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‘Why power generation stays below 4,500MW’

By Roseline Okere
16 February 2015   |   6:16 pm
•Electricity output hits 3,746.01MW  •World Bank offers $1 billion to Nigeria, others for gas-to-power scheme THE Minister of Power, Prof. Chinedu Nebo, has said that sabotage of the pipelines by vandals had constrained gas supply to the power plants, making it impossible for the country to attain 4,500 megawatts generation capacity.   Meanwhile, the World…

Chinedu-Nebo

•Electricity output hits 3,746.01MW 

•World Bank offers $1 billion to Nigeria, others for gas-to-power scheme

THE Minister of Power, Prof. Chinedu Nebo, has said that sabotage of the pipelines by vandals had constrained gas supply to the power plants, making it impossible for the country to attain 4,500 megawatts generation capacity.

  Meanwhile, the World Bank has set aside more than $1 billion in risk financing to back the use of flared gas from oil fields in Nigeria, Cameroon and Ghana, to generate power. 

  As at Monday, the generation report of the Presidential Taskforce on Power put the country’s electricity generation at 3,841.05MW, representing an increase from 2,936.85MW it recorded the previous week.

  According to the report, energy sent out increase from 2,869.84MW to 3,746.01MW.

  The minister said that there is no justifiable individual benefit to gas pipeline vandalism other than sabotage of the progress being made in the power sector.

 “Over 200 incidences were recorded on the Trans Niger crude pipeline in the East, affecting Okoloma gas supply. These regular interruptions on the Trans Forcados crude oil pipeline affect gas supply in the West. Sabotage incidents have constrained gas supply to power plants and held generation at less than 4,500MW.”

  He listed the impact of vandalism on the economy to include loss of crude oil and revenue, loss of gas and revenue impacting electricity

Tariff, loss of power and revenue impacting electricity tariff, multiple cost of infrastructure repairs, and no justification for gas facilities vandalism other than sabotage.

  He said that a loss of 200 MMscf/d is equivalent to a Power reduction of the order of 700MW.

  According to him, sabotage incidents have constrained gas supply to Power Plants and held generation at less than 4,500MW. “Inspite of sabotage, there has been some improvements in power supply.

  He said that significant improvement has been made to the gas and power infrastructure. “These improvements represent the critical foundation that has been established by carrying out the Power Sector Reform Agenda. Vandalism is a major threat to that foundation and threatens the sustainability of power supply to Nigerians. Gas infrastructure vandalism and crude oil theft are the cause of significant economic loss to the Nigerian nation as well as the cause of insufficient power supply.  There is no justifiable individual benefit to gas pipeline vandalism other than sabotage to the progress being made in the power sector.  The power sector foundation-building efforts are maturing and more facilities are being completed, any threat to that is a threat to power supply to the millions of Nigerians who desperately need electricity.

  Nebo disclosed that the government is considering a fast way of solving lingering power supply shortage through embedded power. “By this, less emphasis would be on the national grid, while small cluster of end users and industries located in the same area can have power distributed to them from the excess produced in their localities”, he added.

 He said, United Nations Development Programme (UNDP) is considering a type of intervention similar to the carbon credit scheme already developed in some countries, noting that as at now nothing is on ground as a form of incentive to those interested, as it is known in other climes.

  He assured that Government is desirous of encouraging those with excess power that could be used as embedded generation; such could be sold to the grid after clearance with appropriate Government agencies.

Prof. Nebo denounced the unpatriotic acts of pipeline vandals, describing their actions as pure sabotage, “these people seem to be against progress of their country, by the way they operate, it is clear that they are sophisticated and have clear understanding of the terrain, whenever we finish repair works, the vandals will strike immediately afterwards”.

 Nigeria, Africa’s top oil producer and worst flarer of gas found when extracting oil on the continent, received its first partial risk guarantee from the bank of $145 million in 2013 to support the country’s gas-to-power industry.

  Specifically, under the 10-year deal, Chevron Nigeria will supply the gas-fired Egbin plant near Lagos to generate electricity in a bid to increase supply in the populous nation where around three quarters of the country’s power comes from gas.

  The bank’s guarantees cover private lenders against the risk of a power utility failing to honor its financial obligations.

Another two Nigerian projects will bring the total risk financing to $400 million.

“In Nigeria we have a whole pipeline of gas-to-power projects being developed,” George said.

  Flaring around 14.7 billion cubic metres (bcm) of gas annually, Nigeria is ranked second on the global list of worst flaring nations behind Russia, bank officials said.

  Nigeria has signaled its intention to curb flaring – which sends tonnes of the greenhouse gas carbon dioxide into the atmosphere – at its oil fields.

However, policies that outlaw the practice have yet to be passed by parliament.

  Besides Nigeria, the bank was also looking at gas projects in Cameroon, Mauritania and Ghana, she said.

 About two thirds of people do not have electricity in sub-Saharan Africa and the continent is hopeful new gas finds along the east coast can boost power projects.

  Power shortages are a big impediment to economic growth, and many businesses provide their own power using costly diesel generators.

Anita George, senior director of energy at the bank, said about 700 billion kilowatt hours of power – equivalent to 80,000 megawatts running for the whole year – could be produced from all the gas flared routinely around the world.