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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
3http://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
4http://www.nigeriapowerreform.org Presidential Task Force on Power
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
5http://www.nigeriapowerreform.org Presidential Task Force on Power
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
6http://www.nigeriapowerreform.org Presidential Task Force on Power
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)
Historical Status/Crisis of the Energy Industry
7http://www.nigeriapowerreform.org Presidential Task Force on Power
• 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
Historical Status/Crisis of the Energy Industry
8http://www.nigeriapowerreform.org Presidential Task Force on 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
Historical Status/Crisis of the Energy Industry
9http://www.nigeriapowerreform.org Presidential Task Force on Power
Historical Status/Crisis of the Energy Industry
TO SAKETE
ONITSHA
KAINJI
JEBBA/GS
JEBBA/TS
SHIRORO
Ikeja
Akure
Uyo
BirninKebbi
Minna
Kaduna
Abuja
Jos
Bauchi
Gombe
Damaturu
MaiduguriKano
IIorin
AdoEkiti
EnuguAkwa
Ibadan
Sokoto
Gusau
Katsina
Hadejia
Jalingo
Yola
Abakaliki
Calabar
JIGAWA
KANO
KATSINA
SOKOTO
ZAMFARA
KEBBI
KWARA
KADUNA
NIGER
NASSARAWA
TARABA
YOBE
PLATEAU
EBONYI
CROSSRIVER
OSUN
BAYELSA
EDO
DELTA
ONDO
OYO
IMO
ADAMAWA
BORNO
GOMBE
BAUCHI
EKITI
LAGOS
ATLANTIC OCEAN
NIGER
REPUBLICOF BENIN
REPUBLICOF CAMEROON
REPUBLICOF
CHAD
SAPELEP/ST.
DELTAPOWER ST.
OGUN
Osogbo
NIGERIA
Potiskum
Niamey
132 kV
Mambila
Bali
AFAM POWER ST.
AsabaBenin
EGBINP/ST.
Lokoja
ABUJA
AJAOKUTA
Lafia
Makurdi
MAKURDIBENUE
KOGI
ENUGU
Aliade
ABIA
AKWAIBOM
Owerri
AN AMBRA
PortHarcourt
RIVERS
Umuahia
2
2
2
22 2
2
4
3
TRANSMISSION LINE LEGEND
BULK SUPPLY POINT
HYDROELECTRIC POWER STATION
THERMAL POWER STATIONS
330 KVH
330KV LINES (EXISTING) – MULTIPLE CIRCUITS
330KV LINES - EXISTING
2
2
2
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
2
ALAGBADO
Abeokuta
Olorunsogo
9
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
10http://www.nigeriapowerreform.org Presidential Task Force on Power
No Surprise Nigeria has been in deep darkness at night
Historical Status/Crisis of the Energy Industry
11http://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
12http://www.nigeriapowerreform.org Presidential Task Force on Power
Comparative Global Energy Consumption
13http://www.nigeriapowerreform.org Presidential Task Force on Power
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
14http://www.nigeriapowerreform.org Presidential Task Force on Power
Comparative Global and Sub Saharan Africa Energy Consumption
Countries with high electricity consumption are all industrialized
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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%
16http://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
17http://www.nigeriapowerreform.org Presidential Task Force on Power
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
18http://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
19http://www.nigeriapowerreform.org Presidential Task Force on Power
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
20http://www.nigeriapowerreform.org Presidential Task Force on Power
NIIMP - Domestic Sources of Energy for Nigeria
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
21http://www.nigeriapowerreform.org Presidential Task Force on Power
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
22http://www.nigeriapowerreform.org Presidential Task Force on Power
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.
23http://www.nigeriapowerreform.org Presidential Task Force on Power
SC/CC Configuration Schematics and Energy Balance Highest Efficiency with CC and 50% additional power
23
GENERATOR COMPRESSOR8 EXPANDER
IN LET AIRFUEL
COMBUSTOR
TURBINEEXHAUST
Gas Turbine
Simplified Simple Cycle Schematic
GASTURBINEEXHAUST
STEAMTURBINE GENERATOR
CONDENSOR
COOLING WATER
HRSG
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
24http://www.nigeriapowerreform.org Presidential Task Force on Power
NIIMP - Domestic Sources of Energy for Nigeria
24
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
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NIIMP - Zungeru and Mambilla Hydro Power Plants700 MW Zungeru Hydro Power Plant
26http://www.nigeriapowerreform.org Presidential Task Force on Power
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
27http://www.nigeriapowerreform.org Presidential Task Force on Power
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
28http://www.nigeriapowerreform.org Presidential Task Force on Power
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
29http://www.nigeriapowerreform.org Presidential Task Force on Power
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
30http://www.nigeriapowerreform.org Presidential Task Force on Power
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
31http://www.nigeriapowerreform.org Presidential Task Force on Power
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
32http://www.nigeriapowerreform.org Presidential Task Force on Power
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
33http://www.nigeriapowerreform.org Presidential Task Force on Power
2013 2018 2023 20430
500
1000
1500
2000
2500
3000
3500
4000
4500
25002750
3000
4000
445750
1000
2000
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
34http://www.nigeriapowerreform.org Presidential Task Force on Power
2013 2018 2023 20430
20000
40000
60000
80000
100000
120000
140000
160000
180000
7850 11000 15000
300002747538500
52500
105000
41212.5
57750
78750
157500
Production Capacity - Gas (mcfpd)Production Capacity: Gas-to-Power Equivalent - Simple cycle (MW)
Gas Production Projection (2013 - 2043)
National Integrated Infrastructure Master Plan
• Must Increase gas reserve to grow supply to power and industries• Must encourage use of combined cycle for optimization• Overal program behind schedule
35http://www.nigeriapowerreform.org Presidential Task Force on Power
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
36http://www.nigeriapowerreform.org Presidential Task Force on Power
2013 2018 2023 20430
50000
100000
150000
200000
250000
300000
350000
400000
450000
500000
700020000
56000
350000
5000
40000
75000
450000
6000 36000
67000
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)
National Integrated Infrastructure Master Plan
• 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
37http://www.nigeriapowerreform.org Presidential Task Force on Power
• 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
National Integrated Infrastructure Master Plan
ELP SYSTEM SCHEMATIC INCLUDING EXPANSION
PS 524”40 Km
PS 436”
105 Km
PS 3
91 Km
PS 2
97 KmPS 1
24”OBEN
18 Km
36”
50 Km
Warri GTP
30”
32 Km
UTOROGU
24”C/N
28 KmE/N
20”28 Km
Egbin
Chevron Escravos Gas Plant
36”
36”
Shell OdidiUghelli E
WAGP
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
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
Odidi
Sapele
Sapele LTX
Delta
ELOPS - FUTURESNG
GasLink
NPDC
NPDC Oredo to Panoco Line
Obajana
Obriafu-Obrikom-Oben (OB3)Gas pipeline under construction
Presidential Task Force on Power
QIT
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
12”
”
24 x
22km
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
6”
Shell Alakiri Gas Plant
12” x 32km
Alaoji Spur
24” x
24
km
12” x
22k
m
18” x 5km
14” X 17KM
Shell / Agbada NAG
20” X 56KM
14”
NNPC EASTERN PIPELINE NETWORK SHOWING THE PROPOSED PIPELINE TO ALAOJI PHCN
NOPL from Rumuji
NOPL from Rumuji
7Energy Uquo Gas Plant
40http://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
41http://www.nigeriapowerreform.org Presidential Task Force on Power
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
42http://www.nigeriapowerreform.org Presidential Task Force on Power
Progress and Status of Power Supply and Sector Reform
• 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
43http://www.nigeriapowerreform.org Presidential Task Force on Power
Progress and Status of Power Supply and Sector Reform
Vandalism
Vandalized Crude Oil Pipeline
44
Clamping Operation at EriemuSectional Replacement at Oteghele
Progress and Status of Power Supply and Sector Reform
Tap points for stealing crude
45http://www.nigeriapowerreform.org Presidential Task Force on Power
Progress and Status of Power Supply and Sector Reform
46http://www.nigeriapowerreform.org Presidential Task Force on Power
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
Progress and Status of Power Supply and Sector Reform
47http://www.nigeriapowerreform.org Presidential Task Force on Power
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
Progress and Status of Power Supply and Sector Reform
48http://www.nigeriapowerreform.org Presidential Task Force on Power
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
Progress and Status of Power Supply and Sector Reform
49http://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
50http://www.nigeriapowerreform.org Presidential Task Force on Power
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)
51http://www.nigeriapowerreform.org Presidential Task Force on Power
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
52http://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
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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
4810
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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
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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
4810
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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
4810
57http://www.nigeriapowerreform.org Presidential Task Force on Power
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
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Outlook - Summary - 5 Year Projections
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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
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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
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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
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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
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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
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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
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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
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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
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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
Today
Medium Term
Long Term
Legacy
Implementation of National Integrated Infrastructure Master Plan (NIIMP) will change Nigeria to an illuminated and industrialized country
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Last Words
TuOS – Transmission Use of ServicePPA – Power Purchase AgreementO+M – Operations and Maintenance
Gas Supply/ Transport Tariff