Road to Gencos and Discos

PHCN-SUBSTATION-AT-MAKERI

ELECTRICITY generation activities started in Nigeria in 1896 when the first power plant was built in Lagos. However, it was not until 1929 when the Nigeria Electricity Supply Company (NESCO) was established as an electric utility company that the phenomenon spread as the Public Works Department (PWD) was empowered to build plants in different parts of the country. This resulted in the construction of a hydroelectric power station at Kuru near Jos, among others. Electricity supply at this time was mainly for government offices and quarters as well as for the very influential.

However, there was a twist in 1951 when the Electricity Corporation of Nigeria (ECN) was established as it had the directive to facilitate adequate supply of electricity to as many Nigerians as were willing to have and able to pay for it. The first 132KV line was constructed in 1962, linking Ijora Power Station to Ibadan Power Station.

The establishment of the Niger Dams Authority (NDA) in 1962 with a mandate to develop the hydropower potential of the country was the real breakthrough in power generation and transmission. However, ECN and NDA were merged in 1972 to form the National Electric Power Authority (NEPA). In 1998, NEPA ceased to have an exclusive monopoly over electricity generation, transmission, distribution and sales as the government amended the Electricity and NEPA Acts to accommodate private sector participation in the sector. However, not much changed in spite of the amendment to the Act.

The 1970s and 1980s are regarded as the golden era of electricity supply in the country. This was because though many rural communities were not connected to the national grid, there was ample supply of electricity to connected areas with downtime being very few and far between. However, since the 1990s, there has been a consistent decline in electricity supply in the country. This stems from the fact that for over two decades, the power sector was subjected to neglect. The power plants were crippled, especially as the hydro-power plants in Kainji, Jebba and Shiroro had a drop in generation sequel to age and obsolete equipment. This was worsened by the failure of the government to add a single power plant to the existing ones despite the rising population and increased demands for electricity. Demand for electricity has grown at the rate of 8.2 per cent per annum since 1984 against the Gross Domestic Product growth of between three and five per cent. Thus, electricity supply continued to depreciate to the extent that generation level dropped to as low as 1,500 megawatts in 2000.

Real reform in the sector started in 2001 when the Olusegun Obasanjo administration came up with the National Electric Power Policy. This paved the way for the metamorphosis of NEPA into the Power Holding Company of Nigeria (PHCN) and the formation of 18 successor companies.

The current administration also set up the Presidential Action Committee on Power (PACP), which is chaired by the president and consists of the vice-president and ministers who play a key role in reforming the sector. The PACP provides high-level oversight of the implementation of electric power sector reform.

The Goodluck Jonathan administration came up with the Power Sector Reform Roadmap which culminated in the construction of new plants. The administration also pursued with vigour the privatisation of the generating plants (GENCOs) and the distribution companies (DISCOs) because of the belief that with these in the hands of private companies electricity generation and distribution would witness an improvement.

Although getting the Gencos and Discos privatised was a daunting task given the opposition of the labour movement to the idea, the government eventually accomplished it when the ownership of the generation and distributions companies were transferred to the new owners on November 1, 2013.

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