By Daniel Agbor
The clamour of many Nigerians for stable power helped spur on the power sector reform. While the reform resulted in the privatisation of some key aspects of the electricity value chain – Generation and Distribution – the transmission sector has remained under the purview of the government. This arrangement has ensured a model of electricity supply that many are arguing has resulted in the poor state of electricity supply nationally.
Nigeria’s model of electricity supply
The current power system in Nigeria is a centralised system where electricity is generated from large power plants that are located away from end-users, connected to a network of high-voltage transmission lines and distributed through the electric power grid. The current transmission network employs a radial distribution system that makes the entire grid prone to faults and cascading failures. The expansiveness of the grid, as well as its public ownership, has resulted in low investment in the network over time. In most cases, infrastructure upgrades do not reflect the market needs as there has often been no coordination between transmission planning and expansion and the relevant distribution companies.
The lack of and inability to install a grid-wide Supervisory Control and Data Acquisition (SCADA) infrastructure have resulted in grid inefficiency. In many cases, transmission and distribution losses account for more than 30 per cent of electricity generated. The incapacity to efficiently transmit electricity has resulted in power plants operating below capacity. The dependency on fossil fuel-powered thermal plants also results in nationwide blackouts with any major disruption in fuel supply.
Countries in a bid to assure energy security are diversifying not only energy sources but also energy supply. Decentralised energy systems are increasingly replacing centralised systems in many countries.
Decentralized Energy
Decentralized Energy (DE) involves power generation at or closer to the point of use. Generation could be for grid-connected or off-grid purposes and can employ and could come in a variety of plant size, fuel or technology. It involves using a variety of smaller power generation and energy storage systems to provide consumers with stable electricity supply.
Which Way Nigeria?
With the decentralized energy system, there is a marked reduction in transmission losses, as well as a more efficient electricity distribution system compared to centralized systems. This system would help increase electricity availability and energy access significantly. Decentralization of electricity would help rural communities invest in conventional and off-grid sources and reduce their dependence on the national grid. Therefore, a decentralized energy system provides a quick and comprehensive approach to energy provision for communities without access to power. Decentralized systems also help to reduce carbon emissions as it is often easier to incorporate renewable energy sources, such as solar and wind, and small hydro into this model. This model has been shown to instil a sense of ownership among communities resulting in lower collection losses from utility companies and reduction in the instances of electricity theft.
While there is no ‘one size fits all’ model electricity supply, it has been observed that a vertically integrated power sector cannot fully work especially in a market like Nigeria’s, therefore, policymakers should look towards decentralising the energy supply system, this would move the market closer to full deregulation and unlock the promises of the power reform process.