The Nation Newspaper

Category: Energy

  • Why NERC is unable to grow sector, by group

    The Nigerian Electricity Regulatory Commission (NERC) is unable to grow the power sector because of the commercial and technical problems in the supply value chain, a source at the Association of Nigerian Electricity Distributors (ANED) has said.

    The source, who preferred anonymity, said the sector has not been able to perform optimally because NERC has refused to resolve the fundamental problems plaguing it.

    In an interview with The Nation on phone, the source said the 11 power distribution companies (DisCos) are not getting the right value for the electricity they are distributing to consumers, adding that the issue is retarding growth.

    The source said: “Traditionally, the power distribution firms are supposed to distribute the quantum of electricity coming from their counterparts in the generation arm – the power generation companies GenCos) – to the final consumers at a price that is beneficial to them and the market.

    ‘’However, the reverse is the case as the tariffs are not commensurate with the price of electricity in the market. Imagine a situation where a buyer buys a product at N50 and sell it at 50kobo. Where is the profit for the buyer?

    The source said the DisCos would continue to grapple with liquidity problems until a review of the tariffs is done by NERC.

    The source accused NERC of being inactive when it was supposed to act. “As a matter of fact, a review of the tariffs is expected to take place every six months. However, there was nothing like that in the past six years. The Multi-Year-Tariff-Order (MYTO) is not being implemented in line with the Nigerian Power Sector Reforms Act. Therefore, how can the DisCos get the right price for the product they are supplying their customers?

    ‘’The sector is fundamentally unable to close the gap in the tariffs it is passes to the consumers. This, the source added, has resulted in the inability of the DisCos to meet their obligations by subsidising electricity.

    The source urged stakeholders to come together and address the problems, adding that the sector would not grow until this was done. He said the Federal Government had intervened by giving N750billion to the sector, which would not do much due to the plethora of problems besetting the sector.

    The source said the Nigerian Bulk Electricity Trading Company (NBET), Transmission Company of Nigeria (TCN), the GenCos and the DisCos had some problems, which ranged from paucity of funds to dilapidated infrastructure, among others.

    Another problem that is inhibiting the growth of the DisCos and the sector, according to the source, is poor exchange rates. He said the DisCos bought some equipment at N160 per dollar some years ago, but that this had gone up to N360 per dollar.

    ‘’This makes it difficult for the operators to get enough dollars to buy equipment for maintenance. These problems have become  constraints to revenue generation for Discos,’’ he added.

  • BoI, firm seal N1b Niger Delta off-grid deal

    The Bank of Industry (BoI) and All On have agreed to establish a N1billion Niger Delta off-grid energy fund.

    The fund will provide local currency debt financing to facilitate the deployment of energy solutions by access-to-energy companies in the Niger Delta at 10 per cent interest rate per year (with a one-year moratorium) and tenor of up to seven years.

    The objective of the fund is to stimulate the growth and geographic spread of off-grid energy businesses in the Niger Delta to enable households, small and medium enterprises (SMEs) and communities have access to clean, affordable and reliable power solutions.

    In the Niger Delta, the majority of the population reside in rural areas and only 34 per cent of these have access to reliable grid power. The result is that SMEs in the region use expensive and inefficient diesel and petrol generators increasing their operational costs, families cook with firewood or kerosene while children study with flashlights or candles with the attendant negative health and safety concerns.  The provision of clean, affordable, and reliable sources of energy is therefore essential for improved economic activity and livelihoods of the people of the region.

    Speaking at the signing ceremony for the agreement, BoI Managing Director, Mr. Olukayode Pitan, said: “Bank of Industry keeps seeking and exploring strategic partnerships with reputable institutions like All On in developing sustainable solutions to facilitate social and industrial development. Power is a critical resource to achieving industrialisation, and is also a major cost driver for SMEs in Nigeria. We are, therefore, particularly, pleased with this partnership as the deployment of this fund will provide clean energy at affordable interest rate and friendly conditions not only to SMEs, but also to households and communities in the Niger Delta region of the country.”

    Chief Executive Officer, All On, an off-grid energy investment company backed by Shell, Dr. Wiebe Boer, said:  “We are excited to partner the Bank of Industry on the Niger Delta off-grid energy fund because of their reputation as a leading development finance institution and their deep experience as one of the earliest investors in the off-grid energy sector.

    This partnership will go a long way to encourage off grid energy companies to deploy in the Niger Delta and address the massive access to energy gap in the region.”

    The N1 billion fund is funded equally by the two institutions but will be operated by the Bank of Industry.

  • Firms back in operation after rift resolution

    The oil and gas industry has witnessed a major reconciliation of two major oil service firms – West African Ventures Corporation (WAV), a local company and Sea Trucks Group, an international oil company. The dispute lasted for over two and half years.

    The disagreement arose when the oil industry slumped globally in 2015 and made it difficult for firms to meet their financial obligations. Many oil firms sacked their employees, cancelled and deferred projects. WAV and STG, which were partners, unfortunately, was caught in the web and consequently fell apart.

    The Nigerian Content Development and Monitoring Board (NCDMB) and the National Petroleum Investment Management Services (NAPIMS), an arm of the Nigerian National Petroleum Corporation (NNPC), had to intervene to resolve the issues to close the gaps created by the feud, including restoring their operations to create employment and boost local capacity.

    After several meetings with the management of WAV, STG, NCDMB and NAPIMS, the two disputing firms agreed to work amicably again. The resolution led to signing of completion of settlement agreement in Lagos with industry regulators and operators present.

    NCDMB Executive Secretary, Mr. Simbi Wabote, commended the  resolution, saying it is a win-win for the industry.

    He said: “In every business endeavour, there are disagreements and individual interests but the most important thing is having the mindset to settle through dialogue rather than getting through legal tussle that will last for a very long time that will create a lose-lose  for everybody. So, if businesses see people with integrity and reputation, they want to bring in to enable them settle any of their rift, they should settle should bring those people in and be able to sit round the table and iron out their individual differences rather than resorting to legal battles that will last forever. So, my advice to businesses that are in conflict is to create the opportunity to dialogue because for every problem, there is solution.

    “The significance of the peace agreement and decision to work together amicably going forward is to correct the impression outside the country where people believe that coming to invest in Nigeria as an international business will only leave you to lose your investment and assets. This shows we can amicably resolve our issues. Any foreign investor who wants to come here has a mechanism for dispute resolution, which this agreement has shown that it could work. STG is an international company and WAV is a local company, they had issues but they got the services of NCDMB and NAPIMS and other mediators to be able to resolve it. So, there exists in the country mechanism to resolve issues like this between international and local company. The message is that you come and invest. You will probably lose your investment because you will not be protected, but be assured that regulatory agencies, such as NCDMB, will protect investments that come into this country.”

    WAV Managing Director Mr. Michael Dumbi Amaeshike said: “The agreement brought great relief because the West Africa Ventures Corporation is vital to the industry. It has always provided marine services to the industry and it is the number one marine service company. In the past two and halve years, it has been difficult to provide those services and the industry has been impacted by this dispute, therefore, to be here today and to signal an end to that dispute is very significant to me and the oil and gas industry.”

    On the impact of the dispute on WAV workforce, he said: “We have a sizeable number of staff, but unfortunately, we had to let go of a significant number. We still have a huge number, over 1600 employees on our payroll. Going forward with the development in the industry, we are confident that as we go back into the industry to participate in all the projects that are coming up, we will be thinking of more employees. At a time before the drop in oil price worldwide, we had over 3000 employees.”

    The Chief Executive Officer of Telford Offshore, the representative of STG, said the amicable resolution of the dispute was significant to the industry, promising that the firms will promote local content and capacity development.

  • NEMSA to sanction DisCos over substandard equipment

    The Nigerian Electricity Management Services Agency (NEMSA) will punish any electricity distribution company (DisCo) that uses substandard equipment, its Chief Executive Officer, Mr. Peter Ewesor, has said.

    He said the sanction ranged from a fine of at least N500, 000 to prosecution.

    He said the decision to impose sanctions on the firms was borne out of the need to make them comply with their rules and regulations.

    In an interview with The Nation, he said the agency had warned the DisCos against using substandard materials and equipment, adding that non-compliance would attract punishment.

    He said the agency has directed  the power firms to disconnect buildings on the Right of Ways (ROW) of power lines because of the hazards.

    He said the agency had issued an enforcement order to power firms and their contractors on the use of substandard electrical equipment.

    He said the directive issued between June 2017 and last December led to the disconnection of 1,205 buildings across the country, adding the measures were being taken to restore sanity in the sector.

    He said apart from undertaking responsibility in ensuring that customers get standard meters, the agency has also inspected poles manufacturing firms.

    NEMSA, Ewesor said, has inspected the 71 concrete poles manufacturing firms and certified 31. He said 40 firms were not given the green light, but were asked to correct certain areas and re-apply.

    According to him, NEMSA is insisting that new electrical networks and installations were inspected, tested and certified for use  to reduce the dangers in using such facilities.

    He said the agency stopped DisCos and contractors from undertaking substandard and bad construction practices in the power and allied sectors, to improve the use of quality and danger prevention equipment, adding that lives and properties are in danger of being lost to fire when substandard electrical equipment are used.

    The Standards Organisation of Nigeria (SON) had seized substandard electrical products. Also, the agency has warned importers of substandard products to desist or face prosecution.

  • Shell’s three scholarship awardees graduate

    THREE beneficiaries of Shell Nigeria Exploration and Production Company’s (SNEPCo)  scholarship in the United Kingdom (UK) have returned home after completing their studies.

    They are Iwinosa Aghedo, Peace Adepoju and Oluwapelumi Okewusi. They studied Geotechnical Engineering and Hydrography on the sponsorship of SNEPCo, in collaboration with the Nigerian Content Development and Monitoring Board (NCDMB).

    SNEPCo’s Managing Director, Bayo Olulari, said: “From less than 10 per cent Nigerian manpower when we started production at the Bonga field over 13 years ago, we have grown to over 95 per cent and the new scholarship initiative is targeted at further increasing the Nigerian content of our manpower.”

    Speaking at a reception, Aghedo, said: “We promise to make the scholarship effective and be worthy ambassadors of the programme.” Her colleague, Miss Oluwapelumi Okewusi added: “Getting to the top is the easy part. Staying at the top is the hard work, we will put in the hard work.”

    General Manager, Business and Government Relations of Shell Nigeria, Bashir Bello, said: “The scholarship is the outcome of a 2012 vision when SNEPCO and NCDMB agreed to sponsor three Nigerian students to postgraduate training in the United Kingdom to close identified gaps as part of NCDMB support for the SNEPCO Seabed Survey contract waiver in that year.”

    Shell’s Nigerian Content Manager, Olanrewaju Olawuyi, said the three scholars were selected after a rigorous selection from the 36 states and the Federal Capital Territory and, that in the UK, the Nigerians received regular support through regular interactions and calls. “I am excited at the successful fit of the candidates,” he said.

    The scholarship is part of the regular SPDC JV PostGraduate Scholarships scheme launched in 2010 to build a talent pipeline in host communities. It offers successful applicants scholarship for all the direct and indirect activities leading up to the award, cost of foreign education until return to Nigeria.

    Since the launch, except for 2016, SPDC has awarded 10 full scholarships yearly for a one-year Master’s programme in oil and gas-related disciplines at top UK universities. So far, the scheme has recorded 79 beneficiaries.

    The schemes are the most extensive private educational sponsorship initiative. Launched in 1953, the scholarships have evolved to cater for various educational categories of students, ensuring that every Nigerian child is given an opportunity to reach their potential irrespective of the family’s economic status.

    Also, Shell supports the academia  with other key programmes that include Centres of Excellence, Professorial Chairs, Shell Eco-Marathon, Sabbatical and Research Internship, Research Support, and Data Support.

  • NEMSA to sanction DisCos over substandard equipment

    The Nigerian Electricity Management Services Agency (NEMSA) will punish any electricity distribution company (DisCo) that uses substandard equipment, its Chief Executive Officer, Mr. Peter Ewesor, has said.

    He said the sanction ranged from a fine of at least N500, 000 to prosecution.

    He said the decision to impose sanctions on the firms was borne out of the need to make them comply with their rules and regulations.

    In an interview with The Nation, he said the agency had warned the DisCos against using substandard materials and equipment, adding that non-compliance would attract punishment.

    He said the agency has directed  the power firms to disconnect buildings on the Right of Ways (ROW) of power lines because of the hazards.

    He said the agency had issued an enforcement order to power firms and their contractors on the use of substandard electrical equipment.

    He said the directive issued between June 2017 and last December led to the disconnection of 1,205 buildings across the country, adding the measures were being taken to restore sanity in the sector.

    He said apart from undertaking responsibility in ensuring that customers get standard meters, the agency has also inspected poles manufacturing firms.

    NEMSA, Ewesor said, has inspected the 71 concrete poles manufacturing firms and certified 31. He said 40 firms were not given the green light, but were asked to correct certain areas and re-apply.

    According to him, NEMSA is insisting that new electrical networks and installations were inspected, tested and certified for use  to reduce the dangers in using such facilities.

    He said the agency stopped DisCos and contractors from undertaking substandard and bad construction practices in the power and allied sectors, to improve the use of quality and danger prevention equipment, adding that lives and properties are in danger of being lost to fire when substandard electrical equipment are used.

    The Standards Organisation of Nigeria (SON) had seized substandard electrical products. Also, the agency has warned importers of substandard products to desist or face prosecution.

  • Firms back in operation after rift resolution

    The oil and gas industry has witnessed a major reconciliation of two major oil service firms – West African Ventures Corporation (WAV), a local company and Sea Trucks Group, an international oil company. The dispute lasted for over two and half years.

    The disagreement arose when the oil industry slumped globally in 2015 and made it difficult for firms to meet their financial obligations. Many oil firms sacked their employees, cancelled and deferred projects. WAV and STG, which were partners, unfortunately, was caught in the web and consequently fell apart.

    The Nigerian Content Development and Monitoring Board (NCDMB) and the National Petroleum Investment Management Services (NAPIMS), an arm of the Nigerian National Petroleum Corporation (NNPC), had to intervene to resolve the issues to close the gaps created by the feud, including restoring their operations to create employment and boost local capacity.

    After several meetings with the management of WAV, STG, NCDMB and NAPIMS, the two disputing firms agreed to work amicably again. The resolution led to signing of completion of settlement agreement in Lagos with industry regulators and operators present.

    NCDMB Executive Secretary, Mr. Simbi Wabote, commended the  resolution, saying it is a win-win for the industry.

    He said: “In every business endeavour, there are disagreements and individual interests but the most important thing is having the mindset to settle through dialogue rather than getting through legal tussle that will last for a very long time that will create a lose-lose  for everybody. So, if businesses see people with integrity and reputation, they want to bring in to enable them settle any of their rift, they should settle should bring those people in and be able to sit round the table and iron out their individual differences rather than resorting to legal battles that will last forever. So, my advice to businesses that are in conflict is to create the opportunity to dialogue because for every problem, there is solution.

    “The significance of the peace agreement and decision to work together amicably going forward is to correct the impression outside the country where people believe that coming to invest in Nigeria as an international business will only leave you to lose your investment and assets. This shows we can amicably resolve our issues. Any foreign investor who wants to come here has a mechanism for dispute resolution, which this agreement has shown that it could work. STG is an international company and WAV is a local company, they had issues but they got the services of NCDMB and NAPIMS and other mediators to be able to resolve it. So, there exists in the country mechanism to resolve issues like this between international and local company. The message is that you come and invest. You will probably lose your investment because you will not be protected, but be assured that regulatory agencies, such as NCDMB, will protect investments that come into this country.”

    WAV Managing Director Mr. Michael Dumbi Amaeshike said: “The agreement brought great relief because the West Africa Ventures Corporation is vital to the industry. It has always provided marine services to the industry and it is the number one marine service company. In the past two and halve years, it has been difficult to provide those services and the industry has been impacted by this dispute, therefore, to be here today and to signal an end to that dispute is very significant to me and the oil and gas industry.”

    On the impact of the dispute on WAV workforce, he said: “We have a sizeable number of staff, but unfortunately, we had to let go of a significant number. We still have a huge number, over 1600 employees on our payroll. Going forward with the development in the industry, we are confident that as we go back into the industry to participate in all the projects that are coming up, we will be thinking of more employees. At a time before the drop in oil price worldwide, we had over 3000 employees.”

    The Chief Executive Officer of Telford Offshore, the representative of STG, said the amicable resolution of the dispute was significant to the industry, promising that the firms will promote local content and capacity development.

  • BEDC holds safety campaigns in Edo

    Benin Electricity Distribution Company (BEDC) has held safety campaigns in some primary and secondary schools in Edo State.

    It also donated over 20,000 exercise books to some pupils.

    The sensitisation was part of  the firm’s Corporate Social Responsibility (CSR).

    At Eyean Secondary School in Ikpoba Okha Local Government Area of Edo State, BEDC’s Health, Environment and Safety Manager, Mr. Gilbert Nweke, spoke on the dangers of tampering with electrical installations, living and trading under high tension overhead lines, overcrowded electrical sockets, stepping/touching lines (electrical wires) and playing near distribution substations, among others.

    The Principal, Eyean Secondary School, Mr. P. K. Idemudia, who was elated at the exercise, expressed appreciation to BEDC for the visit, saying: “This is a good innovation by BEDC, it is the first time we are witnessing this campaign from any electricity service provider in the country.”

    He advised other electricity distribution companies (DisCos) to take a cue from BEDC to reach out to children who formed major part of the vulnerable segment of their customer population and are prone to electrical accident.

    The team Lead of CSR Project, Mrs. Felicia Nlemoha, said: “The campaign will promote safety in the use of electricity at home, schools, road, and workplace and reduce the rate of electricity accidents and hazards, will  become safety ambassadors in their various homes.’’

    She further stated that as part of giving back to the society, selected schools would get educational materials from BEDC.

    “In addition to the safety campaign, BEDC will also commence the formation of energy clubs called ‘Joules’ in secondary schools. The growth of Joules club will metamorphose into a debate competition, among member- schools. The winners of the competition will in turn become brand ambassadors of BEDC.

    “The objectives of the Joules clubs are to groom secondary students to take up careers in the electricity industry and to boost the current drive by BEDC and other DisCos to tackle manpower gap in the power sector,” she added.

    According to Mrs. Nlemoha, it will also encourage students to embrace the STEM (Science, Technology, Engineering and Mathematics) initiative in their career path, especially the females and also bridge the knowledge gap in the power industry by educating students on the entire electricity value chain.

    BEDC also visited some primary and secondary schools in Edo State, including those in Ogbe, Oliha, Iyase Ugbekun, Ologbosere, Isohan, Ogenerie primary schools

  • Why NERC is unable to grow sector, by group

    The Nigerian Electricity Regulatory Commission (NERC) is unable to grow the power sector because of the commercial and technical problems in the supply value chain, a source at the Association of Nigerian Electricity Distributors (ANED) has said.

    The source, who preferred anonymity, said the sector has not been able to perform optimally because NERC has refused to resolve the fundamental problems plaguing it.

    In an interview with The Nation on phone, the source said the 11 power distribution companies (DisCos) are not getting the right value for the electricity they are distributing to consumers, adding that the issue is retarding growth.

    The source said: “Traditionally, the power distribution firms are supposed to distribute the quantum of electricity coming from their counterparts in the generation arm – the power generation companies GenCos) – to the final consumers at a price that is beneficial to them and the market.

    ‘’However, the reverse is the case as the tariffs are not commensurate with the price of electricity in the market. Imagine a situation where a buyer buys a product at N50 and sell it at 50kobo. Where is the profit for the buyer?

    The source said the DisCos would continue to grapple with liquidity problems until a review of the tariffs is done by NERC.

    The source accused NERC of being inactive when it was supposed to act. “As a matter of fact, a review of the tariffs is expected to take place every six months. However, there was nothing like that in the past six years. The Multi-Year-Tariff-Order (MYTO) is not being implemented in line with the Nigerian Power Sector Reforms Act. Therefore, how can the DisCos get the right price for the product they are supplying their customers?

    ‘’The sector is fundamentally unable to close the gap in the tariffs it is passes to the consumers. This, the source added, has resulted in the inability of the DisCos to meet their obligations by subsidising electricity.

    The source urged stakeholders to come together and address the problems, adding that the sector would not grow until this was done. He said the Federal Government had intervened by giving N750billion to the sector, which would not do much due to the plethora of problems besetting the sector.

    The source said the Nigerian Bulk Electricity Trading Company (NBET), Transmission Company of Nigeria (TCN), the GenCos and the DisCos had some problems, which ranged from paucity of funds to dilapidated infrastructure, among others.

    Another problem that is inhibiting the growth of the DisCos and the sector, according to the source, is poor exchange rates. He said the DisCos bought some equipment at N160 per dollar some years ago, but that this had gone up to N360 per dollar.

    ‘’This makes it difficult for the operators to get enough dollars to buy equipment for maintenance. These problems have become  constraints to revenue generation for Discos,’’ he added.

  • Shell’s three scholarship awardees graduate

    Three beneficiaries of Shell Nigeria Exploration and Production Company’s (SNEPCo)  scholarship in the United Kingdom (UK) have returned home after completing their studies.

    They are Iwinosa Aghedo, Peace Adepoju and Oluwapelumi Okewusi. They studied Geotechnical Engineering and Hydrography on the sponsorship of SNEPCo, in collaboration with the Nigerian Content Development and Monitoring Board (NCDMB).

    SNEPCo’s Managing Director, Bayo Olulari, said: “From less than 10 per cent Nigerian manpower when we started production at the Bonga field over 13 years ago, we have grown to over 95 per cent and the new scholarship initiative is targeted at further increasing the Nigerian content of our manpower.”

    Speaking at a reception, Aghedo, said: “We promise to make the scholarship effective and be worthy ambassadors of the programme.” Her colleague, Miss Oluwapelumi Okewusi added: “Getting to the top is the easy part. Staying at the top is the hard work, we will put in the hard work.”

    General Manager, Business and Government Relations of Shell Nigeria, Bashir Bello, said: “The scholarship is the outcome of a 2012 vision when SNEPCO and NCDMB agreed to sponsor three Nigerian students to postgraduate training in the United Kingdom to close identified gaps as part of NCDMB support for the SNEPCO Seabed Survey contract waiver in that year.”

    Shell’s Nigerian Content Manager, Olanrewaju Olawuyi, said the three scholars were selected after a rigorous selection from the 36 states and the Federal Capital Territory and, that in the UK, the Nigerians received regular support through regular interactions and calls. “I am excited at the successful fit of the candidates,” he said.

    The scholarship is part of the regular SPDC JV PostGraduate Scholarships scheme launched in 2010 to build a talent pipeline in host communities. It offers successful applicants scholarship for all the direct and indirect activities leading up to the award, cost of foreign education until return to Nigeria.

    Since the launch, except for 2016, SPDC has awarded 10 full scholarships yearly for a one-year Master’s programme in oil and gas-related disciplines at top UK universities. So far, the scheme has recorded 79 beneficiaries.

    The schemes are the most extensive private educational sponsorship initiative. Launched in 1953, the scholarships have evolved to cater for various educational categories of students, ensuring that every Nigerian child is given an opportunity to reach their potential irrespective of the family’s economic status.

    Also, Shell supports the academia  with other key programmes that include Centres of Excellence, Professorial Chairs, Shell Eco-Marathon, Sabbatical and Research Internship, Research Support, and Data Support.