Reflections from Maine: Energy, Environment, Climate Change and Rights – 1

By Okafor Akachukwu 11/10/2017

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Maine is not popular with many people from Nigeria and Africa who visit for education, business or tourism or among many Nigerians living in the United States. It is officially the whitest state in the United States. Even amongst Americans it is not very popular, yet the most Northeastern state in the United State is well known for its lobster, lumber, pulp and paper industry, maritime history, rocky coastlines, beautiful spruce islands of Acadia National Park the northeastern most United States state known for its lobster, lumber, pulp and paper industry, maritime history, rocky coastlines, spruce islands of Acadia National Park. It has the 4th longest coastline in the US, 2nd after Florida on the East Coast and longer than the coastline of California.

As much as these are interesting features that may attract you to visit Maine someday, my six weeks of public management training at the University of Maine as a Mandela Washington Fellow which offered me extensive and diverse engagement across the state left me with much to reflect upon. Within the contexts of energy, environment, climate change governance and the politics of rights, sovereignty and movements, I found deep similarities with the struggles we face here in Nigeria and others that we may soon start facing.

Maine is 97% forested, being the largest forested area in the US with a once thriving lumber, pulp and paper industry. Its economy grew, citizens prospered as the jobs rolled in, while its rivers, environment and biodiversity suffered tremendously pollution and extinction from the growth and prosperity. The Penobscot River (the longest river in Maine) was used for log driving, a practice that meant that people couldn’t use the river for transportation, fishing and other forms of sustenance and recreation. Soon dams were built to control the flow of the river for better log driving and as hydroelectricity become the choice for electricity production, more sections of the river were dammed to power the paper mills. These dams became obstructions that endangered 11 species of migratory fish particularly the Atlantic Salmon to the Penobscot River. The livelihood of the Penobscot Indian Nation was threatened. The chemical waste from the paper mills caused even more problems, the remaining fishes in the river died, those that survived and adapted had chemical concentrations that were unsafe for human consumption. The rivers of Maine fast became stenches.

By the 1960s, Androscoggin River had become one of the most polluted rivers in the United States from the toxic chemicals discharged from paper mills and other industries on its bank. However, with the Clean Water Act legislation, clean ups started. The Clean Water Act protected rivers in the United States from further pollution but didn’t reverse the impact on the biodiversity particularly the fishes. The dams along the Penobscot River provided cheap electricity for Maine while the extinction of migratory fishes remained a huge concern., Fortunately the purchase of all the dams by a power company in 1999 provided an opening through an innovative river restoration project called the Penobscot River Restoration Project to rebalance fisheries population, plus hydropower production in Maine’s largest watershed.

The Penobscot River Restoration Project was designed to explore the development of a comprehensive solution to many issues regarding hydropower relicensing, migratory fish passage and ecological restoration on the Penobscot River. Two dams –  Great works Dam and Veazie Dam were removed, Howland dam was decommissioned and a fish bypass channel constructed. Power production was increased at six other sites, and fish passages improved at four dams. June 2016 marked the completion of this most innovative and unprecedented restoration project in the history of the United States which was achieved through painstaking commitment and exceptional collaborative effort among diverse stakeholders including the Penobscot Indian Nation, 7 conservation groups, 2 hydropower companies and several state and federal agencies. The tours of these dams and interactions with some of the actors that made the restoration possible caused me to think of what can be possible in Nigeria, the opportunities we are missing in finding solutions to environmental problems we face as and the growing concerns that we may be causing irreversible damage to our environment, biodiversity and ecosystem.

In Nigeria, the challenge is usually how to strike a balance amongst diverse competing interests and still achieve desired results. The Niger Delta has witnessed one of the most devastating environmental oil pollution in human history in the pursuit of energy resources that many argue has become a curse for Nigeria, while stakeholders are yet to devise a solution causing more harm to our environment, biodiversity and ecosystem. Just, like the Penobscot Indian Nation people, the people in the Niger Delta cannot benefit from its waters and land until it can effectively mobilize her people under one strong voice to demand restoration of its waters and land. Unfortunately, the riches of her land have continuously been used without the actualization of a restoration project. Yet government and policy makers are relying on her vast gas resources to significantly increase Nigeria’s deficient electricity generation capacity. On another note, government’s interest to increase Nigeria’s electricity output through coal power has started to create water and environmental pollution in the states where coal is being mined. What has proven difficult over the years or impossible is for government and the private business sector to prioritize the environment above tax revenues and profits. By their nature and structure, they cannot have the interest to protect the environment more than the people and communities that own these rivers and lands that are exploited and polluted, for whom these are their homes and sources of living. On another hand, these communities, civil societies and environmental groups are yet to learn how to build effective movements and collaborations to take on the huge challenges including fighting against these profitable and corrupt structures.

The devastation that dams have caused to the environment is well researched and known, however government is unwaveringly interested in financing large hydro projects – it has commissioned some of which are more than 10 years in construction and still plans on building more for both agricultural and hydroelectric purposes. It is uncertain how these dams will adversely affect the environment and biodiversity and impact on climate change. The rights and livelihoods of the local communities and other ecological concerns where these dams are sited are not given considerate priority. With chemical pollution of water bodies, land, and destruction of ecosystems from coal mining and dams one wonders how these communities will survive, especially in the coming years with severe climate change and the impacts of drought, and dwindling water resources. The expected result will be a destabilization which will converge with climate change impacts in addition to other human induced and naturally occurring events that will defy immediate and lasting remedies.

With the Niger Delta, the worst is yet to happen as the region is still polluted, with no infrastructure in place and no significant efforts to fix these problems even as the world is signaling an end to the use of fossil fuels in the next few decades to help fight climate change. So where will the resources to fix, remedy and restore the ecosystem in Niger Delta and communities where coal is currently being mined come from? Where will the will power and commitment come from? Will there ever be a moral burden or committed resolve to solve the problem? How can we lead strong and effective collaborative efforts to follow through innovative restoration projects such as the Penobscot River Restoration Project? These are questions we must urgently find answers to.

 

Okafor Akachukwu is a 2017 Mandela Washington Fellow (Public Management, University of Maine) and a Science Policy Research Unit (SPRU), University of Sussex trained Energy Policy, Innovation and Sustainability Expert. Email: akachukwu_okafor@yahoo.com

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Lessons for Nigeria from Kenya’s Solar Ecosystem

By Okafor Akachukwu 30/05/2017

Kenya Solar

Kenya’s renewable energy market and ecosystem particularly for solar energy (off grid solar PV and solar home systems) is unarguably the most successful in sub-Saharan Africa and the world. It has one of the largest per capita markets in the world – its level of product development, penetration and growth, consumer base, use of innovative solutions especially smart metering and mobile payment systems, and efficient customer service has remained a subject of learning in the sector, particularly for other African countries.

In a previous article, I highlighted Nigeria’s poor energy policy environment compared to the other 110 countries that were studied for the Regulatory Indicators for Sustainable Energy (RISE) report. What I did not highlight is that Kenya is the only sub-Saharan African country that scored tops for all three categories – energy access, energy efficiency and renewable energy. The other countries in the developing world that scored highly in the three categories were India and Sri Lanka. Compared to Nigeria’s overall score of 22, 11 and 29 for energy access, energy efficiency and renewable energy respectively, Kenya’s scores are 82, 48 and 63 respectively. Easily observed is the fact that Kenya’s phenomenal solar market development is reflective of a good and enabling sustainable energy policy environment. What this means is that the huge success of Kenya’s solar market is a result of deliberate government and development sector policy interventions that align and connect with other market interventions and activities.

This corroborates the findings of a research team at Sussex Energy Group (Science Policy Research Unit at the University of Sussex, United Kingdom) which provided a clearer understanding of what has contributed to Kenya’s success. They argue that hardware financing – financial investments in the demand and supply sides of solar technologies – and private sector entrepreneurship focusing on investing venture capital in entrepreneurs to drive and grow the market at the micro economic level, are not the only contributors to the Kenyan success as many have long believed. Rather the success was as a result of policy interventions that understood the need for a systemic approach in nurturing innovation and technological change through policy. This systemic approach leads to interventions in a wide range of areas that is generally regarded as creating an enabling environment.

The question is how can policy interventions help create the enabling environment that is required for the kind of success that Kenya has achieved? The authors argue that the overall goal of policy must be to build functioning socio-technical innovation systems that add to other efforts for the transfer, development and diffusion of sustainable energy technologies that meet the needs of all groups of consumers. Goals of policies and interventions must intentionally (1) build networks of diverse stakeholders; (2) foster and share learning; (3) promote the development of shared visions; and (4) support diverse experimentation. Two examples of how these can be achieved are the creation of sustainable energy access relevant innovation-system builders (SEA-RIBS) and using projects and programmes to build socio-technical innovation systems. The system builders are the institutions, including national and international companies, agencies, donors, networks, groups and financial institutions, that work to provide and improve relevant energy access support which may be needed in the implementation of relevant energy access projects and programmes.

In Nigeria, the mandate to lead energy access interventions – projects and programmes especially for rural areas – falls on the Rural Electrification Agency (REA) which is leading government’s effort to electrify rural communities in Nigeria. Unfortunately, in the recent past, REA has failed to provide the leadership that is required of it. Its projects and programmes funded through the Rural Electrification Fund (REF) have failed to build networks of diverse stakeholders, foster and share learning, promote the development of shared visions and support diverse experimentation. Projects have been treated more like a transactional activity than an experimentation and development activity to support learning that will help build systems. Recently, some stakeholders in the renewable energy sector especially project developers, have expressed their displeasure over the contract awarding process in the agency. For instance, the bill of quantities for some of the projects advertised by the agency does not meet industry standards and therefore cannot be executed, even if the projects can work with little or no challenges. The fear is that if solar projects are implemented based on a bill of quantities that are not standardized, not only will the projects fail to deliver on expectations, they will most likely breakdown within a short timeframe, which will start a bad story for solar technology. Project developers in Nigeria are already doing their best to change the bad image given to solar technology over the years due to badly implemented government solar projects. To invest 2 billion Naira of the Rural Electrification Fund on projects which are likely to breakdown in a short time impedes and reverses the efforts of the renewable energy sector to use solar energy to improve energy access in Nigeria. The agency must look at itself as the leading sustainable energy access innovation-system builder who must consciously look at its mandate as not just electrifying rural communities but also building a socio-technical innovation systems. This should be done by applying a broad systemic approach to the way it interacts with other stakeholders, designs and implements policies and interventions.

It is interesting to note that recently, the Federal Government inaugurated a new board for the Rural Electrification Agency whose Executive Director (Rural Electrification) is Dr Sanusi Ohiare, who holds a PhD in Rural Electrification. As my friend and colleague, I have reminded Dr Ohiare of the enormous responsibility that he has on his shoulders to ensure with the rest of the board that the right things are done at the agency to help build a sector that is resourceful in effectively meeting its mandate. One that is efficient in assisting to create an enabling environment for energy access and building a renewable energy sector and market that is successful. It is my earnest hope that the new board understands that its projects, programmes, policies, interventions and activities can make or mar the actualization of universal sustainable energy goals in Nigeria and beyond.

 

Okafor Akachukwu is the Energy and Environment Editor, The Initiative for Policy Research and Analysis (InPRA) and a Science Policy Research Unit (SPRU), University of Sussex trained Energy Policy, Innovation and Sustainability Expert. Email: akachukwu_okafor@yahoo.com

Promoting a sustainable energy policy environment in Nigeria

By Akachukwu Okafor 28/04/17

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Sometimes I wish that Nigeria’s power sector challenges are solved so that I will have less to write on, but this seems not to be happening as issues keep arising in this large and troubled electricity market with its various actors and stakeholders.

After my last publication on the feasibility of the power sector recovery plan, I received several messages from key sector players including from a diplomatic mission commending the article’s insightfulness and asking that I share a copy of the recovery plan if I had it. At the time the last article was published, I did not have the plan and my preliminary analysis was based on the media briefing by the Minister of Power after the approval of the plan. However, I have obtained the plan now and I hope to further analyse the plan based on the specific programmes it hopes to embark on. The feedback I found most interesting was from a former Chairman on the Technical Committee of National Integrated Power Project (NIPP) who was not happy that I did not emphasise how DISCOS, in truth, collect a lot of revenue, but turn around to claim to other market players that they collect little and are operating at a loss. He described DISCOS as the problem of Nigeria’s electricity sector for not remitting revenue and refusing to invest in upgrading their infrastructure.

I promised to be more critical of all players in the sector especially DISCOS as I have always been (and as allowed by word count – it will take not less than a 5,000 word article to analyze how DISCOS are a big problem for Nigeria’s electricity sector). I still do not understand how the government strongly believes that DISCOS operate two accounting books and yet, have not taken appropriate and necessary actions to ensure that they are more transparent and accountable. This lack of transparency and accountability helps in the low revenue base of the power sector which starves it of the finance it critically needs for reforms and recovery programmes. Interestingly, these and other issues including enforcing corporate governance from power sector operators, enforcing market discipline, developing a coherent strategy to resolve militancy and making a definite policy statement on tariff are among sector issues that the World Bank listed as conditions for the release of $1 billion needed to help fund power sector programmes.

Speaking of definite policy statements, according to a World Bank global scorecard for policy makers which compares the national policies and regulatory frameworks for sustainable energy amongst different countries, Regulatory Indicators for Sustainable Energy (RISE), February 2017, Nigeria ranked amongst the worst countries with regard to enabling policy environment for energy access, energy efficiency and renewable energy. Of 111 developing and developed countries studied which represents 96 percent of the world’s population and energy consumption, Nigeria scored very low for the three categories. For energy access, Nigeria ranked 10th worst country ahead of Liberia, Yemen, Mauritania, South Sudan, Sierra Leone, Chad, Haiti, Central African Republic and Somalia in that order. Countries that performed better than Nigeria include – Afghanistan, Congo Republic, Madagascar, Ethiopia, Eritrea, Niger, Togo, Sudan, Honduras, Mozambique. For energy efficiency, Nigeria was ranked 8th worst ahead of Somalia, Mozambique, Chad, Loa People Democratic Republic, Mali, Mauritania, Congo Republic while Niger, Central African Republic, Liberia, Vanuatu, Solomon Islands, Yemen, Burundi, Myanmar, Maldives, Haiti, Zimbabwe, South Sudan were among 12 countries that performed better than Nigeria. On the renewable energy category, Nigeria was ranked 21st ahead of Somalia, Haiti, Sierra Leone, Eritrea, South Sudan, Niger, Mauritania, Bahrain, Liberia, Congo Rep while Uzbekistan, Mozambique, Benin, Burkina Faso, Saudi Arabia, Kuwait, Cambodia, Congo Democratic Republic, Qatar were listed countries that performed better than Nigeria.

Although Nigeria’s renewable energy score improved by over ten places when compared to energy access and energy efficiency it was still 4 points below the indicator score mark for low performing countries. Nigeria’s performance on this scorecard will not come as a surprise to people with a good understanding of the energy sector in Nigeria. Space will not allow me analyse the report in detail. For instance, on the energy access category, Nigeria’s overall score for energy access was 22 and 0, 0, 17, 35, 22, 100, 0, and 0 for existence of plan, scope of plan, grid electrification, minigrids, stand-alone systems, affordability, utility transparency and monitoring, and utility credit worthiness indicators respectively. The most interesting aspect of these indicators is that consumer affordability of electricity scored 100 which is an indication that electricity consumers can afford to pay the cost of electricity.

This situation seems to be well understood by government and key electricity market players which may be what the Nigerian government is exploiting in its continued push for a cost reflective tariff for the market. However, consumer affordability of electricity is clearly different from willingness to pay for electricity which is one of the challenges that the grid sector is facing. The problem of willingness to pay borders on social issues of distrust with public utilities and citizens’ perception of government’s role in providing utilities which is mostly informed by politicians’ election campaign promises. The scores of the other indicators means that government has a lot to do in making the right policies and setting the right regulatory frameworks for an enabling environment that accelerates sustainable energy access.

On energy efficiency, Nigeria’s overall score was 11 out of 100, and this equally doesn’t come as a surprise especially when policy makers are not knowledgeable about their responsibilities to the sector. For instance, the Senate Committee Chairman on Power, Senator Enyinnaya Abaribe while responding to a question on how energy efficiency in Nigeria can be increased said that it is the job of energy efficiency appliance vendors to educate Nigerians on energy efficiency as it is not the job of government to lead energy efficiency programs, or in extension make enabling policies.

Unfortunately, the Nigerian Electricity Regulatory Commission (NERC) which should be helping policy makers better understand the sector which they are to make policies for and also supervise are not doing enough. A check on the capacity building programmes designed for legislators will reveal that most of the capacity building programmes are not specifically designed for policy makers in Nigeria’s difficult regulatory environment. Most capability building programmes are via sponsorship to international conferences that will add little or no knowledge for making the right country-specific power sector policies. The legislative committees, relevant government ministries and departments and agencies on power also lack experts who should help in crafting the right policies asides other capacity, institutional and bureaucratic challenges that trouble the sector.

Renewable energy is performing better than other categories; however, there are a few practices by some project implementing stakeholders especially government energy agencies and projects that are not only unhealthy for the immediate growth of the sector, but which will in the medium term, help destroy the progress being made by other stakeholders. These practices include poor design of projects, wrong costing of projects and lack of transparency in procurement and contract processes which lead the implementation of projects that fail within a short time. This gives a bad name to renewable energy technologies and products. To help promote sustainable energy in Nigeria, government must do what is necessary, not just in formulating enabling policies and regulations for growth but to ensure that these policies are implemented and enforced appropriately in line with best practices. While government and other stakeholders are working towards creating a more enabling sustainable energy policy environment, consumers must realize that they hold the power to wheel the ship of policy in the direction they desire, which can only happen when consumers effectively engage with the policy and regulatory making processes.

 

Okafor Akachukwu is the Energy and Environment Editor, The Initiative for Policy Research and Analysis (InPRA) and a Science Policy Research Unit (SPRU), University of Sussex trained Energy Policy, Innovation and Sustainability Expert. Email: akachukwu_okafor@yahoo.com

 

The feasibility of the power sector recovery plan

By Akachukwu Okafor 06/04/2017

Trasmission

From a preliminary analysis of the recently developed power sector recovery plan approved by the Federal Government, it is not a feasible recovery plan in the medium and long term. The measures are designed as interventions to stabilize the collapsing power sector rather than help it recover. The plan will not effectively solve the liquidity problems in the sector and the cost reflective tariff only a measure that might further throw the sector into challenges if other measures are not planned for and implemented synchronously.

The power sector recovery plan comprises a wide range of pet policy actions, operational and financial interventions which intends to help improve transparency, service delivery, performance of DISCOS, transmission companies and the entire value chain. In specific terms the plan provides for simplifying and reducing the cash deficits in the sector; how to make the DISCOS viable, accountable, responsive to customers and to ensure stability of the grid and expansion of the grid and transparency and communication within the sector, in addition to how to improve sector governance and the quality of personnel on the board of the DISCOS. Other provisions of the plan include addressing access to renewable energy using mini-grids and stand-alone solutions and implementing solutions that have been developed for 37 federal universities and seven tertiary hospitals as well as stopping the vandalization of gas pipelines which will help stimulate appetite for investment in Nigeria’s power sector. These measures sound brilliant in theory, how they will be effectively operationalized remains to be seen or made public.

Direct financial interventions to solve institutional and organizational incompetence – gap in skill, knowledge, capacity and capabilities and problematic perspective of the system is not an effective way of solving market failure challenges. For instance, the liquidity problem being experienced in the sector is mainly due to DISCOS unwillingness to make the necessary investments to reduce their aggregate technical, commercial and collection (ATC&C) and entire system losses. I was recently informed by a power sub-station duty engineer that he has over 50MW of power sitting on his substation, but the DISCO in the area only accepted to collect 14MW. The result is that the remaining 36MW will waste and because it was generated, and must be paid for somehow. He further said that DISCOS preferred to accept a small fraction of what is allocated to them and leave the rest with Transmission Company of Nigeria (TCN), while they charge the customer the ‘fixed charge’ of being connected on the grid with or without electricity. This practice is said to be more profitable to DISCOS as they don’t need to share their earning with anyone. Liquidity challenges in the sector cannot be solved when key system players are involved in rent seeking practices. It is difficult to see how government plans to simplify and reduce the cash deficits in the sector by approving a Power Assurance Guarantee of N701 billion Naira for Nigeria Bulk Electricity Trading (NBET) to pay GenCos for gas supplies from this year to December 2018 when there is no plan that equally guarantees that the funds will be collected within the market by DISCOS. How subsequent power guarantees to GenCos beyond 2018 will be secured not yet known.

Making DISCOS viable, accountable, responsive to customers is more of what government wishes that DISCOS do but not what they can be in the near term. It is public knowledge in the sector that DISCOS are grossly incompetent in managing their asset, delivering quality service and have consistently refused to do so. Part of their poor attitude has been traced to how the privatization was handled. The Minister of Power in May 2016 during the presentation of a roadmap for solving the power crisis argued that cancellation of contracts and reversing privatization initiatives sends wrong signals to investors and past reversals failed in solving the problems that caused their cancellations and reversal. However, the Minister has failed to point out that these reversals failed because the process of initial engagement, reversals and renegotiations to correct previous problems are flawed by illegitimacies, lack of transparency and ridden with outcomes that satisfied the selfish interests of powerful and influential actors in the sector. I believe that investors would be happy to see reversals and reprivatisations that are transparent and are in accordance with provisions of the law and international best practices.

There are indications that there are other financial interventions asides the N701 billion Naira planned (or budgeted) for the sector which might be in the form of subsidies and introducing a cost reflective tariff that will help reduce the cash deficits. These were positions advocated by the then acting chairman of Nigeria Electricity Regulatory Commission (NERC), Mr Anthony Akah in January this year, and hinted on by the Minister of Power while briefing newsmen after the approval of the power recovery plan. The Senate Committee Chairman on Power, Senator Enyinnaya Abaribe, while answering at a public dialogue before the approval of the recovery plan, advised government to carefully determine if it is power or petrol that it must subsidize and warned that government should not give money to DISCOS. Subsidies have never worked in Nigeria; it has always been a scam. It doesn’t exist. Even when it exists it doesn’t benefit most of the population. It benefits only the rich and vested interests. Subsidies for the power sector will only elongate and complicate Nigeria’s power sector difficulties. Government should rather embark on a sector wide campaign to enlighten electricity consumers on the positive effects of not subsiding power or petroleum products on the economy and provide a plan to help stabilize and manage the short term economic difficulties that will arise. Subsidising power is not part of the solution, rather DISCOS should invest in upgrading its distribution network to reduce ATC&C losses and improve its collection measures to capture more consumers who currently do not pay for electricity consumed. There are suggestions that the business model that the DISCOS currently operate is a model that collects revenues from willing-to-pay-consumers, while unwilling-to-pay-consumers are not targeted to pay for power consumed. The proposed cost reflective tariff which is really an increase in tariff should be put on hold while government and DISCOS develop and implement a plan that ensures that all consumers that use electricity pay fairly for what they consumed. The inefficiencies in the systems especially on the part of DISCOS should not be passed on to consumers who are not protected by the system. This I believe will help solve the cash deficit problems in the sector. Government should not subsidize electricity and should also not increase tariff, unless an increase in tariff is a deliberate measure by government to push people off the grid for renewable energy alternatives – which is a brilliant measure. Unfortunately, this is not what the government plans to achieve. Perhaps a more careful study and understanding of how the market i.e. consumers will respond to the introduction of a cost reflective tariff is what government should be interested in at this moment, so that it doesn’t create more problems for the grid sector. That said, it must be made clear that an increase in tariff may increase energy efficiency (EE) measures, especially by commercial consumers that are more likely to access finance to implement energy efficiency mechanisms. Also, pursuing an energy efficiency plan is a more conscious consumer and policy driven plan which only informed consumers will be willing to take, even though there may be difficulty in change of lifestyle and business process.

Energy efficiency is an energy demand reduction mechanism that is missing in the power recovery plan, at least from the briefing that the Minister of Power gave. This has the capacity to increase the number of consumers that are served by the same quantity of energy that previously didn’t serve a lesser number. An Energy efficiency plan being included as part of the power sector recovery plan is an opportunity to link the recovery plan to Nigeria’s energy efficiency contribution in her Intended Nationally Determined Contribution to the Paris Agreement which is a 30% energy efficiency improvement by 2030, which is a measure that will help attract investments. The structure of the current mini-grids regulation is part of measures that will not effectively assure a quick power sector recovery. These and more I would be analysing in the future.

 

Okafor Akachukwu is the Energy and Environment Editor, The Initiative for Policy Research and Analysis (InPRA) and a Science Policy Research Unit (SPRU), University of Sussex trained Energy Policy, Innovation and Sustainability Expert. Email: akachukwu_okafor@yahoo.com

Fixing the broken pieces of Nigeria’s electricity market – 1

By Okafor Akachukwu 13/03/17

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Nigeria’s power sector is broken, collapsed and needs fixing as many power sector headlines in the past few weeks have suggested. In this year alone, a Punch January 22 caption reads “[Nigeria’s] Power System Collapses Four Times in Five Days”. A THISDAY caption on the same January 22 says “The Perennial Power System Collapse” Two days before January 22, ESI Africa reported that “Nigeria’s Electricity Generation keeps Plunging”. On January 12, Guardian reported, “Power generation drops by 207.1 MW on gas shortage”. The trend of the reportage indicated no improvements which must have necessitated Abuja Electricity Distribution Company (AEDC) to make appeals to their customers over the disrupted power supply. The Ibadan Electricity Distribution Company (IBEDC) had to issue a statement to blame the Transmission Company of Nigeria (TCN) for the power cuts. On January 27, ESI Africa reported that electricity consumers in Onitsha choose to issue the Enugu Distribution Company with a 21-day ultimatum to improve power supply and also install prepaid meters. Then on January 27, ESI Africa reports that the sector regulator – Nigerian Electricity Regulatory Commission (NERC) is seeking government subsidy to rescue the power sector. Very recently on February 7, during a National Assembly workshop on power the President of Senate, Dr Bukola Saraki was quoted to have said that Nigeria power sector was on the “verge of total systemic breakdown” which he attributed to the sale of power Distribution Companies (DISCOs) to individuals and parties who had “no idea about running a proper power distribution business”. The power sector is not on the verge of a total systemic breakdown, it has actually broken down and failing further.

The failing of the power system/electricity market depends on who you ask, when and where. The DISCOs would blame the Transmission Company of Nigeria (TCN) for not allocating them adequate power to serve the customers as well as some of the customers for electricity theft and billions of unpaid electricity bills by both government and private. Government and GENCOS (Generating Companies) blame inadequate gas supplies to thermal plants for low power generation. TCN blame GENCOS for low power generation to transmit to DISCOS and Nigerian Electricity Supply Industry (NESI) for billions it owes it. National Electricity Regulatory Commission on its own thinks that a review of the electricity tariff is due to ensure that tariffs are cost reflective and that the sector is in need of subsidy from government. Some politicians and technocrats think that the privatization of the sector needs to be ‘reviewed’ – whatever that means has to do with the political economy of the sector. Consumers on their part blames President Buhari, the Minister of Power, and DISCOS – who have preferred to be ineffectual in areas they could be very effective. DISCOs have turned themselves into the power sector’s un-cautioned bullies, and NERC has equally failed to prevail them and other actors in the sector to conduct business appropriately. Several deadlines issued by NERC to DISCOS to install prepaid meters for customers (many of whom have paid for these meters) have not been met with February 28, being the latest deadline. Consumers now group themselves in different ways that seem right to them to find solutions.  How else do you know a market that is broken and failing if not by these swarming challenges?

As depressing as the tale of the power sector is especially with continued drop in gas supplies to power plants, the Minister of Power, Mr Fashola has confidence that a policy that leads to more gas plants would be what will fix the system in terms of generation challenges. Asides, challenges with vandalization and liquidity that have adversely affected supply of gas to power plants, there is a looming threat to further development of Nigeria’s gas resources that will guarantee adequate supply of gas to our power plants. Recently, Christopher Akor of Business Day called the nation’s attention to a surreptitious attempt by the National Assembly to amend the Nigeria Liquefied Natural Gas (NLNG) Act that will mandate the company to remit 3% of its annual budget to Niger Delta Development Commission (NDDC). This move is not in the interest of Nigeria’s national energy security. Government has many ways to increase NDDC’s funding base than to further tax NLNG.

It is not surprising to hear about these moves especially when Nigeria’s Energy Commission independently develops Nigeria’s Energy Master Plan, Ministry of Petroleum Resources (MoPR) and Ministry of Power (MoE) are independent ministries and have their different ideas of how the sectors should be ran and for what purpose.

To MoPR, Nigeria’s gas is for export to earn foreign exchange, to MoE, ‘gas would help solve the power problem, maybe we should talk with MoPR to see what can be done’. Then policy makers turn around to say more tax and contributions need to be extracted from the gas sector to fund activities that can be adequately met by other means. What government should be doing at this time is to make development of the gas sector as attractive as possible. For Nigeria’s vast gas reserves to contribute in any significant way that will help solve Nigeria’s power needs especially in the long term, the Department of Gas at MoPR must rise beyond “overseeing” NLNG, West African Gas Pipeline (WAGP) Project, Trans-Sahara Gas Pipeline Projects and other projects it may have entered into and work to ensure that Nigeria’s gas is harnessed for the country’s power needs. The Directorate of Gas and Power at the Nigeria National Petroleum Corporation (NNPC) must also do more than “monitor and support” all LNG and Independent Power Producers (IPP) Projects in Nigeria. Government has to find ways for ministries, departments, directorates, agencies, commissions that work in the energy and power space to work as close knit as possible.

While Nigerians wait for Nigeria’s gas to be turned to power, there has to be new and quick to deploy solutions and alternatives such as renewables – solar, wind, biomass, biofuel, waste, hydro which are solutions and alternatives for today and the future. Government has to recognize and believe that these are feasible and practical solutions and alternatives. The Minister of Power’s view that renewables are not a solution but an alternative is problematic and does not help government in planning and policy development. Renewables on their own are however not “the” solution even when combined with power from gas. Solving other problems around energy efficiency, social, financial, technological, political, organizational, institutional and market services issues are part of the solution for our very complex and complicated electricity market. It is true that the current high forex rate in Nigeria and other factors including high duties, taxes and fuel subsidies adversely affect an accelerated uptake of renewable energy solutions particularly solar. What I see as the most important and key factor that will help fix Nigeria’s electricity market is a successful business model for renewable energy consumer financing. This will disrupt the market in ways that were never thought possible and will force the Nigerian government and other actors in electricity market to get their act together. Renewable energy entrepreneurs must continue to work hard to get this done.

 

Okafor Akachukwu is the Energy and Environment Editor, The Initiative for Policy Research and Analysis (InPRA) and a Science Policy Research Unit (SPRU), University of Sussex trained Energy Policy, Innovation and Sustainability Expert. Email: akachukwu_okafor@yahoo.com

 

 

Recurring Energy issues and developing a Strategic Niche Management Approach for the energy sector

By Okafor Akachukwu |05/01/2017

It is not news any longer that President Buhari presented the 2017 appropriation bill to a joint session of the National Assembly. What you may not have heard or which will come as a surprise if you have is the sum of N65 billion appropriated for the presidential amnesty programme. This is quite a huge sum, and no doubt every failing whether on the part of government, Niger Delta people or the oil companies operating in the Niger Delta since 1956 comes with real life consequences. The huge loss in oil revenue and power outages this year was mostly attributed to the activities of militants in the Delta. In this year also, government launched the Ogoni Clean-up which is estimated to cost USD 1 billion and 30 years to fully complete, however a lot of places in the Delta and oil producing areas remain to be cleaned up.

With the past events in the region since the turn of democracy in 1999 till date, we are yet to learn our lessons as a country. We seem to be more concerned about meeting our economic and financial needs without thought to the more costly socioeconomic and environmental consequences that normally follow. Where am I going with this? As I have always written, The Federal Government of Nigeria aims to meet 30% of its energy needs by 2030 from coal. What I haven’t said in my writings is that the coal to be used for this proposed generation would not be imported from abroad; they will be mined in Nigeria. If we do not know, coal mining and burning is highly environmentally – air, water, soil polluting. Particulates and chemicals that are released into the environment include Sulphur dioxide, Nitrogen oxides, Hydrogen Chloride, Hydrogen Fluoride, Arsenic, Cadmium, Mercury, Dioxin, Chromium, which are all known to be very toxic. A preamble of the devastating effects of coal mining is already being set in Okobo and Itobe communities of Kogi State. But we seem to enjoy going through the cycle of environmental, security, and socioeconomic challenges with managing our natural resources.

In the last edition (Aug-Dec, 2016; Vol.2 No. 3) of Powerwatch, a quarterly publication of the Nigerian Electricity Regulatory Commission (NERC), Dr Abdulsalam Yusuf, an editorial board member of the publication did a good job of highlighting the energy potentials of coal power for Nigeria and the challenges it faces with securing financing – which are all sector wide established facts. However, Dr Yusuf failed to mention that coal power comes at huge costs. I would have ignored this, but coming from an official publication of the sector utmost regulator, it should be an issue of grave concern to stakeholders and the general public who will get to face and bear these consequences when they finally come. In my November 30 publication titled “The impatience with grid electricity and our energy future”, I asked some questions which should form the basis our debate and dialogue on the coal power. “…2.) How prepared are our regulatory agencies especially the environmental agencies to ensure that the operations of this sector [coal power] comply with world best practices. 3.) What are the assurances that coal mining in host communities around the country will be protected from the toxic environmental [hazards] – air, water, soil pollution [which are] evident with coal mining, as is already the case in Okobo and Itobe communities in Kogi State. 4.) How prepared are the government and mining companies to solve the socio-economic, health challenges and possibly social unrest that may arise from the devastation in these communities?” As things are currently, the answers to questions 2 and 3 are obvious; the Niger Delta experience is a case study. The answer(s) to question 4 is relative considering the strategy that government, mining and coal power companies may decide to solve these problems when they arise. But before they do, this debate on coal power is due for an extensive public debate, and importantly a federal legislative hearing, so that the facts on coal power can be presented by all sides of the divide. We hope to start pushing for these policy making processes in the coming year. Nigeria can’t afford to continue taking chances with its future when there are many better and proven alternatives. I will not be weary of writing on these issues or demanding for a robust sector public dialogue until a clear and holistic path of our relationship with coal is established.

Earlier this month, it was reported that the immediate past Minister of Power, Prof. Chinedu Nebo and his engineering team invented an innovative fuel-efficient power generation system named ‘power-seed web machine’ which was presented to the Minister of Science and Technology, Dr Ogbonnaya Onu during a courtesy visit.  Prof Nebo stated that the machine is built to utilize only 20% of the amount of fuel needed by power generating systems to generate a kilowatt hour. Of interest to me is that Prof. Nebo said that the machine which has been test run would soon be deployed to select tertiary educational institutions in Nigeria to help meet their energy needs for one year before its commercialisation. This is a positive energy sector engineering – scientific and technological development which Dr Onu acknowledged and further pledged government’s support in protecting the invention and copyright abuse. Government’s support should not be limited to protecting the invention but also providing the enabling environment for inventions such as this to grow, successfully reach commercialization, wide adoption and diffusion. As I stated in a previous article (December 14 publication) titled “Scientific, technological and innovation capabilities required for an efficient energy system”, I listed amongst others that “education policy that aligns with development plans, foresight, right system regulation, technological spaces/platforms for interaction on various levels, use of demand stimuli – procurement to push for supply improvements and innovation, increasing capacity to absorb and use knowledge, building regional and sectoral systems of innovation, stimulating entrepreneurship and incubators” are required for Nigeria’s energy sector to become efficient.

The proposed plan by Prof. Nebo to deploy the fuel-efficient machines to select tertiary educational institutions is a good step in the right direction. However, this should not end with deployments to serve the institutions. Careful steps should be taken in collaboration with the team, institutions, and ministries of education, science and technology, power, petroleum resources to set up structures to engage in more in-depth and broad research and development on these technology and other related technologies, and capabilities to absorb and use knowledge across other sectors and ultimately develop a strategic niche management approach that will lead to a successful diffusion of this machine and other innovative sustainable technologies. I believe that the technical experts and administrators at these ministries understand these issues and will take the opportunity.

Okafor Akachukwu is the Energy and Environment Editor, The Initiative for Policy Research and Analysis (InPRA) and  Science Policy Research Unit (SPRU), University of Sussex trained Energy Policy, Innovation and Sustainability Expert. Twitter: @akachukwu Email: akachukwu_okafor@yahoo.com

 

Scientific, technological and innovation capabilities required for an efficient energy system

By Okafor Akachukwu 14/12/2016

In my November 15 article, titled “Derisking Nigeria’s electricity market for increased energy access”, I alluded to the Nigeria Bulk Electricity Trading (NBET) Company boss’s position that Nigeria cannot run nuclear and wind technologies for electricity purposes. I stated asides the huge financial cost of deploying these technologies, decommissioning and waste management, our inability to run wind and nuclear can only be understood “from a science, technology, and innovation capabilities and management perspective” which the scope of the article did not allow me go into. Today, I will provide more insight on this statement. This is not to say that wind and nuclear technologies have become high tech ventures in themselves as sending man to space. Actually it is much easier to send a man to space and back than to deploy wind and nuclear technologies and keep it running optimally for more than 40 years. The reason is that these technologies are hosted, embedded and operate within a very complex and complicated environment and sociotechnical – energy system that requires much more than the technological knowhow to be successful. And if an element or component of the system is missing, system failure is inevitable. Unlike decades ago, the increasing waves of socioeconomic, financial, environmental, political, technological and security challenges, particularly security vulnerabilities and instabilities, including cyber attacks – have made managing a nuclear facility more complex and complicated. The myriad of challenges seem to dwarf the challenges of scientific, technological and innovative capabilities, and are the first and principle factor for scientific and technological development and advancement.

Science, technology and innovation policy for socio-economic, scientific, and technological development and advancement is dynamic and changing from what we used to know. The linear model of innovation – Research and Development (R&D) and Regulation – was the dominant model in the 1960s-1980s. This model necessitated the United Nations Advisory Committee on the Application of Science and Technology to Development (ACAST) to develop a World Plan for the Application of Science and Technology for Development in 1970 for the Second United Nations Development Decade (1970-1979) – which produced the document that is widely known as the “Sussex Manifesto”. The essence was to produce a strategy that would help developing countries (Global South) build its own scientific and technological capabilities and move from acquiring technologies from developed North, to adapting technologies to local conditions and mastering them. This is widely referred to as “technology transfer” – and is still a huge controversial topic of debate in the climate change negotiations. An important part of the plan was that scientific and technological/technical services sector should receive several times more funds than what is invested in research. Today’s dominant model is the National Systems of Innovation (NSI) from the 1990s, which has come to stay, while the other- “Transformative Change” is an emerging model that researchers at the Science Policy Research Unit (SPRU), University of Sussex suggest. Many countries especially the Asian Tigers have exploited the provisions of these models to be where they are today. I which to use what happened in China particularly in its energy sector to highlight some practical lessons of how building strong scientific, technological and innovative capabilities can be instrumental to development.

In the 1990s when faced with growing energy demand especially for its manufacturing sector, Chinese government quickly set the right policies, incentives and R&D programmes called the 863 and 973 programmes. The objective, to gain mastery and localize supercritical (SC) and ultra-supercritical (USC) coal-fired power plants technologies, was clearly stated in the policies. With full government support – funding and right environment, Chinese firms acquired its first supercritical units in 1992 from leading international firms such as ABB and General Electric for boilers and steam turbines respectively. There were also research collaborations with Chinese regional design and research institutions headed by Chinese Thermal Power Research Institute (TPRI) in Xian and international firms such as Siemens, Hitachi and Alstom for the design of new coal plants. The outcome of these was that in 2004 China’s first domestically manufactured a supercritical unit with a total capacity of 600MW, which started service in Henan Province and between 2004 and 2007 China had installed 123.6GW of super-critical units. Ultra-supercritical technology (USC) also received significant attention. In 2000, China collaborated with Mitsubishi Heavy Industries, the Harbin Boiler Company and Siemens to acquire, adapt and improve USC technology. In 2006 China installed its first domestically manufactured USC unit in Yuhuan. In 2010, more than 100 USC units were on order from Chinese power companies. This was also replicated for integrated gasification combined cycle (IGCC) technologies. Starting with acquiring licenses from leading international firms such as Shell, TPRI learned the gasification technology and advanced it. Recently, due to higher efficiency of Chinese IGCC it beat competing Shell and General Electric IGCC technologies to win the bid for Good Spring IGCC in the US owned by EmberClear. Similar successes have been recorded for Solar PV, wind and nuclear technologies.

These successes wouldn’t have happened without strong scientific, technological and innovation capabilities built upon strategic research and development and regulation policies and mechanism and National Systems of Innovation that has specific national development targets to achieve. NSI requires having the right R&D policy, intellectual property rights (IPR) law that protects and encourages innovation, education policy that aligns with development plan, foresight, right system regulation, technological spaces/platforms for interaction on various levels, use of demand stimuli – procurement to push for supply improvements and innovation, increasing capacity to absorb and use knowledge, building regional and sectoral systems of innovation, stimulating entrepreneurship and incubators. Along with these, China made significant investments of over USD $50 Billion, and the same applies to technological advanced countries such as Germany, Demark, US, United Kingdom, Japan, Netherlands who have made significant gains in the development of new low carbon energy technologies. These elements are needed for a scientific, technological and innovation side of a complete delivery chain in our interest and to successfully acquire and operate wind and nuclear technologies. Lessons abound for Nigeria and other developing countries. Envisioning a technologically advanced green (low carbon) economy without robust R&D and without an NSI base built on an educational policy that improves and advances science, technology, engineering and mathematics (STEM) outputs, and without improving institutional and organizational capabilities to govern the system will only be an illusion. Nigeria can start today to build these capabilities to enable it effectively and efficiently harness its huge gas, biomass, solar, hydro and possibly wind and nuclear potentials for its national energy security.

Okafor Akachukwu is a Science Policy Research Unit (SPRU), University of Sussex trained Energy Policy, Innovation and Sustainability Expert. Twitter: @akachukwu Email: akachukwu_okafor@yahoo.com