Wole Abayomi, Head of Strategy; E.D. Business Strategy, Vanetti Advisory Limited; Powerex Limited
Subjects of Interest
- Electric Power
- Private Sector Development
Leveraging the 2018 census to improve power supply 17 Mar 2017
With a budget outlay in excess of N220 billion for the planned National Census in 2018, Nigeria should explore ways of optimizing the exercise to derive more value beyond headcount. In this light, the statement by the Minister of Power, Works and Housing, Babatunde Fashola, to the effect that accurate national census is instrumental to tackling the power supply challenge in Nigeria, is something to cheer. It would be more encouraging, however, to see when Fashola’s proposition would be taken from a mere statement to an action plan. This is an opportunity to demonstrate how relevant inter-agency collaborations can be harnessed to address matters of critical national importance like the perennial power supply challenge.
In the event such collaborative efforts take place, relevant organs in the Ministry of Power can come up with the broad and specific objectives to be met from gleaning census data for the Ministry’s policies and programmes to deliver increased power supply. Given government bureaucracies, the best time to start such a process should have been many years ago. So, perhaps, the next best time is now if they have not already started.
It is worthy of note that while the pressure is high on the administration to promise this or that amount of megawatt improvement in power supply, there is the need now, more than ever before, to make reliable and useful data asset part of the short-term goals of the sector. With such data available, it would be much clearer which customer or load segments can be viably grid-connected, served with mini grids, embedded power, renewable supply or stand-alone systems. Future plans (medium- and long-term) can be built on a reliable data bank with realistic timelines for the coming on stream of new projects, whether distribution, transmission or generation.
Although there are snippets of data on the power sector from different sources and for different purposes, a central, comprehensive, and purpose-resourced data bank would help the sector in no small way. National energy planning, for instance, will benefit immensely from such asset. Large scale measures like efficiency optimization, demand side management, among others, will become more focused and more result-oriented, with reliable data providing guidance in terms of where to deploy what. Even macro and micro economic effects of improved supply will be estimated with relative ease and better accuracies.
In the absence of data, however, the best that can happen is speculation even at the highest levels. When the reality of such lacuna is projected over a country and the graphic implications are properly appreciated, it should not be difficult to understand, in part, why Nigeria’s power supply challenge appears to be growing faster than it is being solved. Of course, speculative projections sometimes turn out right with a stroke of luck. But critical aspects of national life like power supply should be run at high levels of professionalism and sound management. Even for operators and investors in the sector, correct industry data will guide their business models and market expectations rather than unfounded, over-ambitious prospects that potentially pave the way for sharp practices or frustration.
While the focus of this piece is optimizing the next census exercise for power sector data mining, a comprehensive data asset to be utilized by the sector cannot be resourced exclusively from human headcount. Therefore, in drawing up industry data mining criteria, it is important to include all relevant inputs e.g., market, vendors, operators (in particular), suppliers, consumers, financiers, etc, to achieve a rounded and reliable power sector information bank, a prized asset at this phase of the power sector development in Nigeria.
Although it is good to take advantage of national census for power supply planning, national census cannot be the sole recourse for a major power sector business tool such as credible data. Ideally, data from the different discos and undertakings should feed the national power data bank, and should be complemented by strategic data intelligence from other sources like population census. Unfortunately, operators of some of the power undertakings have run their businesses using questionable or phantom data for years. It took over three years for some of the discos to commence customer enumeration for their territory.
This is a pointer to why improved power supply has remained a mirage and per capita power delivery is diminishing. Relevant administrative and oversight organs of government will do well to insist on minimum performance criteria from the operators at least in soft areas like data collection. This will help them bridge visible gaps and position themselves for improved service delivery and better business returns. Operators that have already invested in reliable data and got it right for their businesses must be commended.
Systematic data is so critical to the power sector. The privatization efforts of the government cannot be objectively appraised without relevant data. As a reminder, we have barely 20 months left to the end of the initial five-year period post-privatization. During this period, certain contractual obligations are expected to be satisfied, principal among them is the percentage reduction in Aggregate Technical, Commercial and Collection (ATCC) Losses. Having offloaded power sector assets to private investors in 2013 at paltry sums on account of their ATCC loss reduction commitments, relevant organs of the government must ensure that Nigeria is not short-changed at the end. Without a doubt, one of the benchmarks for the appraisal is credible data.
If there is measurable improvement in the supply of power, trust can be re-built between the government and the citizens. There can hardly be any better stimulus for the economy right now than the progressive and rapid fulfillment of government’s promises on improved power supply. Even the government’s dire internally generated revenue levels would be bolstered by the multiplier effects of such stimulus.
Depending on the preferences and priorities of the Ministry of Power, a census data capture format that seeks to optimize the central national grid supply can be fashioned. Based on the short-term, medium-term and long-term sectoral objectives, other variants of the data capture can be embedded or analytical models developed to sift the results from which other functional details – e.g. decentralized grid outline, demand blocks, load types, consumer types, etc -- can be estimated. There is no telling the value of such detailed data to national energy planning; from ballpark load level estimates to the geographical spread of different demand blocks.
Other players in the sector should have reasonable degrees of contribution to make in the process. The discos that are yet to comprehensively profile their market territories or those that need to update their database may want to seize the opportunity presented by the national census to evaluate the inputs they can make in the process to achieve targeted outcomes. Also, for the transmission undertaking, details of concern to the institution can be extracted from the data, provided the relevant framework was put in place at the beginning of the enumeration process.
If the institutional collaboration takes places ahead of next year’s census, it would be necessary to design a sampling methodology as a way to understand Nigeria’s peculiar situation in terms of market, scale, customer behaviour, and environment or landscape, among others. Giving regard to the incalculable losses in market development, social progress and time the country has suffered, Nigeria cannot afford any experimentation with foreign models or approaches that have little bearing with local conditions. The process must be right at the first shot.
Bearing in mind the implications of the cardinal role that improved power supply will play in unleashing the economy, it is important that a significant contributory factor such as industry data be paid due attention at the right levels. Leveraging the next National Census is, therefore, a matter that should be taken beyond a statement from the Minister to an action plan, a strategic action plan at that. And in addition to power supply, other public service providers can explore fruitful collaborations with the National Population Commission with a view to maximizing the exercise for national benefits across various public service delivery channels.
The census agency on its part should be willing to welcome relevant inter-agency partnerships in the interest of the nation’s improved service delivery and as a means of stretching the value of every naira expended on the census exercise.