As guest writer Olufolahan Osunmuyiwa explains, Nigeria remains in the thick of lingering energy crisis.
As a young child growing up in Nigeria, I always looked forward to the rainy season. Beside the bountiful harvest of crops and lively green of grass and trees, this time of year has a unique way of brightening up communities; it is the season of electricity.
At this time of the year my 8-year-old self would quietly wonder at the oddly increasing effectiveness of the then National Electric Power Company (NEPA) and would sometimes happily shout the popular slogan “UP NEPA!” Little did I know that the country’s electricity infrastructure largely relied on water dams and that the “excess” supply during this season was the result of the dams' overflow.
As the dry season approached, my excitement would fizzle into the sighs and grunts that accompanied the more common status quo of brown- and blackouts. I didn't understand the rainy season phenomenon until a few years into teenage-hood. Nothing had improved in the interim; the infrastructure was still old, river basins were still poorly managed, transmission lines moribund and cobwebby, and electricity deficits a part of life.
Against that backdrop, Nigeria launched a merry-go-round of reforms, which included toying with the idea of liberalization and expansion of its national energy mix. Although, in light of the ever-growing energy demand, this idea was welcomed, the move led to a bazaar of sorts (fondly referred to as Gbanjo in my native language). NEPA and other energy infrastructures, previously regarded as national assets, were marked for sale. When, in partnership with foreign investors, a number of actors scrambled to purchase these energy assets, the process became shrouded in secrecy, and attempts to ensure accountability failed. The upshot was the sale of highly valuable assets to cronies of the state for bargain basement prices - such as refineries valued at 800 billion dollars being sold for 500 million.
In 2005, following highly public consultations between the government of the day and multinational oil corporations on gas re-injection, Nigeria’s energy mix was diversified to fully include the use of natural gas. This decision was followed by the sale/unbundling of the defunct NEPA (seen in some circles as mere whitewashing through a change of name); introduction of gas plants for independent power generation, boosted by a proposed West African Gas Pipeline initiative; increase in electricity subsidies, and the creation of regulatory bodies to ensure optimum supply.
The next government, specifically from 2008 to 2011 started an even bigger bazaar, this time by unbundling Nigeria’s electricity sector and offering mouth-watering subsidies to potential investors. This became a theater of political misgivings especially among rent-seeking elites who wanted a piece of the “national cake”. The result was an electricity sector left in the hands of a few oligarchs and no significant increase in electricity generation.
Although the liberalization process could have been a step in the right direction, it flopped for a number of reasons. First, it failed to deal with the country’s problems with energy infrastructure. Dams that were barely holding together after seven decades of poor maintenance were being relied on to work at optimal capacity, while sites indentified as possible locations to build new hydropower stations went unexplored. In addition, transmission and distribution lines, which had existed for about five decades, had turned to unattended clotheslines.
Secondly, although Nigeria found a better alternative in oil and gas, the activities of militants in the Niger Delta have significantly hampered the effects of these resources on power generation. Today, oil and gas pose even greater problems than the dilapidated old dams. In an effort to air their grievances, insurgents blow up oil and gas pipelines, further crippling the power generation capacity.
In the last year, vandalism has caused Nigeria oil and gas infrastructure losses worth an estimated 7 billion dollars. According to the managing director of the Nigerian National Petroleum Corporation (NNPC), the estimated fiscal loss would potentially fund a new refinery, 30 percent of the national budget, expansion of the national power grid by 7,000 megawatts and construction of a 1,700 kilometer pipeline.
With the ongoing standoff between the incumbent government and insurgents, the contribution of gas to electrification is set to shrink even further. Data released by Nigerian Petroleum Development Company (NPDC) in July 2016 shows that gas production by joint venture assets dropped from 173.8 billion standard cubic feet in January to 139.58 in July.
Today, newly refurbished dams generate a large chunk of grid-connected electricity, but it is not enough. The increased blackouts that ensued after the end of rainy season last month exposed the dams as the imperfect solution they are, and force us to face the fact that we can no longer sit and wait for the rain to come.
Olufolahan Osunmuyiwa is a Nigerian final year PhD researcher at the Institute for Environmental Studies (IVM) at Vrije Universiteit Amsterdam, the Netherlands. Her current PhD research is on energy transition with a focus on the level of renewable energy uptake, governance and the policy implications for sub-Saharan Africa and specifically Nigeria.