POWER REFORMS AND PLUMMETING CAPACITY WITHIN THE NIGERIAN POWER MARKET

Nigeria’s Power Market seem to be failing to deliver on the promise of the reforms as we are witnessing a steady decline in capacity rather than a climb. As at April this year, capacity dropped to 1,714.89 Megawatts Hour/Hour (MWH/H) from 3,563 generated in December 2013. Furthermore it seems that the new players are rather slow in their reaction to a lot of the capacity issues in the industry. As we be…hold the interesting developments in Nigeria’s Power sector, with capacity continuously plummeting despite the power reforms, one critical question is: why are we not witnessing rapid industry transformation, as we saw with the privatisation of the Telecoms Industry?
CHANGING THE GAME – THE INDUSTRY NEEDS TO BE BETTER COORDINATED IN DEALING WITH FUNDING ISSUES AND COUNTER-PARTIES AGREEMENTS
Ordinarily, one would have expected that with the privatisation of the Electricity Market, the new industry players will be in their Capacity Upgrade Phase and would have started rolling out innovative offering with a consequent improvement in the delivery of value to electricity consumers, but funding seems to be a major problem. Another problem is the slow pace of putting together the requisite industry structures. While one would have expected that the industry will pull together in order to ensure the smooth take-off of the Transitional Electricity Market (TEM), the Power Purchase Agreements (PPAs), Gas Supply Aggregation Agreements (GSAA) and Gas Transportation Agreements (GTAs), which would have unlocked the potential of the market, on the contrary, what we are witnessing, is the slow take-off of the broad industry structures which would have helped eased out the old order and deliver the kind of game-changing dynamics we witnessed upon the liberalisation of the Telecoms market.
GOVERNMENT OR OPERATORS – WHO IS TO BLAME?
Even though government has not been up to speed in helping to oversee the transition from policy to practice, truth be told, the quality of players in the game, is hindering envisaged progress. My take on this matter is that we got the power reforms wrong from the licence bid stage.