… abandon ACs, electric cookers, others
Embrace alternative power supply for survival
BY KENNETH EZE
Monopoly in the electricity power sector was consigned to the dustbin of history with the reforms initiated by the President Olusegun Obasanjo administration, which gave birth to the Power Holding Company of Nigeria.
A statement on the history of the PHCN on the website of the Nigerian Electricity Regulatory Commission, said, “In the year 2001, the reform of the electricity sector began with the promulgation of the National Electric Power Policy which had as its goal the establishment of an efficient electricity market in Nigeria.
“It had the overall objective of transferring the ownership and management of the infrastructure and assets of the electricity industry to the private sector with the consequent creation of all the necessary structures required to form and sustain an electricity market in Nigeria.”
The reforms, sustained by subsequent administrations, have seen the sector unbundled into segments with different companies, now in private hands playing at different regions, ranging from generation to distribution, yet the major investors seem to have found it difficult to wean themselves of the milk of support from the Federal Government weaved into the privatisation agreement as subsidies.
Government’s laudable intention would have been to open up the sector for private participation, so that businesses can compete ethically, while the public would be served optimally.
But that has not been the case.
Confronted with harsh realities, recent years have witnessed increasing cry of discontent from members of the public who contend that the distribution and generation companies should learn to thrive as businesses as against relying on the subsidies.
Vice President Yemi Osinbajo, disclosed at a conference in Abuja last week that the government felt that the electricity sector should be self-sustaining, by generating its own revenue.
“It is anticipated all electricity market revenues will be obtained from the market with limited subsidy from next year as reforms in metering and efficiency with the DisCos continue to improve,” he said.
This should be one of the things to look forward to in 2022, because economy watchers are already contemplating what segments would benefit from such huge savings, a whopping N360bn per annum.
Many Nigerians see no reason the government should continue pouring N360bn of tax payers’ money, annually, into an industry that has busied itself with arm-twisting the public through exorbitant and often arbitrary charges as ‘electricity bills,’ in the name of subsidy on the one hand, while on the other, blackmailing government into parting with subsidies.
The concerns are further fueled by clear signs that the national economy has been wobbling, while in electricity power sector, the players, who ought to focus on ways of improving power supply, known to have potentials of stimulating economic recovery, seem well focused on exploiting the loopholes in the agreements with government instead of concentrating on developing the industry.
The manifestation is that they have inadvertently left the turf for the competition or been marketing rival solutions providers by neglecting power supply (generation and distribution), and quality customer care.
So, diverse segments in Nigeria, with households, corporates of all shapes, sizes and sectors are now being compelled to resort to alternative sources for power supply, with solar, inching in and gaining ground at an alarming speed and scale.
Chief Executive Officer, Elohim Solar, Olusola Ayobami, said that households and businesses were increasingly resorting to solar and inverter to meet power needs.
He said, “We have noticed that people are discovering the effectiveness of the alternative electricity power solutions, which we offer.
“The middle class households are embracing solar. There are instances of people opting out of the national grid, after finding the solar solution more reliable and cost effective.”
Ayobami observed that continuous innovation would only make the alternatives more affordable and durable, as manufacturers of inputs were focused on getting more people to see value in the offerings.
He disclosed that at the moment batteries which lasted for five years and above could be said to be least durable of all the parts used in assembling solar electricity.
“Many Nigerians see no reason why the government should continue pouring N360bn of tax payers money, ANNUALly, into an industry that has busied itself with arm-twisting the public through exorbitant and often arbitrary charges as ‘electricity bills,’ in the name of subsidy “
Other items, like panels are manufactured with lifetime service in mind, he disclosed.
He encouraged people to look beyond the initial cost of acquisition and consider the numerous benefits solar and inverter confer on customers.
The President of the Nigerian Association for Energy Economics, Prof. Yinka Omorogbe, sounded a note of warning that stakeholders must take energy transition and movement towards net zero carbon very serious.
She opined that Nigeria must take steps to align with the global trends.
Appearing to address a broader horizon, she said, “Africa abounds in energy resources – coal, bitumen, crude oil, natural gas, solar energy, wind, tidal and wave energy, as well as geothermal energy.”
In what sounded like a direct response to where the electricity companies in Nigeria were paying attention to or channeling resources, she expressed concern that it had turned to a paradox of poverty in the midst of plenty.
She likened the situation to what obtained in the oil and gas sector. “Again, unfortunately, Nigeria has not only come to epitomise the paradox of poverty in the midst of plenty in the energy sector but also has the strange revenue-draining paradox of being both a major exporter of crude oil and a major importer of petroleum products which are subsidised at a cost that the nation cannot afford.”
An entrepreneur, Yemisi Oduwole, observed that the situation might get complex if government made good the plan to stop the N360bn annual subsidy to electricity companies.
Oduwole, an engineering consultant, pointed out that the initial rivals of the distribution segment, was the generator.
She said, “Curiously, the cost of running a power generating set has become prohibitive because of the cost of fueling it. The risk of running power generating sets due to frequent malfunction that might lead to fire outbreaks, is also a factor for the public.”
On what is emboldening the Discos, she expressed concern that they had yet to wean themselves of dependence on government and the civil service mentality.
“The Discos would have factored in the weaknesses of the electricity power generators into their antagonistic approach to marketing and doing business generally. What they are losing sight of is the more potent rival, the solar segment,” she added.
She pointed out that while the rivalry posed by the generator was weakened by high cost of fuel, high risk of fire accidents and noise pollution, the solar and inverter were filling the void, and for good reasons.
“I will encourage whoever can afford it to go for solar power. The advantages are enormous. First, it is environment friendly. Then it is durable, convenient and comparatively safer than both the national grid and generator,” she said.
She wondered why major investors were not investing in that field with only MTN Nigeria and Total Nigeria Plc being the notable businesses to have ventured into the segment, though marginally.
“The opportunities are enormous,” she observed, and pointed out that “only a strategic exploitation of the segment would be a wake-up call for the Discos, as presently constituted.”
It seems apparent that the lure of subsidy is not just encouraging lax investment and callous marketing approach by both Gencos and Discos but discouraging wealthy investors from exploring the alternative power supply segment in Nigeria.
However, The Point’s investigations revealed that it would be life threatening for the traditional power sector players to continue dosing, as they currently appear to.
The Chinese have identified the potentials and are working hard to take the market through alternative sources of power generation and supply to support households and the economy.
The Point gathered that Chinese companies had perfected a strategy of setting up manufacturing plants across the world, in a way that enabled them take advantage of reputational location, economy of scale and branding by locating plants at different countries to serve the global market.
“Our findings revealed that in the average Nigerian household, for mere fear of exorbitant electricity charges, air conditioners are permanently switched-off, fans are put on sparingly”
Ayobami and Oduwole observed that the days when public power supply source was the main were quickly fading. People are now using solar as main source and public power supply as back up, both at domestic and commercial levels.
… And Nigerians adapt to cope
In the wake of antagonistic customer service and marketing by the electricity distribution companies, Nigerians have gone inventive in sourcing and consuming electricity.
An electricity power consumer in the Shangisha area of Lagos, Obande Obajuwa, who spoke to The Point, said, “A lot of people have resorted to carefully calculating units of power consumed to ensure that it tallies with budget, particularly, at household levels.”
He noted that the choice of controlling cost of power consumed by discretion was limited to those lucky to have pre-paid metre installed.
“The opportunity of controlling consumption costs only applies to those lucky enough to have acquired the pre-paid metres,” he added.
On the fate of others, he said, “Those yet to get pre-paid metres are resorting to lobbying power distribution company officials for friendly bills or some kind of compassion, which is hard to come by.”
“Another thing that is clear is that several Nigerian households have gone into the mode of rationalising electric power consumption with rechargeable household items being preferred.”
From an aggregate of several opinions sought by The Point, the self-regulation mode of consumption is now prevalent in families and small businesses. It is characterised by refraining from use of high power consuming household items like air conditioners, electric irons, washing machines, refrigerators, televisions, fans and the regular electric bulbs.
What now holds sway include use of rechargeable and energy saving bulbs, and other household items like fans and alternative light (torches, lamps), radio and fans.
Some households sampled by The Point disclosed that they had made the decision to retire expensively assembled household appliances like air conditioners, refrigerators, electric irons, cookers, ovens, fans and television sets.
Our findings revealed that in the average Nigerian household, for mere fear of exorbitant electricity charges, air conditioners are permanently switched-off, fans are put on sparingly, television sets are switched-on and off with caution, while rechargeable and energy saving bulbs, which cost a fortune to acquire, are preferred.
Most families are just focused on getting-by.
Those who can afford or are totally put-off by what is widely considered as the atrocities of the power distribution companies are resorting to the alternatives of solar or inverter.
However, they complained that the cost of acquiring solar and inverter is exorbitant.
