best, there must be an issue . I do know that a lot of houses in Nigeria make use of the smaller generators popularly known as I pass my neighbour but the cost of fueling these generators is very high.
So, what we need to do is to ensure that there must be a national campaign and massive education of people to let them understand that the cost of electricity is far better. We just have to bear the brunt for a while but with time things would fall into shape just like we witnessed in the telecoms sector. So, if the enlightenment is done properly within the power sector, definitely we would get good results.



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