#Sunshine 2015 the energy crisis and NIMP: the nexus and perpection for n igeria by engr clement...

transcript

17th November 2015

The Energy Crisis and The NIIMP:The Nexus and Future Perspective for Nigeria

Presented toNigerian Society of Engineers and National Planning Commission

Sunshine Akure 2015 Annual Conference Presented by:

Engr. Clement Adeyinka Oke, CEng, FNSEActing Chairman, Presidential Task Force on Power

2http://www.nigeriapowerreform.org Presidential Task Force on Power

Outline

1. Historical status/Crisis of the Energy Industry

2. Comparative Global and Sub Saharan Africa Energy Consumption

3. Drivers of Energy Development

4. The National Integrated Infrastructure Master Plan - Energy

5. Progress and Status of Power Supply and Sector Reform

6. Lessons for NIIMP

7. Outlook/Way Forward

8. Last Words

9. Final Words

Outline

8. Last Words

9. Final Words

Oil Sector• Sector mostly Government owned midstream with JV participation

upstream• Inadequate/poor funding from the Government

• Untimely funding of JVs

• Lack of commercial operating environment• Regulated petroleum products market and low gas price• Long queues, no fuel and loss of unquantifiable man-hours at stations • Minimal development of gas supply facilities

• Regulatory and legislative uncertainty arising from lack of passage of PIB

• Resultant poor liquidity:• Required Government subsidy on petroleum products a lost opportunity• Lack of maintenance of facilities manifesting in low equipment availability

across the chain• Refusal by Oil and gas investors to grow the business

Historical Status/Crisis of the Energy Industry

• Petroleum filling Stations in Port Harcourt on 13th November 2015 as in June 2015 countrywide

• Substantial loss of man-hours and cost to the economy across the nation and purchase at 150 naira

Power • In 1999 the electric power sector had reached the lowest point in its 100 year history

• Only 19 of 79 generation units were operational

• Average daily generation was 1,750 MW equivalent to about 15 w/person

• No new electric power infrastructure built between 1991 - 1999

• Newest generation plant was commissioned in 1990 (Shiroro)

• Newest transmission line was commissioned in 1989 (Ikeja West – Otta 132 kV)

• An estimated 90 million people were without access to grid electricity.

• Industry losses estimates to be greater than 50%

• Sector was Government owned and vertically integrated• Economics not fundamental for project implementation

• Poor funding from the Government and neglect of the Power Sector

• Suspension of investment in anticipation of privatization • Lack of commercial operating environment

• Low, constant and non-cost reflective tariff• Resultant poor liquidity caused:

• Lack of maintenance of facilities manifesting in low equipment availability across the chain

• Non-payment for gas supply - debt of over 14 billion naira• Refusal by gas suppliers to grow the gas business for power

• Lack of contracts for management of relationships/business interactions normally in place before commencement of projects

• e.g. gas supplies and transportation • Radial power transmission network system• Lack of employment of new staff

• Aging and retirement of existing staff without replacement

• Lack of succession plan• Lack of training and upgrading of facilities

• Closure of all training facilities• Low morale of staff

TO SAKETE

ONITSHA

KAINJI

JEBBA/GS

JEBBA/TS

SHIRORO

BirninKebbi

Kaduna

Bauchi

Damaturu

MaiduguriKano

IIorin

AdoEkiti

EnuguAkwa

Ibadan

Sokoto

Katsina

Hadejia

Jalingo

Abakaliki

Calabar

JIGAWA

KATSINA

SOKOTO

ZAMFARA

KADUNA

NASSARAWA

TARABA

PLATEAU

EBONYI

CROSSRIVER

BAYELSA

ADAMAWA

BAUCHI

ATLANTIC OCEAN

REPUBLICOF BENIN

REPUBLICOF CAMEROON

REPUBLICOF

SAPELEP/ST.

DELTAPOWER ST.

Osogbo

NIGERIA

Potiskum

Niamey

132 kV

Mambila

AFAM POWER ST.

AsabaBenin

EGBINP/ST.

Lokoja

AJAOKUTA

Makurdi

MAKURDIBENUE

Aliade

AKWAIBOM

Owerri

AN AMBRA

PortHarcourt

RIVERS

Umuahia

TRANSMISSION LINE LEGEND

BULK SUPPLY POINT

HYDROELECTRIC POWER STATION

THERMAL POWER STATIONS

330 KVH

330KV LINES (EXISTING) – MULTIPLE CIRCUITS

330KV LINES - EXISTING

330KV LINES (FGN) – MULTIPLE CIRCUITS

330KV LINES (PROPOSED PROJECT) – MULTIPLE CIRCUITS

330KV LINES (NIPP) – MULTIPLE CIRCUITS

330KV LINES - FGN

330KV LINES - NIPP

330KV LINES - PROPOSED PROJECT

ALAGBADO

Abeokuta

Olorunsogo

Weak system, any fracture has high risk of collapse

~60% total load

~70% total generation

Northern Region No Generation

Radial: Single path with power source only at the starting end of the transmission lineLoop: A circular path with a power source at both ends of the transmission line

No Surprise Nigeria has been in deep darkness at night

Outline

8. Last Words

9. Final Words

Comparative Global Energy Consumption

Comparative Sub Saharan Africa Energy Consumption

• Even a significant investment that immediately triples energy consumption per capita still keeps Nigeria low on list

• Most of the countries doing better than Nigeria have higher electrification / electricity coverage (>50%) than Nigeria

Comparative Global and Sub Saharan Africa Energy Consumption

Countries with high electricity consumption are all industrialized

Comparative Global and Sub Saharan Africa Energy Consumption

Resource-rich but inefficient

Reasonable Nigerian development path expectation

Power sector Investment gap

Need > 95% electrification to create significant wealth

Increasing electricity consumption directly correlates to an increasing GDP with projection of $3.6 trillion if electrification rate is > 90%

Outline

8. Last Words

9. Final Words

Drivers of Energy Development

• Population, Electrification and income growth - prerequisites for increased energy demand

• Income growth must be developed by increasing energy intensity

• Most power in Nigeria for residential use

• Energy intensity can be increased by electrification and industrialization - factories, processing and heavy industries

• No country creates wealth by being a raw material supplier

• Nigeria must grow from raw material supplier to a processing country to create and grow wealth for its citizens

Outline

8. Last Words

9. Final Words

NIIMP - Domestic Sources of Energy for Nigeria

• Crude Oil and petroleum products• Petrol• Diesel• Kerosene• LPG

• Natural Gas• Renewables

• Hydro• Solar• Wind • Biomass

• Wood• Coal• Nuclear Energy

Crude Oil • Reserves – 37.2 billion barrels as of 1st Jan 2015• Among top 10 producers in the world• Production estimated at 2.5 million barrels per day• Equivalent to just over 40 years of production • Need to use efficiently and grow reserves to increase life • Refining capacity of 445,000 barrels per day • Need to ensure functionality of existing refineries and build

more to grow income and create wealth to increase demand for energy while assuring investors of adequate returns

• Petroleum products and derivatives used as fuel for transportation, industry and feedstock for petrochemical industries

NIIMP - Domestic Sources of Energy for NigeriaNatural Gas • Reserves – 188 TCF of ‘Sweet’ (no H2S) associated and non-

associated gas as of 1st Jan 2015 with a potential of 600 TCF• Among the top 10 in the world and largest reserve in Africa• Most production is exported as LNG and 4th Largest LNG

producer in the world• Domestic production in excess of 2 Bcfd and supplies over 75%

of power supply to Nigeria• With a production estimated life of about 40 years if no effort

is made to grow it• Need to use efficiently and grow reserves to increase life • Industrial use consist of fuels for plants and heating and

petrochemical/fertilizer feedstock

NIIMP - Domestic Sources of Energy for NigeriaNatural Gas • Transported in natural state in pipelines or Compressed

Natural Gas (CNG)• Option of LNG transportation under consideration for

domestic utilization • International pipeline export to West Africa (Benin, Togo and

Ghana) though Ghana now has gas and will reduce dependence on Nigeria

• Potential for highest efficiency (Cogeneration and Tri Generation Options)

• Best for the environment among hydrocarbons• Would continue to be major source of power supply in

Nigeria provided contractual arrangement and payment is made as and when due.

SC/CC Configuration Schematics and Energy Balance Highest Efficiency with CC and 50% additional power

GENERATOR COMPRESSOR8 EXPANDER

IN LET AIRFUEL

COMBUSTOR

TURBINEEXHAUST

Gas Turbine

Simplified Simple Cycle Schematic

GASTURBINEEXHAUST

STEAMTURBINE GENERATOR

CONDENSOR

COOLING WATER

Simplified Combined Cycle (Back-End) Schematic

50 %Electricity

2 %Other

20 %Stack Gas

28 %Cooling Water

Energy Balance for Combined Cycle Configuration

65 %GT Exhaust

34 %Electricity

1 %Other

Energy Balance for Simple Cycle Configuration

Renewables • Hydro

• Currently responsible for about 25% of generation from Kainji, Jebba and Shiroro with capacity of 1260 MW

• Zungeru with capacity of 700 MW under construction and commence operation in 2019

• Mambilla with capacity of 3,050 MW under development • Many small hydro projects are proposed (Gurara 2 – 360 MW) under

construction or operational/completed (Kashimbilla 40MW, Gurara 1 – 40 MW, Kurra falls in Plateau State)

• Potential for future mini hydro is in excess of 300 MW• Hydros located mostly in the north which is excellent for system stability• Large hydros are expensive to construct • Multipurpose as it supplies power, water, transportation, fishing and

irrigation• A disadvantage is its seasonality and susceptible to environmental

behaviors

NIIMP - Zungeru and Mambilla Hydro Power Plants700 MW Zungeru Hydro Power Plant

NIIMP - Domestic Sources of Energy for NigeriaRenewables • Solar

• Tremendous potential in the Northern part of the country as shown in map

• Major component for diversification and grid system stability

• Technology becoming increasingly competitive

• Could have a high CAPEX but OPEX is minimal

• No large scale installation yet in Nigeria but many under consideration especially in the Northern States

• Expected to ultimately occupy 10 to 20% of the grid

• Excellent for micro grids but will require storage facilities for sustainability or with alternative fuel back up

NIIMP - Domestic Sources of Energy for NigeriaRenewables • Solar Map of Nigeria

• Highest solar radiation is in the most northern part of Nigeria

• Land mass is available for solar farms

• In the vicinity of cities and grid coverage solar energy could be used for system stability and voltage control

• Most of the area is remote hence conducive for rural supply and micro grid outside the cities

• Cooperation of DISCOs would be required

NIIMP - Domestic Sources of Energy for NigeriaRenewables Wind

• A 10 MW wind farm is nearing completion in Katsina

• Very good potential for electricity:Jigawa, Kano, Katsina, Kaduna, Nasarawa, Zamfara, Sokoto, Bauchi, Plateau, Yobe

• Good potential for electricityOyo, Ogun, Lagos, Kwara, Niger, Kebbi, Borno, Abia, Akwa Ibom, Anambra, Benue, Cross River, Ebonyi, Imo

• Good potential for water pumpingAbuja, Gombe, Adamawa, Taraba, Osun, Ekiti, Ondo, Edo, Kogi, Delta, Bayelsa, Rivers

NIIMP - Domestic Sources of Energy for NigeriaRenewables Biomass

• Ideal for farmlands and remote locations • Could be a source of energy for power supply for settlements and for

processing of produce• Creates employment opportunities and improved quality of lives especially in

remote locations • A means of creating wealth from waste

Wood • A means of cooking for the low income and in remote locations• Contributor to deforestation • Use must be discouraged and alternative fuels like kerosene and liquid

petroleum gas (LPG) to be introduced even if at a subsidized rate for remote locations and low income

• If it must be used efficient wood stove must be utilized under a reforestation arrangement

NIIMP - Domestic Sources of Energy for NigeriaCoal • Currently the largest source of power generation in the world• Coal is available in substantial quantities in Benue, Enugu, Gombe, Kogi and

Nasarawa States• Quantum of coal reserve yet to be officially quantified but proven estimated as

639 million tons and inferred reserves as 2.75 billon tons• Reserves expected to sustain between 5,000 and 10,000 MW• A major source of diversification as base load as quality of coal is good• Clean coal technology available to reduce effect on environment• May have challenge funding due to environmental considerations • Several mines concessioned and Zuma producing for industries in Kogi state

while implementing a 300 MW power plant t grow to 1,200 MW • Other potential uses of coal are: Fertilizers Insecticide sprays, Dyes, Tar, Paints,

Plastics, Disinfectants, Explosives, Detergents, Soap, Carbon Brushes, Odorants, Battery Acid, Photo chemicals, Printing ink, Perfumes, Carbon Electrodes, Steel production (Smelting), Cement and Briquettes

NIIMP - Potential Source of Energy for Nigeria

Nuclear • The must be in the long term plan for Nigeria• Safety, regulatory and licensing issues must be dealt with

early• Capacity building on safety and maintenance a

prerequisite• If installed it must be on basis of base load to assure

availability and minimize risk• As grid becomes bigger the benefit and risk of installation

will reduce

Oil and Gas Targets2018• Revamp existing refineries and build new refining capacity • Ensure adequate gas supply for power generation needs• Reduce theft, vandalism and oil spill• Increase oil & gas production and reserves• Increase local content and human capacity • Grow oil & gas based petrochemical manufacturing capacity▪2023• Increase local refining capacity to fully meet national demand• Increase gas production, handling and transport capacity in line with power

sector needs• Increase oil & gas reserves and production• Zero oil/crude theft and minimal oil spill• Promote use of sustainable fuels• Link to regional gas network2043• Increase production and refining capacity in line with national demand

growth• Reduce Green House Gas emissions to be in line with the Kyoto Protocol• Eliminate operation-related oil spill• Align with global health and safety practices.

TWG: Energy

National Integrated Infrastructure Master Plan Targets

2013 2018 2023 20430

25002750

445750

Production Capacity - Oil (kbpd) Refining Capacity (kbpd)

National Projection Oil & Gas (2013 - 2043)

National Integrated Infrastructure Master Plan

• Must Increase oil reserve to grow production and refining capacities• Operation must ensure sustainability and cost recovery with returns• Increased domestic utilization may result in reduced foreign income

2013 2018 2023 20430

100000

120000

140000

160000

180000

7850 11000 15000

300002747538500

105000

41212.5

157500

Production Capacity - Gas (mcfpd)Production Capacity: Gas-to-Power Equivalent - Simple cycle (MW)

Gas Production Projection (2013 - 2043)

• Must Increase gas reserve to grow supply to power and industries• Must encourage use of combined cycle for optimization• Overal program behind schedule

National Integrated Infrastructure Master Plan Targets

Power Targets2018• Increase efficiency of existing power infrastructure – increase load

factor• Decrease losses in transmission, as well as distribution, billing and

collection• Revamp and expand transmission network to match capacity increase

in generation• Grow generation capacity by ca.4.5 GW per annum – ca. 70% gas, 30%

hydro and other sources• Increase human capacity through improved quality and quantity of

training 2023• Ramp up and stabilize capacity additions at very high rate of 8 -10

GW / annum• Expand the national grid in line with capacity addition and implement

smart grid technologies• Develop hydro and other renewable generation capacity to maintain

70:30 fossil fuels to renewable ratio• Develop human capacity2043• Reduce transport and consumption losses to global standards• Increase share of renewable energy to 35%• Export electricity to other ECOWAS countries

2013 2018 2023 20430

100000

150000

200000

250000

300000

350000

400000

450000

500000

700020000

350000

450000

6000 36000

420000

2747538500 52500

105000

Generation Capacity (MW) Transmission Capacity (MW)Distribution Capacity (MW) Production Capacity: Gas-to Power Equivalent (MW)

National Projection Power (2013 - 2043)

• Development along the fuel to power chain must be coordinated and integrated• Efficient gas utilization with renewables and other fuels to make up generation • With respect for contractual relationship and • Costs and pricing to assure sustainability

• Refineries and storage depots and

• Crude, products and gas pipelines to be constructed yet to be committed

• Hydro and Thermal Power plants to be constructed yet to be defined or committed to

• Implementation is delayed

• Consider Birnin Kebbi for Solar and

• Bauchi/Gombe for Coal subject to available coal assessment

• NIIMP may need to be updated

ELP SYSTEM SCHEMATIC INCLUDING EXPANSION

PS 524”40 Km

PS 436”

105 Km

97 KmPS 1

24”OBEN

Warri GTP

UTOROGU

24”C/N

28 KmE/N

20”28 Km

Chevron Escravos Gas Plant

Shell OdidiUghelli E

EwekoroOlorunsogo

Omotosho Ajaokuta

Geregu

Panoco

New or Upgraded Gas Input

PHCN/NIPP Power Plants

24” ELP Loop Phase 1 Escravos to Warri GTP

36” ELP Loop Phase 2 Oben Node to Itoki

30” ELP Loop Phase 1- Warri GTP to Oben Node

Oben Node

Ihovbor

Existing Operating ELP Pipelines

E/Beach/Ogidigben/Additional West

Jones Creek

Sapele

Sapele LTX

ELOPS - FUTURESNG

GasLink

NPDC Oredo to Panoco Line

Obajana

Obriafu-Obrikom-Oben (OB3)Gas pipeline under construction

Presidential Task Force on Power

Onne STN Notore

Alscon Ikot-Abasi

Ibom Power

Unicem / Cement

Afam VI (Shell IPP)

Alaoji PHCN

Obigbo Node

Geometric (Aba) / Power

Imo River

Shell Okoloma Gas Plant

24” X 37KM

18” X 128KM

16” X 44.4KM

Afam I – V PHCN

•The Node is supplied gas from AGG and NAG plants at Obigbo.•Also, the node receives gas from Agbada, Imo River and Alakiri AG and Okoloma Gas plant.

UKANAKAFU Pigging Station

, •Cement factory at Calabar; NGC/Oando construcing line from the fEastern grid to Calabar.

MPN /Oso

ABA INDUSTRIES

Eleme STN

14” X 32KM

14” X19km

Gas Production PlantPower Plant

Gas PRMS & consumerExisting NGC PipelinesPlanned NGC Pipelines

Planned SPDC pipelinesSPDC Pipelines

Shell Alakiri Gas Plant

12” x 32km

Alaoji Spur

24” x

12” x

18” x 5km

14” X 17KM

Shell / Agbada NAG

20” X 56KM

NNPC EASTERN PIPELINE NETWORK SHOWING THE PROPOSED PIPELINE TO ALAOJI PHCN

NOPL from Rumuji

7Energy Uquo Gas Plant

Outline

8. Last Words

9. Final Words

Progress and Status of Power Supply and Sector Reform

• Privatization and Commercialization • Prevent deterioration of service delivery • PHCN successor companies handed to new owners in 2013/2014 except Afam Power plant• TEM declared but not effective (remain in the pre-TEM stage) • Negotiating cost reflective tariff• Finalizing NIPP gas supply and power purchase contracts • Require Discos provide LCs for TEM contract activation• Ring fencing and unbundling TCN

• New power peak of 4810.7 MW attained on 25th August 2015 and • New Energy peak of 104,794.26 MWh reached on 23rd September 2015• Highest monthly average daily energy sent out of 94,110 MWh in September 2015

Vandalism

Vandalized Crude Oil Pipeline

Clamping Operation at EriemuSectional Replacement at Oteghele

Tap points for stealing crude

Issues• Market Illiquidity

• Low tariff• High losses along the electricity power chain including Power theft• Incomplete collection• Inaccurate data such as customers numbers • Lack of access to financing and long-term funding

• Gas and Power Debts• Gas debts increasing and power suppliers debt growing • CBN Intervention fund• Will affect maintenance and sustainability

• Vandalism• Blown gas lines (ELP A disrupted 4 times from January to March 2015)• Crude oil theft and sabotage (TNP and TFP virtually daily interruptions)

• Shortage of Gas Supply in the west

Issues• Stranded gas and power in the east - Alaoji, Afam VI, Gbarain, Omoku,

Calabar• Incomplete plants and lack of evacuation

• Limited power evacuation/delivery to consumers • High System Frequency and transmission/distribution bottlenecks• DisCo rejection of loads

• Inadequate funding of TCN • Poor Communications – SCADA non effective and uncompleted• Uncertainty of defined market size and locations

• Lack of current load study• Limitation on transmission system design and management

• Delay in completion of projects• Lack of timely access to right of ways• Lack of coordination across the chain (Gas, power plants, transmission)• Inadequate Project Management resulting in late completion

Issues• Regulatory environment• Ineffective contracts• Market indiscipline • Inadequate customer metering • Lack of feasibility studies before commencement of major

projects• Rubs opportunity for front end loading of projects • Minimal risk reduction

• Lack of or inadequate commercial orientation • Need to be developed from University/Educational level

including entrepreneurship• Academicians need to have industrial exposure and vise versa

to appreciate industry problems and modify curriculum accordingly

Outline

8. Last Words

9. Final Words

Lessons for NIIMP• Recommended Mandatory requirements

• Feasibility and other technical and commercial studies to identify and optimize options prior to commencement of projects

• Determine least cost solution • Schedule must be coordinated along the chain and risked • Need to understand the full scope of business requirements

from beginning to end of project e.g gas is sold before it is developed, Load demand required for Transmission development

• Same philosophy will be applicable to coal and other energy sources for domestic utilization

• Lessons learned to be incorporated as a philosophy• Contracts/Agreements like GSA/GTA/PPA must be put in place to

guide relationships and to be a precondition for final investment decision (FID)

Lessons for NIIMP• Project and business implementation must be on a commercial basis

to assure sustainability and provide investor confidence• Non payment for services rendered is guarantee for failure/scare• Government revenue has dropped - no guarantee to improve

• Excess crude in market estimated at 3 billion barrels• Iran and Libya resumption of production will increase crude surplus in

market• US already producing tight oil and shale gas• China and other countries may shift emphasis from industrialization

to services reducing demand

• There is a need for effecting discipline in the market place to assure compliance

• Training must be given priority always to assure quality in development of staff – Academia and Industry must work together

• Diversification of energy sources is a given and not an option • Project Management must be improved and land acquisition

optimized including increased local ideas and content development

Outline

8. Last Words

9. Final Words

Outlook - Short Term Plan - [December 2015]

Key Activities & Assumptions• Available gas supply limits

customer load demand to 5,251 MW (includes hydro provision of 620 MW)

• NIPP North - South transmission Loop to be partially completed and operational to liberate stranded power in the east

• All earmarked gas and transmission projects would be completed to attain projected limits

Outlook - Short Term Plan - 6,500 MW Capability

• Completion of ongoing NIPP projects (identified in red) will improve grid wheeling capacity

• The more loops on the system, the better resistant the grid is to system collapse

Completed

Ongoing

Completed

Outlook - Medium Term Plan - [December 2017]

Key Activities & Assumptions• Transmission wheeling capability limits

customer load demand to 8,000 MW• Funding provided for transmission

projects• All earmarked gas and transmission

projects to be completed• Commence diversifying the

generation portfolio• Commissioned power plants

• Calabar 562.5 MW• Alaoji 450 MW • Ikot Abassi 300 MW• Gbarain 225 MW• Omoku 225 MW• Kaduna 215 MW• Paras Energy 96 MW• Delta 90 MW• Bresson AS 90 MW• Notore Power 25 MW• Kashimbilla 40 MW• Gurara 30 MW• Mabon 40 MW hydro• LR Aaron 100 MW solar • Katsina 10 MW wind farm

Outlook - Long Term Plan - [December 2020] Key Activities & Assumptions

• Transmission wheeling capability limits customer load demand to 11,000 MW

• All earmarked gas and transmission projects to be completed

• Funding provided for transmission projects Mambilla 3,050 MW hydro construction started

• 25% of renewable generation NERC licenses operational

• Commissioned power plants• Zungeru 700 MW hydro• Century Power 500 MW• Geometric 500 MW• Azura Power 500 MW• Zuma Energy 400 MW• Gurara II 360 MW hydro• Mobil 250 MW• JBS 100 MW wind farm• Symbion 50 MW• Synergent 50 MW solar

Outlook - Long Term Plan – 2020 Power Stations in Nigeria

Deliverable generation capacity expected by December, 2020: 11,306 MW

Total Generation Nameplate Capacity Rating: 15,310 MW • Gas – 12,611 MW • Hydro – 2,125 MW• Solar – 70 MW

• Synergist, other• Wind – 110 MW

• JBS, Katsina• Other Renewable –

394 MW

Outlook - Summary - 5 Year Projections

Way Forward • The NIIMP implementation is delayed and gap is yawning• The revenue of the Government of Nigeria has reduced substantially• No guarantee the income to Nigeria will be substantially different

from oil unless we diversify the economy• Oil and Gas reserves must be grown to assure availability beyond

current 40 years exhaustion calculated• Vandalism of Oil and Gas facilities must be exterminated• Uncertainty arising from non finalization of PIB must be removed• Sustainability (preferably without subsidy) and full cost recovery

must be major parameters for project conception and implementation to attract investment and PPPs into the country

• Nigeria must learn to spend other people’s/countries money • Available resources must be used optimally e.g combined cycle to be

a standard of installation to increase life of resource

Way Forward• Coordinated integration is not an option from beginning to end of

chain of activities utilizing data• Commence development of new facilities to meet demand and catch

up on NIIMP projections • Carry out feasibility studies/Load demand studies• Ensure projects are commercially viable• Sign agreements (Gas supply and transportation, PPAs, Transmission

e.t.c.) before Financial Investment Decisions (FID)• Install plants limited to not more than 10% of grid capacity and

increase single units capacity as the grid grows• Government securitization may be required in the early days

• Conservation of foreign currency and local content development and utilization to generate wealth and grow income must be embarked on for oil and gas production, refining and power generation to distribution

• Solve issues related to land acquisition

Way Forward• Diversification of energy source - a must for stability and reliability

• Gas with combined cycle preferably and to be dominant in the interim especially in the grid

• Renewables - small and large hydros, solar, wind, biomass for grid, mini grids and remote locations to increase electrification

• Coal and • ultimately nuclear

• The foundation for the offtake and development of the new power sector in Nigeria has been laid in the Power Sector Reform.

• Progress reform to market viability and ultimate development of willing-buyer / willing-seller concept and basis for transactions

• Interaction between Academia and industry must be encouraged to tie curriculum and training of new generation graduates for industry

• The Engineering professional and community seated herein must take the lead technically, commercially and politically

Outline

8. Last Words

9. Final Words

Last Words• Nigeria’s oil income is capped for now and the foreseeable

future implying revenue shortage hence must diversify its income urgently

• Nigeria is blessed with abundant and multiple energy resources

• The Oil and Gas portfolio must be grown to exceed 40 years to retain relevance despite the low international price

• We must reduce our national losses on queueing by building more domestic refineries and paying economic price for petroleum products

• Nigeria’s power generation and utilization is one of the lowest in Africa

• The population is increasing and quality of life/income need to be enhanced dictating the need for more power for residential and especially industrial utilization

Last Words• To change the status quo there is a need for the energy sources to be

diversified and also be utilized for the generality of the population (grid or remote) though thermal is expected still to be dominant

• Birnin Kebbi to be considered for solar and Bauchi/Gombe for coal fired plants subject to economic evaluation

• All projects must be implemented on basis of self sustainability and to be commercially viable with a continuation of the Reform

• Will assure investors to come to Nigeria if ‘money is on the table’ • Concept of Government subsidy is a recipe for non performance though

Guarantee provision may be unavoidable • World Bank PRG requirement is being fulfilled• Use money for self generation to pay for power • Cater for low income through a low threshold of low tariff and

bourgeois customers paying the difference• Regulator in the industries/sectors must be consistent, reliable and

respectable to give comfort to investors and consumers

Last Words• We must use other people’s money for development of the country

and individuals as per the practice in the developed countries• Best way to create jobs and wealth • We need functional national identification and credit monitoring system

• Cooperation and Research between academia and industry is a mandatory requirement to develop and empower people, new ideas, reduce cost and provide jobs domestically

• Academic reorientation to applicability of knowledge to solve problems• Industry to fund research relevant to its needs

• Vandalism must be stopped• Economic Loss / hemorrhage from crude oil theft• Constant repairs of same sections of crude and gas pipeline facilities • Sustainability of power supply • We need surveillance, supervision, security, community involvement

and punishment

Outline

8. Last Words

9. Final Words

Final Words• We the Nigerian Engineers and Professionals do not have an option

but to lead• We are known as the best in all our educational careers • We cannot afford to disappoint the nation• We need to be brave, bold, professional and honest to squarely face

the challenge of making Nigeria a prosperous nation with a diversified economy by being ready to undertake locally like the Chinese:

• Studies• Designs• Procurement• Fabrication • Construction• Commissioning • Operation • Maintenance of engineering and technical facilities and • Training of the next generation• Project Management

Thank You

Medium Term

Long Term

Legacy

Implementation of National Integrated Infrastructure Master Plan (NIIMP) will change Nigeria to an illuminated and industrialized country

Last Words

TuOS – Transmission Use of ServicePPA – Power Purchase AgreementO+M – Operations and Maintenance

Gas Supply/ Transport Tariff