CWC

Little Spark on Nigeria’s 10th Anniversary of Power Reform

By Toyin Akinosho

  • Publicly generated power supply remains flat at around 2005 figure.
  • Only one of the six NIPPs for which G.E received contracts in 2005, has gone on-stream

It’s the last day in March, the very month, in 2005, when the Nigerian president finally signed the country’s Electricity Reform Bill into an act of the National Assembly.
Institutions have been created to implement and govern the implementation of reforms, which are meant to move the electricity supply industry from administration by a government monopoly to the control of the private sector.

11 power plants have been built. Distribution companies and generating facilities have been sold to private firms.
But there has been no net effective increase in generated power in the years between the reform legislation came into being and the onset of Transitional Electricity Market in February 2015.

In 2005, 4,000MW was a magic figure. In 2015, it is still a magic figure.
With new generation plants running at Olorunsogo, Omotoso (in the Southwest of Nigeria) and Ihovbor in the country’s Midwest and ENI (Agip)’s Okpai and Shell’s Afam plants all commissioned after 2005, its clear that what the defunct monopoly PHCN was producing 10 years ago had dropped sharply. “As new generation came online, old generation went offline”, jokes Sam Ajibua, a Cairo based energy analyst focused on Africa.
Misalignment between gas field development projects, pipeline construction and completion of thermal Power Plants in Nigeria has hampered increase in power available to Nigeria’s National Grid, which is itself too weak to wheel any volume of power above 5,500MW.

Weeks after the country’s power reform act was signed, in March 2005, the Nigerian government awarded contracts to Shandong Power Construction(SEPCO) to build a 335MW power plant in Papalanto/Olorunsogo in Ogun State, and to the Chinese Machinery and Equipment Import and Export Company (CEEMCO) to build a 335MW plant in Omotosho in Ondo State, both in the west of the country. A Nigerian contractor Rockson Engineering, was awarded a contract to build a 378MW plant in Alaoji in River State in eastern Nigeria.

Later in the year, the government awarded $414Million worth of contracts for the supply of turbines and electricity generation equipment to General Electric(GE), with a six year long (post installation) service agreement estimated at $118Million. The turbines were to be sited in Omoku in Rivers State(230MW). Gbaran/Ubie (Bayelsa State, 250MW)), Ikot Abasi (Akwa Ibom, 230MW), Sapele(Delta State, 500MW), Eyaen a.k.a Ihovbor(Edo State, 500MW),) Egbema(Imo, 250MW) and Calabar (Cross River, 250MW). The PHCN itself published these figures of “seven new Federal Government Projects in Niger Delta” in a flyer produced in late 2005. The Ikot Abasi plant was later dropped from the list.

So far, only one of these six power plants had started generating electricity as of March 30, 2015.  The Olorunsogo and Omotosho plants are supplying power, but at less than 60% of their capacity.
Some of the planned capacity has been escalated. Alaoji is now assigned a nameplate capacity of 1,074MW. Calabar’s planned nameplate capacity is now 561MW. Egbema’s would be capacity is now 338MW. Gbarain and Omoku are to produce 225MW each, not really different from the original capacity assigned to them. The Ihovbor (formerly Eyaen) plant has capacity for 450MW available, although, originally, it was meant to produce 500MW.

There’s a Geregu Plant (a second phase, an add on to the one built in early 2000s), which is planned to generate 434MW.
Although all these power plants have now been sold to private sector players, they are mostly idle because of lack of gas supply.
But the power supply issues are not just about lack of sources of gas. They are also about project management. Most of these plants have taken all of 10 years to be completed, to start with. And many projects for gas evacuation and delivery from fields to these plants have dragged.

These plants could easily have provided the shortfall in power supply created by the vanadalism of the Trans Forcados Pipeline earlier in the year, which affected generation from Omotosho, Olorunsogo, Ihovbor and  Egbin thermal plants. The state hydrocarbon company says that Nigeria demands 3.5Bcf/d of gas, of which the NIPP plants alone demand 1.3Bcf/d. It’s hard to see where all of that gas would come from.

The looping of the country’s main gas transmission line, the Escravos-Lagos Pipeline, to double its capacity to 2Bscf/d, has gone on for over three years. Still, as of December 30, 2014, the “steady state” flow of the line was 600MMscf/d, in part through inadequate gas supply to it and in part through continuous damage by sabotage. This is the line that through which gas is supplied to Egbin Thermal plant (1, 320MW capacity), as well as Sapele, Ugheli, Olorunsogo and Omotosho plants. It is also the evacuation route to the West Africa Gas Pipeline.

 

A full length feature/analysis of 10 years of Nigeria’s electricity reform is published in the POWER DEFICIT edition (April 2015 issue) of the Africa Oil+Gas Report, out on April 25, 2015. Subscribe here.

 



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