Power generation and supply is one of the key indicators of economic prosperity for a country. It is crucial and unavoidably necessary for both human existence and a nation’s development. It is the aim of Nigeria’s power sector to effectively transmit power to all parts of the country for the efficient distribution to consumers. Therefore, power generation is an indispensable component to drive the realization of these aims.
This article, nevertheless, provides an overview of power generation in the past so as to understand the progressive trend realised in power generation currently. Included in the highlights is a brief summary of the current status of energy resources, opportunities, challenges and present steps taken to address some of the challenges.
Status of energy resources till date
Presently, primary source of energy for the production of electricity in Nigeria for the past 45 years remains as coal, oil, water and gas. Therefore, the types of power plants functioning in Nigeria are the hydro-electric and the thermal/fossil fuel power plants. The two main types of thermal/fossil fuel power plants are naturally gas-fired and coal fired. However, hydroelectric power systems and gas fired systems are the two main power generating systems used presently.
As of October 2017, the total percentage contribution of the three hydro power generation companies (GENCOS) in Nigeria (kainji, Jebba and Shiroro) as put together by the present Minister of Powers, Works and Housing, Babatunde Fashola was 26 percent. This represents a 15 percent increase from the year 2015 and leaves the contribution of the gas power generation at 74 percent. (www.thisdaylive.com)
Background of power generation in the past
Commencement of power generation in Nigeria dates back to 1886. Over the years, there have been increases in electricity infrastructure as well as changes in the operations of the regulating agencies. With the establishment of National Electric Power Authority (NEPA), a merger of the Electricity Corporation of Nigeria (ECN) and Niger Dams Authority (NDA)) by the Federal Government in 1972, efforts in electricity generation initially yielded good results especially from 1970s to mid-1980s. Increasing number of cities, towns and villages were connected to the national grid.
However throughout the 1990s, power generation facilities received no expansion even with the increase in population and structures. By 1999, the installed capacity of 5,906MW reached could hardly supply 1,750MW of electricity to a population of 120 million people. And as at 2000, the generation capability decreased to 1,500MW which represents 25.3 percent of the installed capacity. Total installed generation capacity hovered around 6,200MW from 2 hydro and 4 thermal power plants in 2000.
To address the retrogression experienced in the power sector, NEPA was restructured and renamed Power Holding Company of Nigeria (PHCN) by the Electric Power Sector Reform Bill signed into law in 2005. The reform allowed for private companies to participate in the generation, and distribution of electricity while transmission companies remained under government ownership. In addition to the 6 successor generating companies (GenCos), is the Independent Power Producers (IPP) and the National Integrated Power Project (NIPP) which make up the power generation sector till date.
Nevertheless, efforts were made by the government to repair broken down power stations and to construct new ones. Major improvements yielded as a result but still required harder work to provide power for a population of about 139 million people in the year 2005
As at 2013, the nameplate capacity (or total installed capacity) of the generating plants was 6,953 MW; while available capacity was 4,598MW. The actual average generation lied on 3,800MW. According to the World Bank of collection of development indicators, Nigeria had a total installed capacity of 8,457MW in 2014 with generation from hydroelectric sources reported at 17.59% (% of the total). By early September 2016, maximum peak power generation was reported as 4,285.90MW by the Nigerian Electricity System Operator.
Review on the trend in power generation – 2017 (till November precisely)
The National Bureau of Statistics (NBS) disclosed through a report which indicates that for the three months, i.e. April to June, 2017, 2,503MW to about 4,000MW of electricity was generated by Nigeria’s 25 power plants. As of April 2017, the executive secretary for the Association of Power Generation Companies (APGC), Joy Ogaji, revealed on an interview with News Agency Nigeria (NAN) that generation companies had an installed capacity of 12,500MW while GenCos had available 8,000MW capacity. However, reduction in generation of electricity even with the capacity to produce more was due to paucity of funds to obtain gas to fire power plants.
By August 2017, 6,803MW was reported as the available generating capability, while wheeling capacity increased from 5000MW to 6700MW according to a communique issued at the 18th monthly power sector and stakeholders meeting in Kano, chaired by Babatunde Fashola.
Also, as at November 27, 2017, the Nigerian Electric System Operator reported a peak generation of 4, 713.40 MW. This is a generation of about 37 percent of the total installed capacity.
Opportunities that lie for increased power generation
Increase power generation allows for the expansion of transmission and distribution networks all over the country. In other words, opportunity for transmission companies to raise their wheeling capacity and for distributing companies to increase power supply for consumers should not be a case. There lies opportunity for the following:
- a step forward for the development of industries
- extension of power supply to the rural areas
- attraction of both local and international investors
- moderate relief on congestion and overload of power lines, transformers
- increase pace in development and refurbishing of power projects
- a step forward in the development of the economy
- improvement in network coverage
- improvement of consumer satisfaction
Nigeria’s power generation target
By the year 2020, it is Nigeria’s aim to generate an excess of 40,000MW with an energy mix that constitutes 69% thermal, 17% hydro, 10% coal, and about 4% renewable energy.
The concerns and challenges
- Electricity demand exceeds supply. Presently, Nigeria’s population is over 180 million according to Worldometers. Also, it is the country that attracts more direct foreign investments than any other in Africa. An estimate for developing countries to meet their electricity demand is about 1000MW per million people. That means Nigeria would require about 180,000MW generation of electricity to meet up with her current demands. This is a far margin from the present status of total installed capacity the country possesses.
- Nigeria’s actual power generation is a third of its capacity. Though power generation has improved, maximum peak generation hovers around 4,700MW which is a third of what the country is capable of producing, and below TCN’s wheeling capacity of 6,700MW.
- Constraints in power distribution. Frequent rejection of load by DisCos exposes an underlying challenge in the power distribution sector.
- Constraints in availability of gas. Currently, about 74% of power generation is dependent on gas as the primary energy source. Limited funds to procure gas and gas pipelines vandalism are among the main reasons for insufficient gas.
- Epileptic power supply continues. Many have turned to alternate source of power such as generators. This situation is not helpful for the economy. Records from the Manufacturing Association of Nigeria (MAN) show that Nigerian manufactures spent N66.99 billion on generators and alternative energy resources to power their factories in the second half of 2016 due to poor power supply from DisCos.
Steps taken by the Government on the acceleration of power generation and supply
In effort to accelerate power generation within the country, the Minister of Power, Works and Housing, Babatunde Fashola expressed the need to diversify the current sources of power generation in Nigeria away from dependence on gas. The Minister added that the government was already committed to new energy options and had gone ahead to sign 14 solar Power Purchase Agreements (PPA), with 14 developers having the overall potential to deliver 1,000MW of solar power.
To increase utilization of the total installed capacity of power generation, Nigerian Electricity Regulatory Commission (NERC) has developed a regulation on embedded generation to open access for power generating plants to be directly connected to and to evacuate power through the distribution network. Such generating plants include those running on renewable energy resources.
To meet up its target, the country is in advance stage of procuring six small hydro-dams for operation by the private sector as revealed by the Minister. Also, TCN disclosed that it was able to secure as sum of $406 million from the World Bank for the expansion of transmission projects across Nigeria.
Because the distribution sector remains an essential aspect of enjoying adequate and extended power supply, obviously, there is needed expansion of interest by the Government to include investments that facilitate development in this sector. Such step would go a long way in overcoming some of the present challenges faced by the DisCos, and the problems bordering epileptic power supply.
Therefore, power generation would make stronger impact both in people’s lives and the prosperity of the nation’s economy when there is a consistent and harmonious growth in the three facets making up the Nigeria’s electricity sector (i.e. generation, transmission and distribution). In other words, development, expansion, and investment in all three aspects of the power sector is a progressive step to ensure that power generation is fully utilised in response to the growing demands. This would hasten up the realization of providing adequate power supply across all parts of the country.
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