Transcript Privatisation of public electricity company as a strategy

Privatisation of public electricity company as a strategy for
sustainable energy use in Nigeria
by
K. B. Oyende PhD
Being a paper presented at the 14th Colloquium of
the IUCN Academy of Environmental Law held at
Rovira University I Vigili Terragona, Spain from 30
June to 5 July 2014
The National Policy on Energy in Nigeria hinges on the
twin concepts of sound environmental practice and the
principle of sustainable development.
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There are other principles: The principle of
intergenerational equity, the principle of sustainable use.
Nigeria has suffered from a shortage of power generation due to
the inefficiency in the public electricity generation company
formerly known by the acronym National Electricity Power
Authority (NEPA) which gave way to the
Power
Holding
Company of Nigeria (PHCN) after the commercialisation of
NEPA.
Current demand for electricity in Nigeria is very high.
While the electricity generation companies as a whole can only
generate about 4,500 megahertz of electricity. The balance is
supplied by Generators and independent power producers with
serious consequence on the environment.
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The National Policy on Energy in Nigeria hinges on the twin concept of sound environmental
practice and the principle of sustainable development
There are other principles: The principle of intergenerational equity
Nigeria has suffered from a shortage of power generation due to the inefficiency in the public
electricity generation company formerly known by the acronym National Electricity Power
Authority (NEPA) which gave way to the Power Holding Company of Nigeria (PHCN) after the
commercialisation of NEPA
Current demand for electricity in Nigeria is ??? While the electricity generation companies as
a whole can only generate about 4,500 megahertz of electricity
The balance is supplied by Generators and independent power producers with serious
consequence on the environment
Solar power as an alternative source of power
Solar power being used to power streets in Lagos
Power lines used to distribute
electricity
Strategies for sustainable energy
development
 Market mechanism
 Supply and demand mechanismSupply: Generation mainly from GENCOS and
private independent power companies
 Distribution – through the DISCOS to end
users. Marketing through appropriate pricing
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The Regulatory AgenciesThe Nigerian Electricity Regulation Company (NERC)
The Transmission Company of Nigeria (TRN)
The Bureau for Public Enterprises
The laws and regulationsThe National Electric Power Authority (NEPA) Act Cap
256 LFN 1990
• The Electric Power Sector Reform Act No. 6 2005
• The NERC (Methodology for Estimated Billing)
Regulations 2012 FRN Official Gazette No. 113 Vol. 99
of 1 August 2012
• Posers - What is the appropriate price for the sale of the PHCN?
• Are the successor companies equipped with the necessary skill and
expertise for the task?
• The successor companies lack sufficient funds for the purpose of investing
in the generation and distribution of electricity
• The companies still rely on the former staff of the PHCN for their
operation
• What has changed – only the name
• What is the appropriate price for a unit of electricity generated?
• What is the basis of determining the amount of electricity consumed
where no meter reading took place?
• The issue of fixed charges being levied on electricity consumers whether
they consumed the electricity or not. This is unjustifiable and
unsustainable
• What is the basis for making a four year projection on the tariffs for
electricity generated when there is actual fall in the generation capacity as
shown by statistics?