Power sector privatisation, total failure – Senate

The Senate on Thursday declared that the privatisation of the power sector, done 11 years ago, was a total failure due to the lack of stable electricity supply nationwide.

It consequently warned that it might propose legislative measures to repeal the policy.

The Senate’s condemnation of the alleged failure of the power sector came to the fore during consideration of a report presented by its Committee on Power which investigated frequent national grid collapses and related issues.

 The Chairman of the Committee, Senator Enyinnaya Abaribe (APGA, Abia South), who presented the findings, attributed the persistent grid failures to factors such as ageing infrastructure, abandoned projects worth trillions of naira, regulatory inefficiencies, security lapses, lack of modern monitoring systems like SCADA, and inadequate financial oversight.

Abaribe highlighted that despite substantial investments in electricity infrastructure, the grid has suffered 105 collapses over the past decade.

 He revealed the significant costs incurred during grid failures, particularly in restarting power plants.

According to the report, restarting a plant after a grid collapse (known as a “black start”) is considerably more expensive than normal operations.

For instance, while running costs for a plant like Azura, Delta, or Shiroro are approximately $105,000, restarting costs can reach $7m per incident.

Collectively, grid collapses cost Nigeria an estimated N42.5bn for these three plants alone, with broader implications for the entire power sector.

The report emphasised that the National Grid, over 50 years old, is outdated and in urgent need of modernization to meet current operational standards.

Abaribe also noted other pressing issues, including operational inefficiencies, abandoned projects, regulatory gaps, security challenges, and the absence of  Supervisory Control and Data Acquisition systems essential for real-time monitoring and management.

 “Whenever a plant is shut down, they restart the plant and to restart it which they call a black start, it costs far more than running the plant.

“While it costs $105,000 to run the plant, to restart it will cost $7m. So anytime we have a shutdown occasioned by grid collapse, three plants in Nigeria,  that supply most of our electricity, Azura, Delta, and Shiroro, to restart the plant cost Nigeria $25m or ₦42.5bn and if we expand it to the rest of the operating plants in Nigeria, it is actually not quantifiable,” he stressed.

“Aging infrastructure has been identified as a critical factor contributing to frequent grid failures. Many components of the grid are outdated and have not undergone necessary maintenance or upgrades, leading to increased vulnerability to failures.”

Contributing to the debate, Senator Adams Oshiomhole (APC, Edo North), criticized the privatization policy as flawed and exploitative, stating it imposed undue financial burdens on Nigerians.

“The Discos are out for profit while they make our people suffer. I never imagined that a private person would collect money for services he did not render and Nigerians are helpless. The privatized power sector is more of a failure now “, he said.

On his part, Senator Abdul Ningi (PDP, Bauchi Central) added that the ongoing failures in the power sector persist due to a lack of accountability.

He argued that without sanctions for lapses, the sector’s inefficiencies would remain unaddressed.

He said, “Over the years, nobody has been punished for the lapses of the power sector.

“Reports alone without sanctions will not allow Nigeria to make any headway. The implication is that the problems will continue.”

Following a series of debates, the Senate stood down the consideration of the report and gave Abaribe’s committee an additional six weeks to do a holistic investigation into the issues in the power sector and report back for further legislative actions.