CHARTERED INSTITUTE OF POWER ENGINEERS OF NIGERIA (CIPEN)

Powering Nigeria

Tunji — Tue, 30 Apr 2024 09:51:02 +0000

The year 2023 recorded significant legal milestones in the Nigerian Electric Supply Industry (NESI) owing to an amendment to the Constitution that allows states to establish electricity markets within the states and the enactment of the Electricity Act, 2023 (the “Electricity Act” or “the Act”).

The Electricity Act repealed the Electric Power Sector Reform Act, 2005 and enacts policies towards propelling the NESI into the post-privatization phase while providing a framework for energy transition amongst others.

As 2024 unfolds, the Nigerian Electricity Regulatory Commission (NERC) and various market participants have taken noteworthy actions, reflecting the swift transformations within the sector. This overview highlights key developments that have occurred in January 2024 and their implications for the Nigerian electricity landscape.

A. NERC POISED TO SUPPORT STATES IN CREATING ELECTRICITY MARKETS

The Electricity Act provides that once a state establishes its electricity market, NERC will cease to regulate the distribution of electricity within the state. On 23 January 2024, NERC inaugurated three working groups responsible for guiding the establishment of state electricity markets and general implementation of the Act. These working groups cover Legal and Regulatory, Engineering and Technical, and Commercial and Transaction aspects.

We view this as a noteworthy move by NERC, emphasizing the importance of a collaborative approach between the Federal Government and the states to give practical, legal and commercial effect to the Constitutional amendment and the new changes to the law. This collaborative effort is crucial for achieving a smooth transition to a de-centralized electricity market in alignment with the stipulations of the Electricity Act.

B. NERC ISSUES MINI GRID REGULATIONS, 2023

In the early part of January 2024, NERC issued the Mini Grid Regulations, officially signed on 29 December 2023. These Regulations which repealed the 2016 Mini Grid Regulations, specifically target mini grids with a generating capacity of up to 1MW per site. Additionally, a mini-grid developer focusing on an isolated system with distributed power not exceeding 100kW may apply for a mini-grid permit pursuant to the Regulations.

For Interconnected mini-grids, the NERC mandates the signing of a tripartite contract involving authorized representatives of the connected community, the mini-grid developer, and the Distribution Company (DisCo). The mini-grid developer is obliged to pay a Distribution Use of System (DUoS) charge, determined through mutual agreement with the DisCo. In cases where an agreement cannot be reached, a methodology for determining the charge is outlined in schedule 8 of the Regulations.

A notable improvement in the Regulations is the capping of technical losses at 4% and non-technical losses at 3%. This contrasts significantly with the 2016 Regulations, which set both technical and non-technical losses at a maximum of 10% each.

The Regulations open doors for companies in the renewable energy infrastructure to invest in the establishment of mini grids powered by clean sources such as solar, wind, and other renewable forms. However, investors are advised to adopt a holistic approach, integrating technological innovation, community engagement, and sustainable business models to optimize the impact and returns on their investments.

C. NERC REMOVES BOARD OF KADUNA UTILITY

One of the significant regulatory powers vested on NERC by the Electricity Act is the authority to dissolve the board of a licensee company. The Act empowers NERC to investigate the operations of any licensee company and, in cases where the licensee lacks sufficient assets to cover its liabilities to lenders, NERC can dissolve the board of directors of the company pursuant to section 75 (2) (a) of the Act. In such instances, administrators and special directors may be appointed by NERC to oversee the affairs of the licensee.

A notification of imminent regulatory intervention was issued to the management and shareholders of Kaduna Electricity Distribution Company (KAEDC), namely, Afrexim, Fidelity Bank and BPE. Afrexim and Fidelity Bank had facilitated the US$119.1 million acquisition of 60% of the utility during the privatization exercise in 2013.

As a result of the original investors defaulting on the terms of the facility, Afrexim and Fidelity bank had

taken over the management of KAEDC but are yet to find a buyer for the shares.

Pursuant to its powers under the Act, NERC, through a notice dated 1 January 2024, dissolved KAEDC’s

board of directors due to the company’s failure to settle a substantial debt owed to the Nigerian Bulk Electricity Trading Plc (NBET) and Market Operator (MO).

NERC indicated that it would administer the sale of KAEDC on the basis of the highest and best price offered for the undertaking and in accordance with the provisions of the Act.

D. MOFI TAKES OVER 40% STAKE IN DISCOS FROM BPE

The Ministry of Finance Incorporated (MOFI) was registered pursuant to the MOFI Act of 1959 as an asset holding company of the Federal Government of Nigeria (FGN). It acts as the investment vehicle of all federal government investment interests, estates, easements, and rights across various asset classes ranging from corporate assets, financial assets, fixed assets, mineral and intangible assets, and other cash-flow generating assets.
During the privatization exercise of the eleven distribution companies (DisCos) in 2013, MOFI granted a Power of Attorney (PoA) to the Bureau of Public Enterprises (BPE) to hold the 40% shares retained by the Federal Government in the DisCos. However, in two separate letters recently signed by the Minister of Finance and Coordinating Minister for the Economy along with the CEO of MOFI, the PoA was terminated.

The underlying reason for this development is the government’s desire to have MOFI take over ownership, management, and control of its equity holdings in all companies, as stipulated in its establishing legislation.

As part of this transition, DisCos are mandated to submit board minutes, reports, plans, and financial statements spanning the years 2021 to 2023 to MOFI and BPE-appointed directors on the board of the DisCos were immediately withdrawn. Furthermore, existing share certificates held by BPE will be nullified, and new ones will be issued in favour of MOFI.

E. KANO UTILITY COLLABORATE WITH BLACKAION CAPITAL TO RAISE $200 MILLION INVESTMENT FOR GREEN INFRASTRUCTURE

The Kano Electricity Distribution Company (KEDC) has announced a strategic collaboration with BlackAion Capital, a Mauritius-based firm, with the goal of securing funding for interconnected mini-grids and embedded generation projects in Kano, Katsina, and Jigawa States.

The Managing Partner at BlackAion, emphasized the significance of investing in KEDC, underscoring its potential impact on environmental sustainability. The ambitious plan aims to create a minimum of 200 MW of incremental capacity through the establishment of 100 mini-grids and embedded generation projects.

Investors involved in KEDC express their intent to position it as the first Green DisCo in Africa, incorporating innovative elements such as embedded solar hybrid power plants, mini-grids, Energy Storage Systems (ESS), and power purchase agreements with clean energy generators.

F. DISCOS TO ENTER INTO POWER PURCHASE AGREEMENTS WITH GENCOS

In the recent Multi-Year Tariff Order (MYTO) released by NERC on 17 January 2024, DisCos have been granted approval to directly procure electricity from Generation Companies (GenCos). This marks a significant shift from the practice where the Nigerian Bulk Electricity Trader Plc (NBET) acts as an intermediary between GenCos and DisCos.

The effectiveness of the bilateral agreements between GenCos and Discos will depend on the creditworthiness of the DisCos. There is also the need for cost-reflective tariffs that ensure commercially viable returns.

Conclusion

These series of developments in the beginning of 2024 highlights the dynamic landscape of Nigeria’s electric power sector.

As the year progresses, the electric power sector holds the promise of being a key player in the nation’s economic growth, encouraging investment and fostering an environment conducive to the sector’s expansion and enhancement.

CIPEN delegation on a courtesy visit to the Chairman, Senate Committee on Power

Favour Anyiam — Tue, 30 Apr 2024 08:52:25 +0000

CIPEN delegation on a courtesy visit to the Chairman, Senate Committee on Power, Sen. Enyinnaya Abaribe at the NASS Complex, Abuja on Tuesday April 23, 2024

The President of CIPEN, lead an EXCO delegation to the Director General, ICRC

Favour Anyiam — Tue, 30 Apr 2024 08:40:47 +0000

The President of CIPEN, Engr. Israel Abraham lead an EXCO delegation to the Director General, ICRC on a courtesy visit at the Corporate Headquarters of Infrastructure Concession Regulatory Commission, Abuja on 12th March, 2024.

A fruitful outing and outcome.

UNLICENSED POWER ENGINEERS MUST STEER CLEAR OF SECTOR

Favour Anyiam — Tue, 30 Apr 2024 07:30:56 +0000

The President of the Certified Institute of Power Engineers (CIPEN), Engr. Israel Abraham has warned all unlicensed engineers to stay away from the power sector or risk severe consequences.
Engr. Abraham issued the warning during the inauguration of CIPEN and its governing council, themed: “In-depth analysis of causes and solutions to the stunted growth of Nigeria’s power sector”, on Thursday in Abuja.

He, however, emphasized the critical importance of licensed professionals in ensuring the safety and reliability of power systems.
“There has been a gap in the power sector and it is not as if we don’t have those who are working or professionals there. However, the professionals who are supposed to be in charge are not fully recognized by law. Just like normal workers and all of that but now the government has finally given tacit approval to say from this day forth these are the professionals in this very sector and those that are surrounding it.
“So, beginning from this day everyone in Nigeria who is going to practice power engineering must have approval as a practitioner, you must be licensed by this body. If you have not been licensed then you are a quack no matter how big or how small you are. That is the import of what today’s assignment is talking about.
“It is announcing to the whole world that in Nigeria, if you are practising and you’re touching wires, you’re pushing cables or transformer, anything that has to do with the power sector and it allied you are a practitioner in this body and if you are not, it means you are a quack or you’re an impostor.”
On his part, a House of Representatives member representing Tsanyawa/Kunchi Federal Constituency of Kano State, Hon. Sani Umar Bala, charged the institute with ensuring that power engineers are registered under a code for proper regulation.
He said: “My position as at the time and even today is that, since there is currently no clear enforceable code of ethics or rules of engagement for practitioners, the Institute and its Council are

expected to bridge that gap by registering power engineers and professionals who are expected to conform to and be guided by a code of ethics dished out by the Institute.“

The Institute is therefore positioned to provide strict and independent regulation in the area of power engineering while also ensuring effective monitoring of practitioners and the overall practice.
“The journey to where we are today may have been hectic, but I give gratitude to almighty Allah, the National Assembly, the then President Muhammadu Buhari and the President of the Institute including every other person who contributed in one way or the other to the passage of the Bill into law.

“I hope that our dreams of situating a professional, ethical and specialized workforce to carry out practice in the power engineering sector in Nigeria shall truly help to complement other efforts aimed at galvanizing the sector.
“This would also replace the current evidence of uncertified or unlicensed persons who go about carrying out installations or repairs of any sort in the industry. It will protect our industry from those who have nothing to lose in their conduct and practice.”
Speaking on the implications of the recently signed Electricity Act 2023 by President Bola Ahmed Tinubu, the former Managing Director, Transmission Company of Nigeria, TCN, Engr. Isa Musa, in his inaugural lecture, said: “It can be a single panacea for all the power problems we have in the country today.
“Lack of integrated and comprehensive energy policy, pieces of legislations, procedures and directives characterized by waste would be things of the past.
“The Renewable Energy Master Plan (REMP) prepared by the Energy Commission of Nigeria can be used by the states as a guide for the development of all renewable energy sources in the country”, he added.

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Institute Seeks FG Collaboration to Combat Quackery in Power Sector

Favour Anyiam — Mon, 29 Apr 2024 20:20:45 +0000

The Chartered Institute of Power Engineers of Nigeria (CIPEN) has sought collaboration with the Federal Ministry of Labour and Employment to promote professionalism and upscale knowledge and skills within the nation’s power sector.

Israel Abraham, President of CIPEN, who led a delegation of the Institute, made the request during a courtesy visit to the Minister of Labour and Employment, Nkiruka Onyejeocha on Wednesday.

In a statement issued by the Special Adviser on Media to the minister, Emameh Gabriel, Mr. Abraham said the institute, established by an Act of the Parliament in 2023, is empowered to regulate and determine the standards of knowledge required for practicing power engineering in Nigeria.

“We are here to solicit the cooperation and collaboration of the Federal Ministry of Labour and Employment in promoting and entrenching professionalism to upscale knowledge and skills and enhance competence and capacity within Nigeria’s power sector,” he said.

Abraham said CIPEN has developed various licenses for different categories of power engineering personnel, and is seeking the ministry’s support in enforcing their adoption.

The CIPEN president also requested the ministry’s support for the inclusion of CIPEN’s qualifications in the National Scheme of Service for the placement of power engineering personnel in the civil service.

“We are confident that a synergy between CIPEN and the Federal Ministry of Labour and Employment will instil a sense of sanctity, foster professionalism, eradicate mediocrity in the Nigerian Electricity Supply Industry (NESI) necessary for driving sectoral performance, and ultimately give birth to a thriving power industry that will exceed the expectations of all Nigerians,” Abraham said.

In her response, the Minister highlighted the dangers of “quackery” in key industries like power and construction. She argued that a lack of qualified professionals is hindering economic growth and even costing lives.

She said without qualified professionals, industries cannot reach their full potential, adding that without checks, unqualified individuals will continue provide substandard work, leading to issues of building collapses, power outages and even lose of lives.

She expressed strong support for the Institute to combat quackery, noting that the government’s eight-point agenda requires professional expertise to succeed, as it is mandatory that “qualified individuals handle essential tasks in key sectors, while at the same time-protecting professionals, supporting and valuing those who have invested time and effort in gaining proper qualifications.

Onyejeocha further explained that the government’s commitment is clear: to deliver services that meet international standards and achieving this goal requires addressing the issue of quackery within the country. She argued that this is not just about economic growth, but also about protecting lives.

She said: “Quackery is part of the reasons our industries are not growing. And if doesn’t grow, you create dearth in the economyeconomy and in the overall output of all we have invested on in our industries.

“Everytime I come across people seeking to instil discipline in our attitude towards work, I get excited, because I believe we can’t grow with quackery, we can’t grow with imitation and with we turning deaf ears to issues that bedevil national interest.

“We have seen from records that once you a professional in place with the right mindset and attitude, positive outcome is certain.

“If you watch study the 8 point agenda of the president, it was crafted carefully, every point of it has a professional touch and a human face. And there is no way you can bring a human face to bare if you don’t engage a professional to do that.”

She assured the delegation of the government support to work with the Institute in ensuring that the needed change is brought to the power sector.

“This government is to deliver on goods and services that will meet international standards. If we don’t get it right from within, I don’t think we will be able to get it right internationally.

“If quackery is not combatted, it is like we are deliberately neglecting why we sent people to school. We must protect professionals. Look at the building sector, why are building collapsing? Because we have allowed people without professional skills to take over the space. This must stop. We are losing lives because we are neglecting why we sent people to school. This also applies to the power sector”she said.

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40% Electricity Access: Federal Govt Charges Power Institute On Collaboration

otota — Sun, 21 Apr 2024 19:03:25 +0000

With only 40 per cent of Nigerians having access to electricity in the country, the federal government has charged members of a newly inaugurated power institute to collaborate to boost supply.
Speaking, while inaugurating the Chartered Institute of Power Engineers of Nigeria (CIPEN), in Abuja yesterday, minister of Power, Adebayo Adelabu, who attributed the low level of access to low power generation, said the situation demanded necessary input and attention from all stakeholders.

The minister said that it’s against this background that the administration of President Bola Ahmed Tinubu elicited a lot of reforms in the industry leading to the signing into law the Electric Power Reform Act 2023 which gives authority to states to generate, transmit and distribute power.
Adelabu who was represented by the director, Transmission in the Ministry of Power, Engr. Nosike Emmanuel pleaded with stakeholders in the industry to collaborate as the industry is undergoing significant restructuring reforms.
“We will all be delighted if collaborative arrangements can be forged with the relevant stakeholders to partner in harnessing the vast potentials of our country’s abundant natural resources in the area of coal power, wind, mini-hydro and large scale solar and many other sources of energy” he urged.
“Power sector is currently facing challenges that demand necessary input and attention from all stakeholders. It’s only 40 per cent of the 200 million people in Nigeria that have access to power. This is due to low generation. Lack of adequate power is a major constraint to the socio-economic development of our nation. That’s why the choice of the lecture theme, “In-depth analysis and professional solutions to stunted growth of our power sector is very apt. CIPEN is bringing professional capability, credibility and competence to bear in the electricity supply power industry and provide tremendous opportunity for research, investment and partnership in the sector, he said.
“CIPEN serves as a reservoir for appropriate knowledge and promotion of professional competence for development of power industry through innovative contributions and leveraging on timely and capacity building of power industry.
In his remarks, the president of CIPEN, Engr. Israel Esehoghene Abraham stated that the institute is charged with the responsibility to control, regulate and determine the standards of knowledge and skills to be attained by people

seeking to be chartered power engineers and for people seeking to become power engineering professionals and for related matters.This implies that the institute is a specialised body for engineering professionals in the Nigerian power sector. It has the onerous mandate to professionally drive the Nigerian power sector’s efforts towards realising the Nigerian electric power dream” the president said.

Delivering an inauguration lecture, former managing director, Engr. Isa Musa, noted that the new Electricity Act 2023 can be a single panacea for all the power problems we have in the country since it allows states and companies and individuals to generate, transmit and distribute power, adding that this may likely result in the end of the national grid
He expressed optimism that power generation would soon improve. “There are positive indicators that show within a couple of years or more, the aggregated generation in the country would cross over the celebrated figure of 4000MW much talked about.”
According to him, the lack of integrated and comprehensive energy policy, pieces of legislations, procedures and directives characterised by waste would be things of the past.
Musa advocated that the Renewable Energy Master Plan (REMP) prepared by the Energy Commission of Nigeria can be used by the states as a guide for the development of all renewable energy sources in the country.
Earlier, Speaker of the House of Representatives, Tajudeen Abbas, represented by Rep. Sani Bala, said that practitioners themselves were the major challenge of the power sector.
“We discovered that practitioners themselves were the problem; we then agreed that one of the ways of holding persons accountable for poor and substandard installations in the sector is to put in place a statutory regulation of the conduct of the practitioners.
“Of course, someone somewhere ought to take responsibility for their actions, particularly unethical practices that are capable of leading to power surges and even accidents or sabotage.
“The CIPEN Bill came up at the time the National Assembly was considering the review of the Nigeria Electrical Power Sector Reform Act 2005.
“The timing was also in line with the decision of the House to review legislations relating to the power sector,” Abbas said.

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