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Electricity Generation In Nigeria For The Month Of March by Babatunde Idrisu March has been an interesting month in Nigeria’s electricity sector. Vulnerabilities in the electricity sector was evident as the relative stability of generation enjoyed over the last few months was disrupted by gas pipeline vandalism. Power generation dropped as low as 274MW in the first half of the month. The figure below shows the Electricity generation for March: [img]http://westafricanenergy.files./2016/03/electricity-generation-march.png?w=696[/img] Electricity Generation for March (Data from [1]) A lot of work needs to be done to build the resilience of the grid. It is hoped that with the budget passed, more work goes towards building the resilience and security of electricity infrastructure. Babatunde Idrisu is a PhD Candidate of Energy and Environmental Policy from the University of Delaware. He also has a masters in energy management and policy from the Pennsylvania State University and has conducted multiple research work on renewable energy, energy policy and electricity markets. Reference Nigerian Electricity System Operator, (2016), System Operation Charts, Generation Statistics, Retrieved from: http://www.nsong.org/PerformanceChart.aspx https://westafricanenergy./2016/03/31/electricity-generation-in-nigeria-for-the-month-of-march/ |
Mrbigman1:There has always been new turbines built. That is not what is responsible. Many of the new plants do not even have access to gas. The main reason for sudden improvement is not new plants, it is the gas supply improvement. I am not here to praise or condemn anyone. Obj laid the foundation for power reform and probably deserves the most credit. GEJ played his part as well but improvement was not visible in both cases due to poor gas supply. |
deji68:I am not writing as a Buhari supporter. The new environment has led to a sharp reduction in vandalism. How much of it is down to Buhari is subject to debate. |
modelmike7:The President has not really done much as regards policy but the change in power has changed the dynamics. |
In the last few weeks, there has been steady but improved power generation. The reason for this is simply the sharp reduction in gas pipeline vandalism since the new administration took over. The new government at its inception cancelled contracts that gave certain groups the authority to protect pipelines and handed this responsibility to the country's security forces. This could be one of the reason. Another factor could be a natural consequence of some powerful people involved in vandalism losing power. Nigeria can generate as much as 6,000MW if vandalization can be completely stopped |
Thanks to everyone for their feedback. |
chemali:I agree.. |
chemali:If power improves significantly, there will be a ripple effect felt through out the economy, more jobs and better standard of living. The regulator can ensure that the pains are not felt as the power rises, so an increase can be phased. Investors are moved mainly by the prospect of profit, nothing else. The market must be made attractive for them. |
AWONEYAN:Thank you, sir.. God bless you too |
veuttoutlemonde:It is not necessarily as a result of inefficiency (ofcourse they have their inefficiencies), there are still many challenges to those in the system. |
chemali:If you create a free market for gas production, which i think is needed to improve gas efficiency then generators will incur more cost as gas prices are likely to increase which will translate to tariff rise. If you involve Transcos, access charge to lines will probably increase, that will be passed to consumers. That is why regulation is required to keep changes moderate. |
chemali:Currently the tariffs are lower than cost even with epileptic power. For power to improve significantly, tariffs will have to rise. But i agree that most people will not accept it unless they see visible improvement in power. |
veuttoutlemonde:I mean, solve the challenges faced with gas.. |
veuttoutlemonde:That is why we must solve the problem with gas. |
veuttoutlemonde:The problem is there will be nothing to store. An investor would want to be sure of the benefits of a project before carrying it out. i do not think it pays anyone to pour money into a gas plant just for storage. |
OrlandoOwoh:As things stand, tariffs are not enough to cover the cost of running Discos and Gencos. That is why the government gave a loan over ten years at 10% interest rate to stabilise the market. |
veuttoutlemonde:How will this work? Many barely get enough to run their generators. |
OrlandoOwoh:I disagree.. privatization is not bad. It is a good thing. Perhaps, you can argue about the process. |
goshen26:If nigeria addresses the gas problem today, we can raise generation to about 6,000MW. I think a lot can be done in 4 years. |
ceejayluv:Generators of renewable energy are paid a higher rate for power. What we need is the proper environment to lure investors? |
ceejayluv:Nigeria has special feed in tarifffs for renewable energy, what is missing is legal and regulatory framework to promote. I wrote about renewable energy in Nigeria on my blog. |
Distribution Current State The world bank ranked Nigeria 187 out of 189 in the getting electricity category of its “ease of doing business’ survey of 2015 [9]. Nigeria is ranked 46th out of the 47 Sub-Saharan countries included in the survey. This means that the regulatory environment is not conducive for the starting and operation of a local business. For local businesses, electricity is very valuable and getting access to it is vital but the survey shows that it takes 9 steps , 257 days and 478% of income per capital to get connected in Lagos by the Eko distribution Company (Eko Disco). The chart below shows the days for each of the 9 procedures and the cost as a percentage of income per capita to get connected in Lagos by the Eko Disco: [img]http://westafricanenergy.files./2015/05/disco-connection.png?w=696&h=398[/img] Figure 5: Getting Electricity in Lagos, days and cost (Source: World Bank, Doing Business 2015 report on Nigeria) The time lag is not conducive to promote business operations. The Discos must increase efficiency in connecting business to electrical power. According to the survey, 120 days is taken between application and obtaining a clearance letter from the Disco. That is not acceptable for a country willing to grow its economy and create employment for its citizens. The business environment must be improved upon and made more conducive for entrepreneurs. The Discos face challenges with customer relations (as a result of poor power supply), metering , poor and overloaded infrastructure, vandalisation, low tariffs, poor collection rate of tariffs and poor funding. Proffered Solutions The NERC must ensure the Discos fulfill their obligations to customers and make the necessary investment needed to improve their capacity so as to reduce the load on already existing equipment. The NERC must also ensure that the Discos respond more efficiently to applications for electricity connection by empowering the consumer to take action against the Discos for unexplained prolonged delays. The consumer’s rights must be protected at all times . Conclusion The Nigerian electricity sector is beset with many challenges and would present one of the biggest battles for the Buhari administration. I am convinced that some of these suggestions would improve the situation in the next years if taken on board. What do you think? What must be done to improve Power in Nigeria? Join the conversation Babatunde Idrisu has a masters in energy management and policy from the Pennsylvania State University and has conducted multiple research work on renewable energy, energy policy and electricity markets. Email: Westafricanenergy@gmail.com Twitter: @EnergyWA Facebook: https://www.facebook.com/westafricanenergy?fref=ts http://westafricanenergy./2015/05/15/what-general-buhari-must-do-to-fix-power-in-nigeria/ |
Transmission Current State The transmission capacity in Nigeria today, is estimated to be about 7000 MW according to the Minister of state for Power [7]. In order to boost the reliability and economy of electric supply, there must be constant investment in transmission lines to meet up with growing demand. The Nigerian Minister of power estimated that an annual investment of $1 billion will be required to grow the national grid [8]. Currently, the system is plagued with high loses,vandalisation, low capacity, poor, inadequate and aging infrastructure and a lack of funding. The location of transmission lines can be quite contentious and could lead to lead to disputes with local communities. The government-run Transmission Company of Nigeria (TCN) doubles as the system operator and the transmission service provider. This means that they develop the transmission grid and operate the whole system to ensure reliability and security (i.e resistance to shocks). There are 8 transmission regions in Nigeria: the Kaduna region, the Shiroro region, the Bauchi region, the Osogbo region, the Benin region, the Portharcourt region and the Lagos region. The TCN develops and maintains the facilities in each region. The transmission regions are shown below: [img]http://westafricanenergy.files./2015/05/transmission-regions.jpg?w=696&h=546[/img] Figure 4: Transmission regions in Nigeria (Source: Transmission Commission of Nigeria (TCN)) Proffered Solutions The major question with the transmission grid is: How does the government support the needed investment needed to build Nigeria’s transmission grid? I believe that the best way to go about this is to grant private transmission companies (Transco), monopoly rights to transmission lines in each of the eight regions. The Trancos need to be properly regulated and given the incentive to build more lines. This has impacts on costs and tariffs, so it is important that the access costs to lines are regulated in such a way that the Trancos makes sufficient profits and reliability is assured. Generating plants should also be installed in areas where there is less need for transmission. I believe that National Integrated Power Project (NIPP) plants should be located close to industries and commercial centers to power economic activities there. |
Proffered Solutions 1. The gas problem On February 1, 2015, the Transitional Electricity Market (TEM) took off as part of the continuous evolution of Nigeria electricity market. This move is projected to improve gas supply as gas will be supplied to GENCOs on a contractual basis and there will be legally binding consequences for defaults in gas supply. This is a good step but there is more that can be done to ensure that gas supply is regular and reliable. There needs to be a critical look at the regulatory aspect of gas production and delivery. I believe that there has to be a separation of the regulatory, licencing and policy environments of petroleum and Gas. Currently, the Department of gas resources under the Federal ministry of petroleum resources is responsible for regulating the gas sector. I believe that the gas sector must be given its own priority separate from petroleum for it to thrive. The Petroleum Industry Bill (PIB) makes important recommendations about the gas sector that could significantly improve the situation. The creation of separate licencing and authorization for unassociated gas and the unbundling of the NNPC represent positive steps for the future of gas in Nigeria. The incoming government must push for the passage of the PIB to improve the current condition of the gas industry. The need to promote investment and private participation in the development of gas facilities is imperative to boost the sector. Private investors are encouraged to invest by the prospect of high profitability and the incoming government can support this by making and supporting policies to restructure the industry and by the introduction incentives such as incentive pricing and tax credits. The government could also consider deregulating the gas market so that the free market determines the price of gas. This could have the impact of higher tariff rates but it would ensure the reliability of gas supply to power plants. The influx of investors into Nigeria’s gas industry could significantly boost Nigerian revenue earnings and create jobs for many Nigerians. Another major area which must be tackled to improve gas supply is pipeline vandalism. There is a need to develop effective strategies to tackle pipeline vandalisation by all stake holders in the Gas industry. The government must empower security agencies with the tools, training and encouragement to fight vandalism effectively. There should be stiffer penalties for pipeline vandals because of the losses they inflict on electricity generation and its attendant effects on economic activities. The NNPC and gas companies must employ technology in the surveillance of pipelines so as to prevent pipeline vandalisation and help with early detection. Also, Nigeria needs to take the issue of gas flaring more seriously. Nigeria recently shunned the World bank’s ‘Zero routine flaring by 2030’ summit. The summit was organised to get countries, oil companies and development institution to make a commitment to stop gas flaring by the year 2030. Nigeria is the second largest gas flaring country in the world, flaring 13 billion cubic metres (bcm) annually [6]. The incoming administration must take this seriously and work hard towards ending gas flaring so that Nigeria’s gas can be used for its economic benefit of Nigerians. 2. Decentralise Electricity generation by attracting investment in renewable energy The government should introduce renewable energy policies that ensures that utilities obtain an increasing annual percentage of their power from renewable energy. They can achieve the requirement by buying renewable energy credits from private individuals and companies.This would serve as an incentive to promote small scale renewable energy units for homes and small businesses as well as encourage investment in utility level renewable energy technologies. Individuals would gain credits by feeding power into the grid, the number of credits obtained by power fed into the grid can be bought by Utilities to fulfill their obligations. Tax rebates and low interest loans can be offered to support small renewable energy GENCOs. There are Feed in Tariff for renewable energy generators currently but more must be done to further the industry. A vibrant renewable energy industry would boost employment by providing jobs (both direct and indirect) and promote economic activities Renewable technologies can be very important for remote areas with no connection to the grid as they can easily be deployed there with the right policies in place. For instance, Solar Photovotaics (PV) can be promoted in rural areas by giving subsidies or making credit facilities available to residents. The government must look into this as it could quickly boost electricity accessibility in the country. |
Generation Current State The biggest problem facing electricity generation in Nigeria is the unavailability of gas for powering the power plants. The power sector has developed at a much faster rate than the gas sub-sector but most of the plants been built need to be powered by gas. Consequently, many power plants are inoperational or operating at below their capacities because of a lack of gas. Nigeria has a gas reserve of 187 trillion cubic feet, the 7th largest in the world and a huge potential revenue earner for the country. However, the sector remains largely underdeveloped due to the lack of investment caused by the government controlled prices and a poor regulatory environment. As a result, most of the gas currently produced is flared resulting in the loss of billions of dollars. The poor gas infrastructure and constant pipeline vandalisation are the most important challenges faced by Generation companies (GENCOs). Reported cases of pipeline vandisation has been on the rise in recent years after falling consistently between 2006 and 2009. These vandalisatons affect crude oil, gas and other products and result in significant financial loses. The graph below show cases of pipeline vandalisation annually in Nigeria as reported by the NNPC Annual Statistical Bulletin. [img]http://westafricanenergy.files./2015/05/pipeline-vandalisation.jpg?w=696[/img] Figure 2: Annual cases of Pipeline Vandalisation In November 2014, the Central Bank of Nigeria (CBN) signed an agreement with power and gas firms to release a sum of N213 billion over a period of 10 years at 10% interest rate to start the implementation of the Nigeria Electricity Market Stabilisation Facility (NEMSF)[2]. This loan was necessary because tariffs a re currently not profitable and too low to cover the cost of generating power. This facility would also to help the industry keep on track with the Multi – Year Tariff Order (MYTO) model for generation designed by the Nigerian Electricity Regulatory Commission (NERC).The MYTO is a model drawn up by the NERC to project electricity generation and cost of generation for the next few years. The shortfall in electricity supply is usually compensated by diesel generators employed by companies and private individuals for their daily activities. The cost of generating power for many companies and individuals gulps a major part of their operating expenses and reduces their profit margins. This has a negative impact on economic and industrial growth as many small and medium enterprises find it difficult to cope with the high cost of private generation. As a result, many close shop or run at a smaller scale to minimise expenses. Currently, most of the power generation come from Gas, Hydro and Oil. The chart below shows the distribution of electricity generation by fuel as estimated by the International Energy Agency in 2011. [3] [img]http://westafricanenergy.files./2015/05/electricity-fuel.jpg?w=696[/img] There is a need to improve this fuel mix and encourage investments into renewable, nuclear and other technologies to boost electricity generation across the country. The demand for electricity is estimated to be about 12,800 MW [4] but as at the 13th of May, 2015, generation stood at 3,381.47 MW [5], more than three times less than what is required to meet the demand. There is a need for urgent and decisive intervention to change the situation. |
What General Buhari Must do to fix Power in Nigeria By Babatunde Idrisu As General Buhari assumes office as president of Nigeria on May 29, 2015, one of the biggest challenges his incoming government would face would be how to improve reliability and quality of electricity Supply in Nigeria. The World economic forum ranked Nigeria 141 out of 144 countries in its 2014 quality of electricity supply index [1]. Poor electricity supply has negative impacts on economic growth and Job creation. The quality of electricity supply has a positive correlation with the Gross Domestic Product (GDP) per capita. The scatter plot below shows the relationship between the quality of electricity and the GDP per capita of 148 countries in 2013. [img]http://westafricanenergy.files./2015/05/quality-of-electricity1.jpg?w=696&h=333[/img] Figure 1: Relationship between Quality of electricity Supply and GDP The plot shows that countries with greater quality of electricity supply generally have greater GDP per capita. The prospect of economic growth through the development of electricity infrastructure is a great incentive for Nigeria’s new government to find a solution to the power problem. Currently , electricity generation stands between 2,500-3, 500 MW, grossly inadequate for a population of 170 million people. The unbundling of the Power Holding Company of Nigeria (PHCN) and the privatisation of generation and distribution has not resulted in improved electricity supply. It has been a bumpy ride since the privatisation exercise as the industry still faces numerous challenges in the generation,transmission and distribution of electric power. This is in spite of the enormous investment by the current and previous governments. I read the All Progressive Congress (APC) manifesto to find out their plans to improve the sector and address its many challenges but I did not find anything in terms of actual plans. The problems faced by the sector need a comprehensive, all encompassing approach, this is what informed this piece. In the next few paragraphs, some of the challenges faced by the power sector will be outlined and solutions proffered. |
Dannyset:Lagos needs a good drainage system. They need to work on water purification, storage and distribution because surging oceans will contaminate underground water. The thing with climate change is that it will affect everything, Forests, Agriculture, coastal areas, Ecosystem, water, health. I am happy that fashola might be part of the incoming government, perhaps he can influence things. |
Dannyset:Lagos will be one of the worst hit, already we have seen how the atlantic ocean has eaten deep in the land and merged with Kuramo Lagoon. This is evident at bar beach. Fortunately, the current Lagos state government is the only government in Nigeria that is serious about climate change. The Eko Atlantic will be powered exclusively by renewable energy and there is a lot of work done to prevent Ocean surges. Building mass transit transport system would reduce emissions. The BRT and the light rail are good ideas but there is so much work that is left to be done particularly with flood control. |
cc: Lalasticlala, Seun, Ishilove |
Implications for Energy The impact of climate change on the Nigeria’s Energy sector is significant. Falling annual rainfall and droughts affect the water levels of important electricity infrastructure like the Kainji Dam and lead to electricity shortages. Also, inadequate transmission and distribution facilities are vulnerable to extreme weather conditions and floods. Electricity Access in Nigeria is only about 51% and as such Nigeria cannot afford power cuts from some of its most important facilities. In the oil and gas sector, offshore oil facilities are at risk of damage from rising sea levels, floods and extreme weather conditions. This portends danger for a country whose economy is largely based on oil and gas and is largely dependent on it for its energy needs. In the rural areas, incomplete combustion of wood for cooking releases a Short-Lived Climate Pollutant (SLCP) known as black carbon into the atmosphere. This can be mitigated by the introduction of more efficient biomass cooking stoves and it also offers an opportunity for Nigeria to tap into innovations like the Clean Development Mechanism (CDM) and the REDD (Reduce Emissions from deforestation and forest degradation). Deforestation can be reduced by introducing more efficient cooking methods and the biodiversity of the ecosystem can be preserved. Nigeria has huge potential in renewable energy sources and it is important that it takes necessary steps to improve investment in the renewable energy. There is a need to provide incentives to encourage small scale renewable energy generation amongst private individuals so as to reduce the over dependence on diesel engines. Subsidies for petroleum products should be removed and low carbon options like natural gas must be developed. The Natural gas sub-sector should be reviewed to make it attractive for investment. The approaches to mitigation when it comes to energy are two: Move from high carbon fuels like oil or coal to low carbon fuels like Natural gas or renewable Move to a more efficient energy conversion processes like in the case of providing better cooking options. The establishment of a National Climate Change commission to coordinate climate change activities is long overdue because the effects of climate change are already been felt in all sectors of the Nigerian economy. A proactive approach is needed to help Nigeria adapt to the potentially disastrous effects. Babatunde Idrisu has a masters in energy management and policy from the Pennsylvania State University and has conducted multiple research work on renewable energy, energy policy and electricity markets. Email: Westafricanenergy@gmail.com Twitter: @EnergyWA https://westafricanenergy./2015/04/30/climate-change-challenges-in-nigeria-and-the-implications-for-energy/ |
Climate Change Challenges in Nigeria and the implications for Energy by Babatunde Idrisu The increase in anthropogenic greenhouse gas concentrations in the atmosphere have been identified as the main reason for the observed increase in the globally averaged temperatures since the mid 20th century [1]. Greenhouse gases absorb infrared radiation in the atmosphere and keep the earth warm. The most important of these gases is carbon dioxide (Co2) which is released into the atmosphere mainly by the burning of fossil fuels for human use. Other climate pollutant include Methane (CH4), Nitrous oxide (N 2O), Ozone (O3) , Black carbon (BC) and Chlorofluorocarbons (CFCs). Climate change is a global challenge and as such requires a global approach, this has informed the negotiations under the United Nations Framework Convention on Climate Change (UNFCCC). The developed countries are required to take the lead in the fight against climate change and offer support to developing countries. The Kyoto Protocol requires industrialized countries to make reduction emissions obligations. It introduced the innovation of the Clean Development Mechanism (CDM) where Certified Emission Reductions (CER) from developing countries can be bought to fulfill those obligations. A new treaty is expected to be signed in 2015. There has not been much impact of these efforts in the reduction of emissions as Co2 levels continue to rise. Co2 levels have risen from 314 parts per million (ppm) in 1958 to 402.92 parts per million (ppm) as at the 27th of April, 2015. See below the Keeling curve from the Mauna Loa Observatory at the Scripps Institution of Oceanography showing Co2concentration in the atmosphere. [img]http://westafricanenergy.files./2015/04/keeling-curve2.png?w=696[/img] Figure 1: Keeling curve showing growing Co2 concentrations The unprecedented increase in greenhouse gases emissions have led to the increase of global average air and ocean temperatures, widespread melting of snow and Ice and the global average rise in sea level. This has implications for the mankind and ecosystems, unfortunately Africa is the most vulnerable continent to the effects due to the low levels of Infrastructural development which makes adaptation more difficult, high levels of poverty and limited access to energy. Climate change Challenges in Nigeria Nigeria, with its population of over 150 Million faces enormous challenges in coping with climate change. Some of the challenges are listed below: 1. Legal and Regulatory Framework: The lack of a legal and regulatory framework for dealing with climate change is a big problem. In 2010, the national assembly passed a bill for the creation of a national climate change commission to coordinate the response to climate change but up till date, this commission is non-existent. This limits the amount of aid and support that can be obtained for climate change. The climate change department of the Federal Ministry of Environment developed a document in December, 2011 titled “National Adaption Strategy and Plan of Action on climate change for Nigeria to outline action plans for climate change. In 2012, the Federal Executive council approved a National Policy on Climate Change and Response Strategy (NPCC-RS) but there is a still a lot of work to be done. Renewable Energy focused Incentives for the development of renewable energy sources are limited and the National renewable energy policy is yet to be approved. The actions for mitigation and adaptation are still very limited and the lack of proper legal and regulatory is a major reason for this. 2. Infrastructure: Nigeria’s population growth is expected to put pressure on existing infrastructure and climate change would exacerbate the situation and leave communities vulnerable to very unpleasant conditions. Annual rainfall in Nigeria reduced in Nigeria by an average of 2-8mm between 1941-2000 and annual temperatures is projected to increase by an average of 0.04oC annually till the 2045-2065 period [2]. This poses a significant challenge as there is an increasing demand for water with the growing population but inadequate public water storage and distribution to cater for this. This makes Nigeria particularly vulnerable to droughts and water shortages. Inadequate drainage networks in coastal regions and rising sea levels make those areas vulnerable to floods and the attendant damage to the ecosystem, infrastructure and human lives. 3. There is a dearth of technical expertise in the local population to execute mitigation or adaptation strategies. 4. Awareness: Climate Change is a strange concept to many communities. There is still a great deal of ignorance on climate change and its impacts. 5. Poverty and Finance: Adaptation strategies are usually very capital intensive and most people in rural communities are poor and cannot afford it. |
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