AN ASSESSMENT OF THE ROLE OF REGULATORY BODIES IN ADDRESSING NATIONAL GRID COLLAPSES IN NIGERIA

CHAPTER ONE

INTRODUCTION

1.1 Background of the study

Electricity has become a vital component of modern life globally, fulfilling diverse functions such as employment, transportation, communication, healthcare, education, and daily living activities including lighting, cooking, and temperature regulation. (Adeyemi, 2019). Hence, the lack of power, or its inadequate supply, has consequences for households, businesses, and the entire economy. The importance of electricity has prompted the United Nations and its member nations to prioritise the goal of ensuring universal access to affordable and eco-friendly energy by 2030. 

The commencement of electric power generation in Nigeria dates back to 1896. The Nigeria Electric Supply Company (NESCO) was founded in 1929. The establishment of the Electric Corporation of Nigeria (ECN) in 1951 involved the transfer of NESCO's assets to the new entity. The Nigeria Dams Authority (NDA) was founded in 1962 with the purpose of harnessing Nigeria's hydropower resources (Sadiq et al., 2021). In 1972, the merger of ECN and NDA resulted in the formation of NEPA (National Electric Power Authority), which later transformed into the Power Holding Company of Nigeria. This transformation was done to establish a holding company in preparation for its future unbundling and subsequent privatisation (Sammy et al., 2021). In the past, the electric power sector in Nigeria was under the jurisdiction of the Federal Ministry of Power. The organisation functioned as both the governing body responsible for creating policies and the regulatory authority, primarily carrying out regulatory functions through the Electrical Inspectorate Services, a department within the Ministry (Itina, 2020). 

The NERC, or Nigerian Electricity Regulatory Commission, was established under the EPSRAct of 2005 and officially launched on 30 October 2007, with Ramsome Owan serving as its inaugural Chairman/CEO. Dr. Ransome Owan, a physicist who received his training in the United States and previously worked for GE, has been appointed as the executive Chairman of NERC for a period of five years. His team comprised of other Nigerians residing in the Diaspora who were recruited to work for NERC. NERC was granted additional duties to establish and manage a fund known as the "Power Consumer Assistance Fund." This fund will provide financial support to disadvantaged power consumers in Nigeria. In addition, it was tasked with the responsibility of overseeing the regulation of rural systems and establishing the rates of contribution to be allocated to the Rural Electrification Fund (Promise et al., 2021).

The Commission's authority and responsibilities are outlined in the EPSRAct 2005, which facilitated the privatisation of electric power services in Nigeria and the division of the former National Electricity Power Authority (NEPA)/Power Holding Company of Nigeria (PHCN) (Promise et al., 2021). NERC's main responsibility is to safeguard consumer interests, grant licences to operators and investors, establish and evaluate electricity pricing, and, whenever feasible, encourage competition (Shoronmi, 2024). The primary goal of the Commission is to safeguard the interests of both current and future consumers in regards to electricity produced and transmitted through distribution or transmission systems. Consumers' interests encompass a range of concerns, such as access to inexpensive electricity rates, a secure and dependable power supply, and the mitigation of greenhouse gas emissions.

Despite significant public investment throughout the years, Nigeria continues to have challenges in providing a reliable and uninterrupted electricity supply. The lack of power availability has hindered growth by negatively affecting both the productive sector and educational and workforce participation (Moyo, 2012; Oseni & Pollitt, 2012; Farouk, 2022). The state utility businesses, known as NEPA and later PHCN, continually failed to meet expectations, leading to the need for a reform of the electricity industry. In 2014, this reform led to the privatisation of the generating and distribution sectors of the energy value chain. 

The absence of advancement in the Nigerian electric power sector subsequent to the reform has posed a substantial hindrance for the government, private investors, electrical experts, development partners, and researchers (Eke, 2019). They are currently confronted with the challenge of formulating innovative strategies to tackle this ongoing issue, which is impeding the attainment of energy objectives. A persistent issue in the sector is the repeated occurrence of the National grid collapse, which has afflicted the country for an extended period of time. Orok, 2018

Also, Shoronmi (2024) asserts that the NERC has not fulfilled its main responsibility of safeguarding the welfare of consumers. Over the years, Nigerians have experienced a multitude of grid failures and blackouts. In the last nine years, Nigeria has had more than 200 occurrences of failure in its national energy infrastructure, leading to frequent and extensive power outages. Power outages result in significant economic and societal costs as they hinder people's capacity to meet crucial household and business requirements (Itina, 2020). According to Itina (2020), Nigeria has seen multiple instances of grid failures caused by the grid's failure to quickly adapt to different system dynamics. Although Nigeria's economy has experienced significant expansion, the power infrastructure in the country has failed to adequately supply energy to fulfil the needs of both homes and industries (Bature et al., 2021). This study aims to evaluate the function of regulatory organisations in mitigating the occurrence of National grid collapse in Nigeria.

1.2 Statement of the Problem

The power system in Nigeria has been consistently troubled by frequent and severe grid breakdowns, which have extensive consequences for economic growth, industrial productivity, and the overall well-being of its population. Despite the existence of multiple regulatory organisations responsible for supervising the industry, these collapses persist with worrisome frequency. This ongoing problem indicates possible deficiencies and inefficiencies in the regulatory structure that governs Nigeria's national power infrastructure.

According to Wright (2022), Nigeria's power sector is regulated by several entities, including as the Nigerian Electricity Regulatory Commission (NERC), the Transmission Company of Nigeria (TCN), and the Federal Ministry of Power. Despite their missions, the lack of coordination and clear definition of roles across various institutions leads to severe inefficiencies (Ibukun, 2022). Diverse regulatory entities frequently possess contradictory policies and regulatory criteria, resulting in incongruous execution throughout the industry. According to Wright (2022), this lack of uniformity hinders the establishment of a stable and predictable regulatory environment, which is crucial for efficient grid management. Timi (2023) supports this claim by asserting that the absence of distinct allocation of duties leads to bureaucratic inefficiencies and sluggish decision-making procedures. Delays in making crucial choices about infrastructure upgrades, maintenance, and emergency response typically worsen the instability of the grid.

Omor (2019) argues that the primary issue faced by regulatory agencies in Nigeria is a lack of adequate investment and funding. The electricity sector necessitates significant investment to enhance infrastructure and adopt contemporary technologies. Nevertheless, the presence of ambiguous regulations and a dearth of explicit investment incentives discourage prospective investors. Therefore, the necessity for this investigation arises.

Objectives of the study

The primary objective of this study is to critically assess the role of regulatory bodies in addressing national grid collapses in Nigeria. Specific objectives of this study are to:

To evaluate the extent of National grid collapse in Nigeria

To identify the key factors associated with frequent grid collapses in Nigeria.

To examine specific interventions and programs initiated by regulatory bodies to address grid collapses.

To provide solutions for enhancing the role of regulatory bodies in preventing grid collapses.

1.4 Research Questions

The following research questions which are in line with the objectives of this study will be answered in this study:

What is the extent of National grid collapse in Nigeria?

What are the key factors associated with frequent grid collapses in Nigeria?

What are the specific interventions and programs initiated by regulatory bodies to address grid collapses?

What are the solutions for enhancing the role of regulatory bodies in preventing grid collapses?

1.5 Research Hypotheses

To determine the effectiveness of this study, the following research null hypotheses will be formulated to guide the study and it will be tested at 0.05% levels of significance.:

Ho: The extent of National grid collapse in Nigeria is low.

Ha: The extent of National grid collapse in Nigeria is high

1.6 Significance of the study

The significance of this study rests in its capacity to influence policy reforms, bolster grid stability, encourage economic growth, enhance social results, and contribute to academic and professional knowledge. The study aims to enhance the reliability and efficiency of Nigeria's power infrastructure by conducting a comprehensive assessment of regulatory agencies.

The results derived from this study will aid decision-makers in understanding the tangible implications of persistent grid failures. The findings might emphasise the necessity for targeted policy reforms and regulatory updates, guaranteeing a strong framework that efficiently tackles grid breakdowns.

Moreover, via the examination of the underlying factors and the assessment of the efficacy of existing procedures, the study can pinpoint pragmatic remedies to decrease the occurrence and consequences of grid failures. Additionally, the study can propose optimal methodologies and groundbreaking strategies by drawing on previous case studies and global standards, thereby enhancing the dependability and effectiveness of grid management.

Furthermore, future scholars will utilise it as a thorough examination of the current body of scholarly works. Consequently, other students with an interest in this subject will have the opportunity to utilise this work as reliable knowledge that may be thoroughly evaluated. 

1.7 Scope of the study

Broadly, this study focus is to critically assess the role of regulatory bodies in addressing national grid collapses in Nigeria. Specifically, this study seeks to evaluate the extent of National grid collapse in Nigeria and examine specific interventions and programs initiated by regulatory bodies to address grid collapses. 

Further, this study will focus on examining specific interventions and programs initiated by regulatory bodies to address grid collapses and it also seeks to provide solutions for enhancing the role of regulatory bodies in preventing grid collapses.

1.8 Limitations of the study

As is common in all human endeavors, the researchers faced minor limitations when conducting the study. The main limitation was the lack of extensive literature on the subject, as there is limited data available for an assessment of the role of regulatory bodies in addressing national grid collapses in Nigeria. Consequently, a significant amount of time and effort was necessary to locate the appropriate materials, books, or information and to gather data. 

Additionally, this study is constrained by its small sample size and narrow geographical scope, focusing just on Nigeria. Consequently, the results of this study are not applicable for generalization, thereby leaving room for further research. 

Furthermore, the researcher faced a time constraint due to the need to do this research while also fulfilling the obligations of attending lectures and other educational activities.

1.9 Definition of terms

Voltage collapse: Voltage collapse is the partial or complete loss of end users' or customers' access to the electrical power grid

Power outage: an interruption or failure in the supply of power, especially electricity. the period during which power is lost

National grid: The national grid is an interconnecting system that comprises all generation stations, transmission substations, and distribution substations.

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