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How Nigeria can maximise hydropower resource — Audu

By Kingsley Jeremiah
09 October 2022   |   4:10 am
The world is in a serious energy crisis and global warming is right here as a result of the excessive use of fossil fuels. So, International HydroPower Day ensures that hydropower generation is well-positioned

Lamu

As the world marks International Hydropower Day, the Managing Director of Mainstream Energy Solutions, Lamu Audu, discusses with KINGSLEY JEREMIAH, electricity challenges in the country and bottlenecks hindering national development through the country’s vast hydro resource.

What is the significance of International Hydropower Day?
The world is in a serious energy crisis and global warming is right here as a result of the excessive use of fossil fuels. So, International HydroPower Day ensures that hydropower generation is well-positioned because the importance and significance of hydropower are still not being appreciated in some countries.

While hydropower is the most sustainable energy or electricity generation, the whole idea of global hydropower day is to highlight this and to advocate for global acquisition of the position of hydro in the scheme of things looking at the huge potential of untapped hydro schemes all over the world. Africa for example, up to this moment, has only about 17 per cent of its hydro potential in use.

If hydropower is cheap and efficient, why have we not prioritized it? What’s the missing link? 
It is easy for us to understand the situation in Africa, particularly, Nigeria. For this kind of huge investment in hydropower, you need the enabling law, environment, and enabling regulation to attract investments to make such projects bankable.

One of the major reasons why people cannot continue to rely on the government’s ability to build these assets is because there is no single hydropower plant that has been built by a private investor; it has always been the government, and that is not because hydropower generation is not sustainable. Out there in other developed countries, why they have succeeded in that direction is because they have created that appetite for people to invest and develop the scheme. So, what we need to move this process forward is for the government to sit down and see what can be done.

I’m at Mainstream Energy Solutions, for example, and we know where the issues are. If we can come together with the government and some international/regional financial institutions, and brainstorm on how best we can get people to begin to invest, we can change the situation.

Currently, the policy is not strong enough to spur people to invest in hydro development, especially greenfield development, the utilisation of hydropower for national development, and all. We have all sorts of categories of hydro potential in Nigeria.

Hydros can easily be developed in rural areas and can be run off-grid. The technology is not so sophisticated, and you need some people from somewhere to come and manage these facilities for you. You can easily train the local people to manage these facilities and the impact it will have on the rural community and the economy is huge because most of our people live in rural areas, but they lack access to electricity, while we have all these rivers running around the whole place.

If we generate just 500 kilowatts, that’s a lot of energy and these things don’t need to be put in place. So, the government really will need to come up with a policy, driving this into policy, whether it is a legal framework, whichever name you call it, we need policies to be able to get people to invest.

We are having this conversation at a time when the Electricity Bill is currently at the National Assembly. Do you think the bill captures hydropower exploration properly?
From the little I know about the bill, it has not given much emphasis on hydro development. Unfortunately, a lot can be done. The bill is not yet an act. It can still be looked at and reviewed before it is assented to. So, I would call on all stakeholders, including the National Assembly to look through this because we cannot continue to rely on fossil fuels. Besides this, we have seen repeated issues with gas for thermal plants. Most of them are not running because of lack of gas and even when they run, at what cost to the environment, even the cost of generation? At the end of the day, the cost of operation is so low for hydro plants and they provide the lowest tariff. I will at this point call on the National Assembly to go further than what they have put in the bill to see that hydropower is put at the forefront to attract investment.

The sustainability of hydro plants is very concerning given rising sea levels, which are becoming very unpredictable. Are you worried?
To some extent, this is something to look at. As you already know, the fuel that drives the hydro turbines is water and climate change has so much impact on weather patterns to the extent that it becomes much more unpredictable than before. While in some places, you have drought, in others places you have floods and the kind of historic cycle that we used to have where you can predict the inflow into a reservoir is becoming more difficult. But science is catching up with the development and better ways of predictions.

In Europe, this year’s drought-hit some major rivers. For example, rivers in UK and China had all these issues.

The International Hydropower Association (IHA) is looking for ways of mitigating the impact of climate change on hydro operations. A lot of emphasis is also placed on pump storage systems where you don’t have to use technology as we have. This will reduce environmental impact because there is no need to build huge dams with huge reservoirs, as it used to be with a normal hydro scheme.

Dams like Kainji, Jeba, and the rest are not just to generate electricity; they are also flood management systems. At Mainstream, we have a satellite that guides us and helps us to see activities ahead and plan. These are the kinds of technology that I mentioned.

You are currently the only Nigerian at the IHA. What are the benefits of having more Nigerians on board? 
It is a rare opportunity for us, and I am privileged to be on the board of IHA. This involvement has opened up my understanding of hydropower on the global stage. It offers the opportunity to see how people perceive hydropower from regions of the world, and at the same time, how to solve some of the issues.

In Nigeria, we don’t have a serious push for the development of hydropower. It is the other way in other countries.

Hydropower generates about two million jobs globally. Nigeria has a huge energy crisis and a high rate of unemployment. Are there ways that we can use hydropower to address national challenges? 
We must look at hydro schemes, not just generating electricity. Hydro can be for a variety of purposes, including power generation, irrigation, agriculture, and flood control. These will ordinarily create a lot of jobs. So, having a dam in place gives you a lot of opportunities, as you can leverage it for national development, and it will empower people across communities. For instance, at Mainstream, we are building an industrial park close to our hydropower plants because energy is the main ingredient for industrial activities. So, if you have power and land, there is a lot that you will do that will attract people. Once an industry is set up, other things will naturally follow. For instance, people that would work in industries will need housing; they will need schools for their children, hospitals, recreational facilities, and others. The bottom line is that it is a result of proper management of hydro.

You have spoken so much about policy and regulation, are these all the challenges affecting hydro development in Nigeria? 
I think an investor just wants to ensure that his investment is protected and there will be a good return on it. The bottlenecks and different fees make the return on investment very low. Our concession fee for example is indexed to the dollar. We feel it is not fair in a Nigerian environment. It is even against the law because we are supposed to transact in naira.

When the government puts its rent first, at the end of the day, you will discover that after making that investment, almost everything returns to the government, while the investor goes home with little or nothing. It will be difficult for an investor to put more of his money into a project where proceeds are largely used to relieve the government of its burden.

What we are saying is that the government should create a good environment and leave the burden of finance to private investors. Put differently, the government should concentrate on things including appropriate regulation, and the creation of the right environment for investors to thrive. A situation where investors are bogged down with the payment of so many bills, including concession fees, royalty fees, and so many other charges is uncalled for.