Assessment of the Impact of Power Outages on Commercial Consumers (a Case Study of Cold Rooms Consumers at Trans-amadi Area, Port-harcourt)
Chapter One
Aim and Objectives
The aim of this project is to access the electrical power outages effect on commercial cold room operators in the Trans-Amadi area of Port-Harcourt. The specific objectives are;
- To examine the impact of power outages on electricity demands by cold-room operators in Trans-Amadi area of Port-Harcourt.
- To show the frequency distribution and obtain the standard deviation of power outages for a period of three years.
- To show the cost of running a private generating source of power over PHCN using the spearman‘s correlation factor.
- To proffer solutions and recommendations to resolving the power outages issues in Nigeria.
CHAPTER TWO
LITERATURE REVIEW
Historical Emergence of Power Generation and Consumption in Nigeria
The history of Electricity generation in Nigeria date back to 1896 when the first electricity generating machine was installed in Lagos; 24/25 Marina road fifteen years after its introduction in England (Joseph and Adebayo, 2012). The purpose was to supply electricity to the governor‘s house and government house. During this period the total of the generators used then was 60kW.
Towards 1913, the electricity supply was extended to Iddo. In 1922, Ijora ‗A‘ power station was built. The control of electricity in Lagos state was under the public works department (PWD) at this period. In 1950, the electricity corporation of Nigeria (ECN) was established through the ordinance No 15 of 1950 which merged public works department, native authorities and, municipal authority under one control (Onyekwere, 1991). Also in 1962, another body known as Niger Dams Authority (NDA) was established by an act of parliament. The Authority was responsible for the construction and maintenance of dams and other works on the River Niger and elsewhere generating electricity by means of water power, improving navigation and promoting fish brines and irrigation. The energy produced by NDA was sold to ECN for distribution and sales at utility voltages. In first April 1972, the operation of ECN and NDA were merged in a new organization known as National Electric Power Authority (NEPA) (Joseph and Adebayo, 2012). The primary reasons for merging the organizations were:
- It would result in the vesting of the production and the distribution of electricity power supply throughout the country in one organization which will assume responsibility for the financial obligations.
- The integration of the ECN and NDA should result in the more effective utilization ofthe human, financial and other resources available to the electricity supply industry throughout the country.
NEPA as a government monopoly, was plagued with inefficiency which is usually the characteristics of almost all government monopolies in the developing countries and as such, there is constant power outage and blackout all over the country; (Adenikinju; 2003). This problem led to federal government consideration of the privatization of this corporation in the year 2005. This privatized company was renamed Power Holding Company of Nigeria (PHCN) PLC and was broken into 18 independent units which included the transmitting company of Nigeria (TCN),6 generating companies and 11 distributing companies. Each of these companies is to be privatized. Despite this privatization move, the constant power outage still remains a problem to the Nigeria economy (Joseph and Adebayo, 2012)
Historical Blackout in the World
Table 2.1 below represents a summary of some major blackouts previously experienced in the world. Amongst the previous outages, only the incident in the Philippines was caused by a factor similar to the main cause of power outages in Africa. While the causes of major outages in Europe and north America had been attributed to natural disasters or technical faults, the massive blackouts in the Philippines (1992-1994) was caused by inadequate generating capacity. The inadequate capacity brought by poor implementation of energy planning and obsolete power plants resulted in daily average duration of 12 hours outage time. This resulted in economic loss ranging from US$600million-US$800million yearly average (Warwick and Diog, 2004).
Like that of the Philippines, the major cause of power outages in Africa is inadequate installed and generating capacity which resulted from poor planning and implementation. Due to inadequate installed capacity, electricity generation is always low and subsequently causes supply to fall below demand. Inadequate generation results in low power supply and constant blackouts. The continent‘s generating capacity is the lowest amongst the regions in the world and in many cases is less than the installed capacity in some countries. Africa accounts for only 2.65% of the world generating capacity in 2008. Out of this total capacity, South Africa alone contributed about 36%. At 122.6 gigawatts (GW), the entire generating capacity in the continent is less than that of India. Excluding South Africa, the total generating capacity is less than 80 GW, and is about 5GW short of the installed capacity in Spain. Moreover, more than 40% of this installed capacity is not currently generated due to poor maintenance and sometimes vandalisms of equipments.
CHAPTER THREE
METHODOLOGY
Introduction
The previous chapter elaborated extensively on the literature review of the impact of power outages on consumers, using five cold rooms as a case study. However in this chapter, the procedure adopted for gathering data and how these data are analyzed are explained.To accomplish this task, the study is divided into two parts:
- The first part of this work addressed customer‘s responses through questionnaires.
- The second part applied spearman‘s statistical model to analyze the impact of the outages on consumers. The choice of spearman analytical method was informed by irregularity of the data obtained, since one cannot really predict exactly how long it takes to restore power.
Description of the cases
- Cold Room 1: the Genesis cold house Nigeria limited is located at 54Oginigba Port-Harcourt. It was established in 1990 by Mr. Genesis Agu, with a storage capacity of 3500litres, employing over ten workers
- Cold Room 2: the cold ventures Nig. Ltd is located at coca cola road, trans-amadi. Port It was established in the year 2002 byMrChiziOvunda. It has a storage capacity of about 4300litres, employing over twelve staff.
- Cold Room 3: The Anzzy investment Nig ltd. Elekahia road, Trans-amadi Port Harcourt.It was established in the year 2005 by Mrs.SerahAlade. It has a storage capacity of about 3200litres and a staff strength of seven on its payroll.
- Cold Room 4: The new life beverages and cold room, Rainbow crescent Trans-amadiPort hacourt. Is owned and managed by Mrs. Patience Idah, it has a storage capacity of 3000litres with a staff strength of five.
- Cold Room 5: The briggsNig ltd, 12 Abuloma road, Trans-amadi, port Harcourt. Isowned by Mr. Briggs Dagogo. It has a storage capacity of 3000litres with staff strength of five.
Data collection
The data use for analyzing power outages were collected from the daily book of record of power supply outages of Power Holding Company of Nigeria (PHCN). Each parameter of the data was recorded during power outages according to the workers of PHCN. Also, the workers gave explanations for records that were not clear in the data.
Meanwhile, five cold rooms have been selected within the area under consideration to be used in weighing the cost of power supplied by PHCN and the cost of powering with a private generating set. The data used for these costs modeling were gathered using questionnaires. Each of these questionnaires contains the cost spent on power utility for twenty-four different months (2yrs). The five different cold room‘s financial and technical officers supplied the information from their respective power utility records. The following tables 3.1-3.9 below shows data collected within a period of three years.
CHAPTER FOUR
CALCULATIONS, RESULTS AND DISCUSSION
Results of the Study
In this chapter statistical and regression interpretations of the results will be seen as well as customer‘s response of the questionnaire, after which, inferences will be drawn. This chapter is been segregated into various subsections as this will be seen subsequently in a progressive manner.
CHAPTER FIVE
CONCLUSION AND RECOMMENDATION
Conclusion
The importance of electricity to economic development of any nation cannot be over-emphasized. Access to reliable electricity supply increases the productivity and welfare of the society. Given the foregoing it suffices to say that poor electricity supply or lack of quality and effective electricity service delivery is a bane to economic development, it restricts economic growth and development as well as the socio-economic welfare of the people. Poor electricity supply affects business activities in many ways, as it affects productivity and causes damages to materials and machines as many raw materials and some finished products require constant flow of electricity for their storage, and any other cost would result in huge business loss.
From the analysis of the questionnaire as shown in Appendix A, one can draw a conclusion that most firms in Nigeria have developed strategies to cope with this poor electricity supply. Some of these response adjustments include: choice of business, choice of location, output reduction, factor substitution and self generation. While all these strategies are observable amongst Nigerian firms, the most commonly adopted strategy by firms is investment in alternative generation(i.e. complementary capital). Many electricity users both household and firms now find it necessary to make their generation in part or in whole to make up for the inadequate provision resulted from the inefficiency of the public power system. The result from the analysis shows that the cost of unsupplied kilowatt of electricity is significantly higher than the cost of electricity from the public grid using a spear man correlation factor by over 40%, of the cost on running on PHCN, with a standard deviation of 3.78 which is approximately 4 entails that there is high possibility of experiencing repeatable power outages, within the area under study. This can be obviously true as some of the time interval midpoints are relatively low compared to the others and also from the uneven frequencies distributions of the power outages.
Recommendations
In the light of the study that has been conducted, discussion and conclusion reached above, the following recommendations are been suggested.
- Power Holding Company of Nigeria should conduct a forecast of power demand trend within Port Harcourt and across the whole Nigeria. This will enhance the determination of the demand growth rate, so as to enable them carryout equipments and facility upgrades which will match the power supply to power demand with time.
- The government should embark on enormous capital investment across the electrical power chain (Generation, Transmission, Distribution and Sales) is required so as to encourage the Power Holding Company of Nigeria in meeting up with the society power supply demands.
- Improvement in generation capacity.
- Deliberate and sustained distribution network reinforcement/upgrade
- Enforcement of legislation against acts of vandalism on PHCN Installations.
- Mutual understanding between the power Supply Company and customers.
- Prompt payment of electricity bills.
- Comprehensive metering of customers.
- Human Capital Development
- The current demand and supply imbalance can be corrected through additional power generation from the grid and Independent Power Project enhancement.
- Also for further studies, a survey can be carried out on the assessment of electrical power in other parts of the country so as to ascertain other areas that require attentions across transmission and distribution network.
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