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Egypt’s Power Generation Held Down to 35,000MW Due to Gas Supply Crisis

By Mohammed Jetutu, in Cairo

Egyptian electricity authorities have increased the length of load shedding, as the worsening heatwave crimps the ability to supply natural gas to power plants.

The control centre at the Egyptian Electricity Holding Company (EEHC) informed the electricity distribution companies that load shedding times would increase from two hours per day that have been in frame since the week of June 3, 2024, to three hours per day, beginning from June 23, 2024.

The power cuts run anytime between 2 p.m. and 8 p.m., “or until other instructions are received”, the EEHC declared in a press release.

Egypt is one of Africa’s largest electricity generating jurisdictions. The constraint with power generation limits the country to 35,000MW, the influential news outlet, Masrawy reported over the last weekend.

The heatwave increases demand for power on the one hand and also “affects the quantities of natural gas pumped necessary to operate the power stations”, Masrawy  noted.

Added to this challenge is the decreasing production of natural gas in the country’s hydrocarbon reservoirs.

Gas output has declined by 28% to 5.2Billion standard cubic feet per day as of mid April 2024, compared with the highest output on record: the 7.19Bscf/d attained in September 2021.

The Egyptian government has also been cutting gas supplies to fertilizer companies in rder to feed power plants.

 

 


Morocco Launches Pre-Qual Bid Process for 400MW Wind Power Projects

Moroccan Agency for Sustainable Energy (MASEN), has launched the pre-qualification process for the selection of a private company to support the implementation of a two-part, 400 MW Nassim Nord wind power programme.

The proposal involves the construction of two wind farms.

Developers interested in building the two wind farms have until June 24, 2024 to apply.

Named Nassim Dar Chaoui, the larger wind farm (planned to be a 250MW capacity) will be located between the provinces of Tangier and Tetouan, in the north of the country. The second is a 150MW project, which will extend the existing Nassim Koudia Al Baida wind farm, already injecting 100 MW of clean electricity into Morocco’s national grid.

The company selected at the end of the tender process will be responsible for the development, financing, construction and operation of the two wind farms. “By structuring it as a project financing scheme, this new programme will encourage greater involvement of the private sector in the deployment of renewable energies, with the participation of Moroccan and international commercial banks in its financing”, says MASEN.


Azura is a Shiny Outlier, Transcorp is Noisy

…And Hydro plants Perform Better …

Out of Nigeria’s 10 largest electricity producing plants, the exemplary outlier is Azura, which generated 424MW, or 92% of its installed capacity in February 2024.

The closest performers are the hydropower plants: Kainji delivered 438MW or 58% of its installed 760MW; Jebba output 306MW or 54% of its installed 570MW and Shiroro produced 305MW or 51% of its installed 600MW.

In terms of percentage, Agip’s Okpai plant counts among the first five but the 52% of installed capacity, which it produced, was a mere 251MW. These are all February 2024 performances, published by the Nigerian Electricity Regulatory Commission.

The report is evidence that the generation part of the Nigerian Electricity Supply chain is an astonishingly underperformer.

Total actual output, of…

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South Africa Passes a Historic Electricity Regulation Amendment Act

South Africa’s National Assembly has passed the Electricity Regulation Amendment Bill into an Act of parliament.

The legislation is considered by many experts as the most significant reform of the country’s electricity supply industry since 1923 when Escom was established.

“It will have profound impacts for the sustainability of the power system”, says Anton Eberhard, a Professor Emeritus and Senior Scholar at UCT where he leads the advisory board at the Power Futures Lab at the Gordon School of Business.

“Eskom’s conflict of interest as a generator, off-taker of private power, and monopoly owner and operator of the national grid, will be removed by unbundling the transmission system, guaranteeing fair and transparent access for competing power generators”, Eberhard says.

The unbundled transmission company will have four distinct functions – transmission ownership and operation, system operation (balancing of supply and demand), market operation (trading) and a central purchasing agency that will house legacy and vesting contracts.

Some of those who follow the trend of Africa’s electricity supply industry (ESI) will wonder why there should be any applause for the surrender of public sector monopoly to private competition. Afterall, 19 years after Nigeria passed its electricity reform law and 11 years after a massive sale of generating and distribution companies to the private sector, the country’s ESI hasn’t fared better. Neither generation nor distribution has improved and transmission consistently fails.

Yet, over 3,000 kilometres northwards, Algeria and Egypt, whose ESIs are still firmly state controlled, deliver better access to electricity to their citizens. Algeria has 100% universal access. Egypt has over 98%.

Mr. Eberhard, a fierce promoter of free market for electricity in SA, remarks that the Electricity Regulation Amendment Act is coming to fruition, “26 years after the Energy Policy White Paper recommended breaking up Eskom’s monopoly and five years after President Cyril Ramaphosa’s Eskom Sustainability Task Team recommended the unbundling of Transmission”.

The unbundled company initially will be a subsidiary company of Eskom Holdings, known as the National Transmission Company of South Africa.

Within five years this will be converted into a completely separate state-owned company, the Transmission System Operator SOC Ltd.

 

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Even With a Large, Brand New, Hydropower Project, Nigerians Will Suffer Outages

By Lukman Abolade, Senior Correspondent

Challenges around transmission and distribution of electricity will hobble the efficacy of Nigeria’s newly commissioned Zungeru Hydroelectric Power Plant, the country’s fifth largest generating facility, going by installed capacity.

The government constructed, commissioned and concessioned the $1.3Billion plant to Penstock Limited, on February 20, 2024. Penstock Ltd is a subsidiary of Mainstream Energy Solutions Limited (MESL), which has been the operator of the Kainji and Jebba hydro power plants since 2013.

“This is significant generating capacity”, Adebayo Adelabu, Minister of Power, told delegates at the Nigeria International Energy Summit (NIES) on March 1, 2024. He was optimistic about “other forthcoming minor projects, including several small hydro power facilities that will increase in Nigeria’s power generation capacity”.

“Even the President is Owing Electricity BillsIn the third week of February 2024, the Abuja Electricity Distribution Company (AEDC) published a notice of disconnection where it listed Ministries, Departments and Agencies (MDAs) that have failed to settle their electricity bills including the Presidential Villa, among others. Other MDAs listed are the chief of defence Staff-Barracks and Military formations with N12Billion debt as well as the Federal Capital Territory (FCT) with N7.5Billion debt. The Ministry of Finance, the DisCo said, owes N 5.4Billion, Niger state governor (Abuja liaison office) owes N3.4Billion, and N1.58Billion is payable by the CBN governor”.

Adelabu also referenced the 14 proposed, solar energy IPPs that were awarded licenses for grid-tied solar PV, some of which are planned to peak at 100MW. None has reached financial close and yet to commence construction. “We will revisit them”, he assured.

On paper, the 700-megawatt (MW) Zungeru hydropower plant is estimated to generate about 2.64Billion kilowatt-hours (kWh) of electricity a year, amounting to 10% of Nigeria’s total domestic energy needs.

Zungeru lines up after Egbin (1,320MW), Sapele (1,020MW), Ughelli (900MW), Kainji (800MW) in terms of nameplate capacity, but none of these plants delivers, to the consumer, their capacity limits, for reasons often outside their control.

The minister himself lamented, in the speech he read after an address by President Tinubu’s Special Adviser on Energy, the failings of the transmission lines which he admitted was populated with old, dilapidated infrastructure. “I have gone around visiting power facilities around the country”; he told the delegates. “I found lines which bear the label ECN”, he disclosed. “ECN is Electricity Company of Nigeria!” Adelabu exclaimed. “That’s 1960s!”.

One of the two towers destroyed in the most recent attack. Image Source: TCN

And there is the matter of vandalism of transmission towers. In February 2024 alone, two transmission towers were destroyed in the north of the country with explosive devices planted by Islamic insurgents. They included a 132kV Single Circuit transmission line along the Jos-Bauchi Road and a 330kV transmission line along the Gombe–Damaturu Road. This is the catchment area for the Zungeru generation plant.

Even before Zungeru, Nigeria’s total name plate electricity generation capacity has often been widely reported to be in excess of 13,000MW and the transmission nameplate capacity has been cited as being over 7,000 MW, but the transmission inefficiencies hamper the grid from wheeling more than 5,000MW, while distribution companies, the last mile deliverers of power, are only able to funnel about 4000MW to consumers.

The country’s gas supply challenges also continue to impair electricity generation, which is the upstream segment of the electricity supply chain.

In the event, around 86Million people lack access to electricity in Nigeria, while an estimated 40% of all the electricity consumed in Nigeria in 2023 was produced from backup generators making the country with the largest number of people without access to electricity, followed by fellow African countries, Democratic Republic of Congo and Ethiopia.

Despite the government’s efforts to privatise and modernise the power sector, challenges such as corruption, mismanagement, and lack of investment persist. These issues undermine the effectiveness of initiatives like the Zungeru project in alleviating Nigeria’s electricity woes.

While the inauguration of the Zungeru plant represents a significant milestone, it is imperative for the Nigerian government and relevant stakeholders to address the systemic challenges plaguing the power sector comprehensively. This includes investment in infrastructure, policy reforms, tackling corruption, and fostering a conducive environment for private sector participation.

Poor management has also been a major impediment to Nigeria’s electricity access. In the third week of February 2024, the Abuja Electricity Distribution Company (AEDC) published a notice of disconnection where it listed Ministries, Departments and Agencies (MDAs) that have failed to settle their electricity bills including the Presidential Villa, among others.

Other MDAs listed are the chief of defence Staff-Barracks and Military formations with N12Billion debt as well as the Federal Capital Territory (FCT) with N7.5Billion debt.

The Ministry of Finance, the DisCo said, owes N 5.4Billion, Niger state governor (Abuja liaison office) owes N3.4Billion, and N1.58Billion is payable by the CBN governor.

Earlier in January 2024, the Transmission Company of Nigeria (TCN) had also issued a 14-day suspension notice to Ajaokuta Steel Company Limited (ASCL) over N33.71Billion in electricity debt.

The mounting debt is hindering investment and proper development of infrastructure in the sector by distribution companies. The country’s outstanding debt stands at N1.3Trillion to electricity generating companies and $1.3Billion to gas companies, according to Mr. Adelabu,

Addressing the issue of subsidies, Minister Adelabu emphasized the need to transition towards a cost-effective tariff model. He pointed out that neighbouring countries such as Ghana, Togo, and Benin Republic pay significantly higher prices for electricity compared to Nigeria. Given the financial strain, the government may no longer be able to sustain subsidy funding.

In the proposed 2024 budget, a provision of N450Billion has been allocated for subsidies. However, Adelabu highlighted that this amount falls far short of the N2.9Trillion required to sustain subsidies at the current electricity prices. He urged a realistic assessment of the nation’s ability to afford such subsidies, considering the substantial financial implications involved.

Until Nigeria resolves its policy inadequacies, projects like the Zungeru hydropower plant will continue to be overshadowed by the lingering challenges.

 


Nigeria’s Power Minister Announces $2.2Billion PV Solar agreement deal with US Firm 

By Fasilat Oluwuyi

Nigeria’s Minister of Power, Adebayo Adelabu, has announced a collaborative deal with Sun Africa LLC, a l US-based renewable energy solutions provider.

Adelabu made the announcement via his X handle (formerly twitter) on November 19, 2023.

He said Sun Africa has committed to delivering 961 MWp of solar PV generation infrastructure and 455 MWh of battery energy storage systems, totalling $2.2Billion.

The Minister said the collaborative effort will advance sustainable and reliable energy solutions for the nation adding that it will also address Nigeria’s increasing power demand.

There were no details of execution of the deal; where the projects will be sited, whether it will be in form of min-grids in rural areas of scaled-up projects connected urban infrastructure, and whether it will involve subnational governments.

Nigeria has one of the lowest renewable energy deployments on the planet. There is no single functioning solar or wind power generating project with capacity higher than 10MW.

Adelabu wrote: ‘‘I met with representatives from Sun Africa LLC, a leading US-based renewable energy solutions provider. Together, we solidified a collaboration to enhance Nigeria’s power landscape. As the Honorable Minister of Power, I am excited about the positive impact our nation, aligning with my power sector transformation roadmap of Distributed Power leveraging on Renewable Energy. Sun Africa has committed to delivering 961 MWp of solar PV generation infrastructure and 455 MWh of battery energy storage systems, totaling $2.2Billion.

“This addresses Nigeria’s increasing power demand, supporting economic and energy sustainability objectives. This collaboration is a crucial step in transitioning to a more sustainable power mix, vital for economic growth and environmental responsibility.

“Grateful for Sun Africa’s partnership, I anticipate embarking on a journey to provide cutting-edge renewable power infrastructure to our citizens. Their dedication mirrors our vision for a resilient and energy-abundant Nigeria.”

 

 

 


Fuel for Thought: Liquefied Petroleum Gas

PARTNER CONTENT

By: Gorgui Ndoye

The past several years have shown that a range of fuel options for power generation is an important hedge against instability. Fuel flexibility is a hallmark of Capstone microturbines, which can run off a variety of sources, from natural gas and propane to methane, hydrogen, and more.

Today we’re spotlighting liquefied petroleum gas (LPG), a widely available fuel that is an excellent alternative to diesel and other expensive, “dirty” fuels. This primer explains the types of commercially available LPG and how they can integrate into Capstone microturbine systems.

What is LPG?

Using LPG in Microturbines

LPG is a mixture of propane (C3), butane (C4), and small quantities of various other hydrocarbons, such as propylene and butylene.

LPG is transferred and stored as a pressurized liquid; however, its boiling point is such that it evaporates easily under ambient temperature and pressure. The molecular composition of LPG determines the dew point, heating value, density, and many other properties, as well as the percentage of contaminants. These values determine whether a fuel can be used in an engine or turbine. For this reason, it is important to know the composition of the LPG before designing the fuel delivery system. Because the LPG composition can vary significantly between fuel types, Capstone enhanced the fuel capabilities of the C200 and C1000 series microturbines to use a variety of LPG.

The four most common commercially available types of LPG are Special Duty Propane (HD-5), Commercial Propane (HD-10), Propane-Butane Mixtures (PB Mix), and Commercial Butane. LPG can also be mixed with conditioned air to make an LPG/Air Mixture. The addition of air may alter the overall fuel properties to a more desirable level for operation. Capstone’s microturbines can run using HD-5, PB Mix, or LPG/Air Mixtures.

When comparing LPG to Natural Gas (NG), it’s important to note the heating value difference. NG has an average heating value of 1,000 Btu/scf. SD-5 is roughly 2,500 Btu/scf, and Commercial Butane is over 3,000 Btu/scf. Therefore, the heating value of LPG is 2.5 to 3 times greater than NG. So, LPG requires much lower volumetric flow rate to achieve the same engine output. LPG is also stored as a liquid, which compresses the fuel volume 250:1—without costly cryogenics required by LNG. These factors offer a small footprint for LPG compared to NG’s need for pipelines and large infrastructure, and LPG can be transported easily and stored in tanks, making it a good diesel replacement.

Using LPG in Microturbines

  1. Special Duty Propane

Special Duty, or HD-5, Propane is defined as greater than 90% propane and less than 5% propylene. This grade is ideal for all types of engines and turbines due to the burn’s cleanliness and the low level of contaminants relative to diesel.

All Capstone microturbines have a version that can operate using HD-5 Propane.

  1. Propane-Butane Mixtures.

Twenty-three Capstone C65 microturbines provide prime power to Southern California Edison’s Avalon site on Catalina Island

Propane-Butane Mixtures,  or PB Mix, have no standard specification for their compositions and can be a problem for gaseous fuel operation due to the low dew point of butane. The higher the concentration of butane, the lower the dew point falls, and the more heat tracing and insulation needed with the fuel delivery system. This causes a higher risk of fuel condensation, which may lead to engine problems. The LPG-capable C200 and C1000 series microturbines were designed with a versatile fuel system. This includes internal heat tracing and fuel line insulation, which reduce the risk of condensing vapor from heavier fuels. The goal of the heat tracing and insulation is to maintain the supplied inlet fuel temperature without needing to increase the fuel temperature or vaporize condensed liquids.

The LPG-capable C200 and C1000 microturbines are approved to operate using a Propane-Butane Mixture of up to 40% butane. This does not mean that PB Mixtures containing greater than 40% butane are disqualified. Capstone applies the same limitations towards propylene, limited to less than 5%, as well as all other contaminants listed in the Special Duty Propane specification.

  1. LPG/Air Mixtures

Certain LPG types that are not suitable for microturbines may be approved when mixed with air. Alternatively, the mixture may attempt to match the properties of a more standard fuel, such as NG. LPG/Air mixtures are not standard and may require complex fuel delivery systems. The approval of these fuel types depends on review of the fuel properties and composition. Detailed analysis would be needed to determine feasibility for use in microturbines.

  1. Real-World Application

In March 2023, a 600 kW, C600S, LPG-fueled system was commissioned at a remote food processing facility in Bamako, Mali. Like many land-locked countries, Mali relies on expensive, “dirty” fuels like diesel and heavy fuel oil, so this project was important in demonstrating the benefits of a system whose fuel is less expensive and more environmental.

The new system also improves reliability, which addresses issues of load shedding and blackouts the facility had previously experienced. Because the microturbines also require very little maintenance compared to other technologies like diesel generators, power availability and cost savings were also improved.

Twenty-three Capstone C65 microturbines provide prime power to Southern California Edison’s Avalon site on Catalina Island

“The Mali project is a model for other customers and power companies, showing the benefits of LPG as an alternative fuel,” said Gorgui Ndoye, business development director for Capstone Green Energy. “There is tremendous opportunity to use LPG in many regions around the globe, but it can play an especially important role in Africa as part of the continent’s energy transition.”

Better for Business and the Environment.

It’s difficult to underestimate the positive impact that added reliability and cost savings have on the bottom line. Often, the combination of LPG and microturbines offers significant upside—including cleaner fuel and lower emissions. What’s more, once a customer decides to go with Capstone, we can fast-track and deploy nearly anywhere within three months of order.

The world’s energy landscape won’t become more predictable. Smart power security decisions made today will set businesses up to confidently navigate the future. An LPG-fueled microturbine system could be the answer.

Contact:

rentals@CGRNenergy.com


Renewable Energy Wheeled for the first time through Cape Town’s Grid

The first electrons of renewable energy have officially been wheeled via the City of Cape Town’s energy grid, as part of the city’s plans to end power outages, which plagues South Africa.

Growthpoint Properties (JSE: GRT) became the first party to wheel renewable electricity in the city in collaboration with licenced electricity trader Etana Energy (Pty) Limited (Etana), a joint venture in which the South African owned Neura Group and H1 Holdings hold 49% and 26% respectively and UK based Chariot holds a 25% interest.

Wheeling is a process where electricity is bought and sold between private parties, using the existing grid to transport power from where it is generated to end-users that can be long distances apart.

“It creates greater access to affordable renewable energy and contributes to resolving the country’s energy crisis”, UK based Chariot says in a statement.

“As part of the City’s wheeling pilot project, in which Etana was selected as a participating trader, solar energy generated at Growthpoint’s The Constantia Village shopping centre in Constantia is being exported into Cape Town’s electricity grid for use at Growthpoint’s 36 Hans Strijdom office building in the Foreshore”.

Solar power from The Constantia Village was successfully injected into the City’s energy grid for the first time in September 2023.

Etana Energy says it is pleased that the city selected it as a trading partner, and we look forward to providing further energy support to the region for the foreseeable future.

“This electricity licence not only enables us to instigate this trading, but it also has the potential to help to unlock the development of further large renewable projects in South Africa. We are looking to supply greener power across the national grid for commercial and industrial requirements so this early-stage trading is a key step within our longer term plans for this business.”


Why Less Looks Like More: A Performance Review of Nigeria’s Power Generation Capacity

By Adeniyi Adeoloye

The Nigeria power sector is encumbered right through the entire value chain.

The figures for installed generation capacity, the grid transmission, and what the distribution companies can deliver to the end users, are common knowledge. But there’s a vast gulf between the capacity and the delivery and the specific details of this gap is absent from the conversation.

Many have dismissed the transmission segment as the weak link in the power industry value chain. The call has led to pleas for government to let go of operating it in order to drive efficiency and deliver optimum value. There has been a scathing searchlight on the distribution and transmission links of the sector. But then, the generation segment is as broken.

Nigeria, like many countries, organises its energy mix around energy sources that are abundant within its borders. Hydro power and gas fired plants dominate the energy mix in Africa’s most populous country. Save for the emissions during their construction and location outside demand centres, hydro is largely seen as a clean means of power generation. On the other hand, gas has been given green credentials by the European Union due to its less polluting nature than coal and since labelled a transition fuel. So by and large, the grid emission factor of the power generation systems in Nigeria based on energy source are in relatively good stead.

What are the numbers like? By the tally, there are 23 power generating plants connected to the grid in Nigeria with installed capacity of 10,396 MW and available capacity of 6,056 MW. Of this, gas fired plants account for 8,457.6 MW with available capacity of 4,966 MW while the remainder is hydropower with installed capacity of 1,938.4 MW and available capacity of 1,060 MW. The large chunk of the country’s generation is gas fired.  The ownership of these plants cuts across government and the private sector. Nigerian Bulk Electricity Plc (NBET) undertakes Power Purchasing Agreement (PPA), with the generating companies and sells the energy purchased to the distribution companies via Vesting Contracts. A total of 16 generation companies have PPA with NBET.

Performance of Government Run Power Plants

Government hatched the National Integrated Power Project (NIPP) in 2004 in a bid to stabilize electricity supply in anticipation of the takeoff of the private sector led structure of the Electric Power Sector Reform Act (EPSRA) of 2005. The primary idea of NIPP was to build 7 medium sized gas fired power plants in gas producing states alongside crucial transmission infrastructure required to move the added power to the national grid. The Niger Delta Power Holding Company Limited (NDPHC) was set up to house and manage the NIPP assets with market oriented practice. Available information by NDPHC indicates it owns 10 thermal plants – Calabar (563 MW), Omotosho (500 MW), Sapele (450 MW), Egbema (338 MW), Omoku (225 MW), Alaoji (960 MW), Ihovbor (450 MW), Gbarain (225 MW), Gerugu (434 MW) and Olorunsogo (675 MW). Of this ten, eight of them except Egbema and Omoku have “interim agreement” with government owned Nigerian Bulk Electricity Trading Plc (NBET) that buys power from Independent Power Producers (IPP) and successor generation companies from the unbundling of Power Holding Company of Nigeria (PHCN) and resale to Distribution Companies who deliver to end users and other large consumers who take electricity directly from the grid.

The eight plants having interim agreements with NBET have total contract capacity of 4,257 MW and tested capacity of 1762 MW with average generation capacity of 488.15 MW as at year 2021 according to data by NBET. The data further shows average generation of these plants is a paltry 11% of net contract capacity, and about 27% of tested capacity. Plants with installed contract capacity of 500 and above didn’t perform any better. Alaoji with net contract capacity of 960 MW and tested capacity of 212.33 MW averaged an output of 58. 19 MW.  Olorunsogo (675 MW, 212.67 MW and 23.07 MW), Calabar (563 MW, 339.55, 236.02) and Omotoso (500 MW, 219.61 MW and 43.24 MW) for net contract capacity, tested capacity and average generation capacity respectively. The Ihovbor Plant with contract capacity of 450 MW and tested capacity of 202.34 MW last done in 2021 had average generation capacity of 16.87 MW in year 2021. This is an abysmal low of capacity utilisation. Across board, NDPHC managed plants are poorly performing.

And talking about testing, the data also established year 2015 as the last test date for all NDPHC plants with the exception of Alaoji plant whose capacity test was carried out in June 2021. The lag in test capacity is against what is stated in a March 2022 draft power purchase agreement for brownfield power plants by NBET which states “the Tested Capacity of the Plant shall be verified at least annually by further Capacity Tests that will establish the revised Tested Capacity”. Usually there are diverse reasons to appraise the performance of a plant other than meeting contract guarantees. Performance tests for a brownfield power plant can be done to verify its capacity and heat rate before an acquisition in order to determine its asset worth. Testing is also useful for the goal of maintaining a Power Purchase Agreement, tariff up-gradation as well as to ascertain the performance differences brought by major repairs or component upgrades.

Review of Successor Gencos

Successor Gencos are power generation companies created in the aftermath of the unbundling of PHCN. There are eight of these plants around the country namely: Kainji (760 MW), Jebba (576 MW), Shiroro (600 MW), Egbin (1100 MW), Sapele (1020 MW), Delta (900 MW), Afam IV-V (776 MW) and Gerugu (414MW). Tese are nameplate capacities. With the exception of Kainji, Jebba and Shiroro that are hydro power, the rest are gas fired. Many of the plants have been fully or partially sold, and others under long term concession. All of the plants have Power Purchase Agreement with NBET with total contract capacity of 6,146 MW, last tested capacity of 2,853.72 MW and average generation capacity of 2,010.4 MW in year 2021. The average generation capacity of these plants is 32% of contract capacity and 70% of tested capacity. On a plant by plant basis, the Sapele plant is an overwhelming underperformer given its contract capacity of 1020 MW and test and 2021 average generation capacity of 52.29 MW and 46.39 MW, being last tested in June 2021. This translates to a miserly 4.5% average generation capacity to contract capacity. Afam IV-V didn’t fare any better with contract capacity of 776 MW and test and average generation capacity of 121.9 MW and 66.75 MW respectively and last tested in July of 2021. For context, the output from Afam IV-V is a beggarly 8.6% of its contract capacity.

Test dates for the plants was between June and August 2021. Over two years ago. Still far behind the annual recommendation of NBET. The performance of plants in this category outmatch those of the NIPP plants managed by NDPHC despite the sub par productivity of Sapele, Kainji, and Afam IV-V respectively.

A look at Plants in other Categories

There are five plants that are classified by NBET as having active PPA namely: Okpai operated by Agip, Afam VI run by Shell, Omotosho Electric, Olorunsogo and Azura Edo IPP. All of these plants are gas fired with total contract capacity of 2,188 MW, tested capacity of 1,815.61 MW and average 2021 generation capacity of 1,338.68 MW. The average generation capacity of these plants with respect to tested capacity is 71% and 61% with respect to contract capacity – an indication of better performance. Of plants in this category, Azura Edo IPP with contract capacity of 450 MW and test capacity of 452.6 MW and average generation capacity in 2021 at 420.84 outperforms it peers. In context, average generation capacity with respect to test capacity and contract capacity stands at 92% respectively with last capacity test carried out in June 2022. Shell run Afam VI has contract capacity of 650 MW, tested capacity of 464.96 and average generation capacity of 261.04 MW in 2021 with last test date of July 2021.   In performance terms, the average generation capacity with respect to contract capacity and tested capacity stands at 40% and 71% respectively. For Agip run Okpai with contract capacity of 480 MW, it tested capacity is 464.96 MW with average generation at 261.04 MW. Last tested in July 2021. This translate to 56% and 54% of average generation capacity with respect to tested capacity and contract capacity respectively. Without doubt, Azura leads the pack in terms of production efficiency.

State Government owned plants Ibom Power, Mabon, Omoku FIPL, Trans Amadi FIPL, AFAM (Rivers IPP) FIPL, and Eleme have combined contract capacity of 870 MW, with tested capacity of 451.88 and average generation of 185.09. The average generation capacity of Ibom power of 12.53 MW compared to test and contract capacity of 112.83 MW and 190 MW respectively, translating to 11% of average generation to test capacity is an indication of operation plunging into an abysmal depth. The Mabon and Eleme are new plants in the inventory of NBET with their capacity test yet to be carried out.

The foregoing is the state of things with the plants based on data from NBET. Cash liquidity constraint is a major issue given collection inefficiency by distribution companies. This has a ripple effect on the sector, leading to inability of operators to pay gas producers. Additionally, the insufficiency of the transmission company to transmit contracted or test generation capacity due to infrastructural gap and vandalism has left the country with more than 20 plants with test capacity of 6,884.76 MW out of contract capacity of 13,461 MW and an average generation of 4,022 MW in 2021 to back up power from the grid with gasoline or diesel generators. The factors causing this inefficient operations has to be reigned in rather than pushing the much needed reform to turn things around into the long grass as done by successive governments. Economic growth, its attendant job creation and prosperity will continue to be an illusion with this sort of underwhelming productivity of the power generating plants.

“Key Parts of a Power Purchase Agreement” According to NBET

Tariff Structure – Provides the details of how NBET will pay for the duration the PPA is calculated.

Risk Allocation – Identifies all project related risks and allocates these risks to parties best able to bear them.

Conditions Precedent – Provides all the conditions precedents (CPs) which either the Buyer (NBET) or Seller (Owner of plant) must satisfy before the PPA can become effective.

Tenor of PPA – A standard NBET PPA has a 20 year tenor. There are clauses within the PPA to handle early termination due to either a Buyer’s or Seller’s default.

Project Documents – All documents that are connected to the PPA such as Engineering, Procurement and Construction, Gas Supply Agreement (GSA), Gas Transport Agreement (GTA), Operations and Maintenance, Long Term Service Agreement, Financing documents e.t.c.

Commissioning & Testing Procedure – Contains a set of guidelines for plant testing and commissioning.

Operation & Maintenance – Contains details of the maintenance and operational obligations of the Seller throughout the tenor of the PPA.

Conflict Resolution – Indicates clear procedures for conflict resolution in case of disputes and/or conflicts on invoices.

Metering – Sets out the rules about metering. However, in case of conflicts between PPA provisions and the metering code, the metering code supersedes.

Liability & Indemnification – Enumerates the parties responsible for certain failures and provides indemnification to both parties.

Insurance – States the required insurance coverage to be put in place by the Seller and how the proceeds will be administered.

Scheduling Notices – Provides a methodology by which the Buyer nominates for the dispatch of Net Electrical Output to be made available at the delivery point by the seller.

Force Majeure – Provides details of events to be considered as force majeure and possible payments during the occurrence of such events.

Adeniyi Adeoloye is a consulting Editorial associate at the Africa Oil+Gas Report.

 

 

 

 

 


Senegalese Power Plant Opts for Wärtsilä Long-term Service Agreement

Technology group Wärtsilä has signed a long-term service agreement for two years with ContourGlobal, an energy provider based in the United States.

The agreement covers the company’s Cap des Biches power plant in Dakar, Senegal.

The plant dispatches power to the national electricity distributor Senelec, and reliability of supply is essential. The Wärtsilä agreement is designed to ensure that the customer’s commercial and contractual terms and conditions are met. The order was booked by Wärtsilä in March 2023.

The plant delivers an output of 86 MW. The scope of the agreement includes all spare parts for major overhauls of the engines, optional field service personnel to carry out maintenance tasks, along with a guarantee limiting the downtime during scheduled maintenance procedures.

“We have worked closely with Wärtsilä on projects in different countries, and appreciate the professional and highly qualified support that they are able to deliver. This agreement provides us with important guarantees that will allow us to supply electricity to the grid in line with our commitments. Furthermore, it provides predictability of costs, while freeing our people to focus on their core business,” said ContourGlobal’s CEO for Africa, Ara Hovsepyan.

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