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Agriculture

From Rediscover Nigeria desk

  AGRICULTURE   The wealth of a nation is partially measured by its ability to guarantee its citizenry food security.In…

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Manufacturing

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Manufacturing in Nigeria concentrates mainly on the production of consumer goods. With a population estimated today at over 156 million…

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Nigeria! Overview

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Tourism in Nigeria has huge potentials to be a major foreign exchange earner. The Obasanjo administration has created awareness among…

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Nigeria's Resources

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Nigeria's total verified external debts as at December 2010 was US$4.578 billion as against US$3.947 billion in 2009. Total scrutinized…

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Rediscover Nigeria Power

Power

There are eight power plants with a combined installed capacity of over 6,000 MegaWatts (MW) owned by the Federal Government of Nigeria.

Location

Type

Installed Capacity

Kainji

Jebba

Shinroro

Egbin

Sapele

Afam

Ogorode

Ijora

Hydro

Hydro

Hydro

Thermal

Thermal

Thermal

Thermal

Thermal

760 MW

578.4 MW

600 MW

1,320 MW

1,020 MW

969.6 MW

912 MW

40 MW

STATE OF THE POWER PLANTS

At the time of transition to democracy in 1999, the combined output of the power plants was a meagre 1,600 MW of electricity. Through a series of rehabilitation exercises and strengthening of the transmission grid, available capacity now oscillates between 3,000 and 4,000 MW. This is still a far cry from the nation's consumption capacity of 12,000 MW. The huge energy deficit creates constant outages leaving businesses to generate about 60% of their energy requirements through alternative power sources. The Power Sector Reform Act is being implemented. It has unbundled the generation and distribution of Electricity.

PRIVATE SECTOR INITIATIVES

Private Sector participation dates back to 1952 when private tin miners built a power station near Jos. The Nigeria Electricity Supply Company (NESCO) followed with a 4 MW plant which is still functional to date. NESCO currently generates, transmits and distributes 40 MW of electricity thus confirming the viability and sustainability of private sector participation. There is no doubt that the endeavour to bridge the energy deficits of the country will substantially depend on reasonable private sector investment. The ability of NESCO to survive till date is a pointer to the profitability of investment in the power sector. This will be enhanced by the de-regulation that has taken place in the sector.

STATE GOVERNMENTS

Of remarkable importance is the initiative of three State Governments- Rivers, Akwa Ibom and Bayelsa State. The Rivers State government built a new thermal station in Port Harcourt while the Bayelsa State government rehabilitated an old thermal power plant to supply the riverine state (which was recently connected to the national grid) with electricity. The Akwa Ibom State government is equally working hard on a 188 MW power plant.

NEW GOVERNMENT POWER PROJECTS

The Federal Government of Nigeria in its effort to address the huge energy deficit as well as meet its target of providing 10,000MW by 2007 has initiated new power projects in the following areas:-

Projects                                     Type                Capacity

Alaoji                                        Thermal            504 MW

Papalanto                                 Thermal          335 MW

Geregu                                     Thermal           414 MW

Omotosho                                Thermal           335 MW

Omoku                                     Thermal           150 MW

Obajana                                   Thermal           350 MW

Ibom Power Project                 Thermal           188 MW

Calabar                                    Thermal           500 MW

Egbeama                                  Thermal           350 MW

Eyaem                                      Thermal           500 MW

Ikolabasi                                  Thermal            300 MW

Sapele                                      Thermal           500 MW

Ubie                                          Thermal           250 MW

Mambila                                     Hydro              2,600 MW

 

With other projects worth $1.3billion which are to strengthen the transmission grid in anticipation of 10,000 MW generating capacity, it is obvious that the power supply situation will significantly improve but may still be short of national requirements as the economy expands. The Mambilla hydro electric project with support from the Chinese government is expected to gulp about US$4 billion . This is a long term project expected to help bridge power needs over time.

POWER SECTOR REFORM

In 2005, the legislation which conferred monopoly of public power supply on the state owned electricity supply company was abolished and replaced with a Power Sector Reform Act. The act now permits private sector participation in all aspects of generation, transmission and distribution of electricity. The National Integrated Power Projects are coming on stream and it is envisaged that by the year 2013 Nigeria will generate 10,000 MW of electricity growing up to 15,000 MW by 2015. Nigeria requires an investment of over US$50 billion between 2011 and the year 2020 in the power sector to stabilize supplies and meet up with the ambition of being one of the 20 top economics by that year. A super grid system with capability of transmitting 726 KV as against the current 330 KV is also in the offing.

Nigeria currently flares about 2.5 billion cubic-feet of gas a day which is enough to provide for its current electricity needs. Prior to now, the target set to end gas flaring has been regularly not been kept. Government has chosen to encourage investors by raising the price of gas from US$0.20 per million metric British thermal unit (BTU) to US$1.00 per million metric British thermal unit (BTU). This is to encourage the oil companies to supply gas to the power generating stations and be sure of recouping cost. There will gradually be upward increments.

Some oil companies like SHELL have commenced pipeline construction that will increase their supply of gas to generating stations by 250 million standard cubic feet. The Nigeria National Petroleum Corporation (NNPC), Pan Ocean Oil, Chevron and other companies have agreed on in increased supply of gas for domestic electricity generation. The 11 regional electricity distribution companies and the six generating stations which government is considering for sale will raise about US$7 billion.

PRIVATE SECTOR PARTICIPATION

The Nigerian Electricity Regulatory Commission (NERC) has licensed new organisations to commence work on private power supply. This has opened the gate for full private sector participation and it is applauded as the first real dividend of the power sector reform act. Among the companies expected to generate electricity are:

ORGANISATION

EXPECTED OUTPUT

LOCATION

*         SUPERTEK NIGERIA LIMITED

1,000 MW

AKWETE, ABIA STATE

*         ETHIOPE ENERGY

2,800 MW

OGORODE, DELTA STATE

*         I.C.S

624 MW

ALAOJI, ABIA STATE

*         FARM ELECTRIC

150 MW

OTA, OGUN STATE

*         DANGOTE

340 MW

OBAJARA, KOGI STATE

*         EWEKORO POWER LIMITED

12.5 MW

EWEKORO, OGUN STATE

*         GEOMETRIC POWER LIMITED

140 MW

ABA, ABIA STATE

RENEWABLE ENRGY

Nigeria is endowed with great potential in renewable energy which can be harnessed to bridge the current energy deficits in the country. Being a largely agrarian nation, waste from farm produce in often burnt away or allowed to rot.

The production of Sorghum is prevalent in many parts of the nation and it is major feed stock for bio-fuels. The stalks of Sorghum is often burnt off or used as animal feed in rural Nigeria.

Cassava is a staple crop which grows in all parts of Nigeria. This is in addition to excellent growth rate of Jathropha which can all be converted to bio-fuels. The commercial cultivation of these crops can lead to a reduction in poverty over a short period while contributing a big boost to energy supply.

Bargasse (a waste of sugarcane) currently powers the Savannah sugar plant in Numan-Adamawa State and it is a captive power plant providing largely the energy needs of the factory.

Opportunities abound for investors to take advantage o the large arable of land in Nigeria to produce the economic crops and use part and their waste for power generation.

OPPORTUNITIES

40% of Nigeria's annual gas production of 5.5billion cubic feet is currently flared. This is an enormous resource that can be channelled partially towards the generation of electricity.

Besides mega plants, multiple units of mini plants of between 10 to 50 MW (using the vast reserves of coal found in different parts of Nigeria), are viable business options. This business approach will be highly cost effective as it can help investors to focus on enclaves and limited areas with high potentials on returns

The backward integration value which the use of coal adds will help to create employment and give a sense of belonging to the communities where the power plants will be located.

 

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