dr. sam amadi presentation at the lagos oil club_april 23rd 2012
DESCRIPTION
Dr. Sam Amadi Presentation on 'Unbundling the Nigeria's Electricity Sector: Meeting the Needs' at The Lagos Oil Club, April 23rd 2012.TRANSCRIPT
Contents:
Background to capacity growth in the Nigeria Electricity Supply Industry
Assessment of Capacity and Capacity problems in Nigeria
Blackouts – System Collapses
Measures to increase capacities in Nigeria
Solving Capacity problems in Nigeria: Are more Utilities and Competition the answer?
Electricity on Demand
Background to Capacity growth in the NESI
History of power generation in Nigeria:
Electricity generation in Nigeria began in 1896.
NESCO commenced operation in Jos as a utility company in 1929.
The Electricity Corporation of Nigeria (ECN) responsible for distribution, was established in 1951
The Niger dams authority (NDA) was established in 1962
ECN and NDA were merged in 1972 to form National Electric Power Authority (NEPA).
NEPA, a statutory body had monopoly over electricity generation, transmission, distribution and sales.
In 2002, the Power Holding Company of Nigeria (PHCN) was formed.
Electricity on Demand
Assessment of capacity and capacity Problems in
Nigeria
Electricity on Demand
Assessment of capacity and capacity Problems in Nigeria
Problems:
Generation; Transmission; Distribution sub-sectors
Neglect and inadequate investment resulted in dilapidated power system with high technical and non-technical losses
Poor Maintenance of both generation, transmission and distribution facilities
Corporate Governance issues resulted to the inability of the Utility Operators to generate enough revenue from its operation to cover its cost and invest in new facilities
Inadequate planning for capacity expansion of infrastructure
Inadequate Metering Capacity
Electricity on Demand
Assessment of Capacity and Capacity problems – DEMAND PROJECTION AND CURRENT GENERATION CAPACITY
Electricity on Demand
NATIONAL CONTROL CENTRE, OSOGBO (TCN)
TENTATIVE GENERATION SCHEDULE AND FORECAST FOR SATURDAY 21/01/2012 & SUNDAY 22/01/2012.
STATION
G E N E R A T I O N
R E M A R K S OFF PEAK PEAK
00:00- 18:00 HOURS 18:00 - 24:00 HOURS
GEN S/R GEN S/R
SHIRORO 280 0 280 0 2 units to be on bar.
KAINJI 298 40 298 40 5 units to be on bar.
JEBBA 80 0 400 0 1unit for 16hrs & 5 units for 8hrs.
OKPAI 457 0 457 0 3 units to be on bar.
EGBIN ST(GAS) 780 80 780 80 4 units to be on bar.
SAPELE ST 118 0 118 0 2 units to be on bar.
SAPELE GT NIPP 0 0 0 0 No unit on bar.
AJAOKUTA 0 0 0 0 No unit on bar.
DELTA II-III 31 0 31 0 3 units to be on bar.
DELTA IV 100 0 100 0 2 units to be on bar.
AFAM IV - V 62 0 62 0 1 unit to be on bar.
AFAM VI 583 0 583 0 4 units to be on bar.
AES 141.2 0 141.2 0 5 units to be on bar.
GEREGU 251 0 251 0 2 units to be on bar.
OMOTOSHO 101.2 0 101.2 0 4 units to be on bar.
OMOKU 26.1 0 26.1 0 3 units to be on bar.
OLORUNSOGO PHASE I 0 0 0 0 No unit on bar.
OLORUNSOGO PHASE II 95.5 0 95.5 0 1 unit to be on bar.
IBOM 61.8 0 61.8 0 1 unit to be on bar.
TRANS AMADI 8.8 0 8.8 0 1 unit to be on bar.
TOTAL AVAILABLE GEN. 3474.6 120 3794.6 120 GENERATION SHORTFALL:
FORECAST (DEMAND) 8320.0 10400.0 OFF-PEAK : 4845.4MW
GENERATION SHORTFALL 4845.4 6605.4 PEAK : 6605.4MW
# Parameters Qty
1 Capacity 330/132kV (MVA) 7,044
2 Capacity 132/33kV (MVA) 9,852
3 Number of 330kV Substations 28
4 Number of 132kV Substations 119
5 Total Number of 330kV circuits 60
6 Total Number of 132kV circuits 153
7 Length of 330kV lines (kM) 5,650
8 Length of 132kV lines (kM) 6,687
9 National Control Centre 1
10 Supplementary National Control Centre 1
11 Regional Control Centres 2
Current Transmission Capacities:
Electricity on Demand
Assessment of capacity and capacity Problems in Nigeria - Cont’d…
Current Distribution Capacities: Route Length
(KM) Transformer
Capacity (MVA) Number
33kV Distribution Lines length
46,481
11kV Distribution Lines Length
31,784.76
0.415kV Distribution Lines Length
193,822.01
Total No. of Injection Sub-stations (33/11kV)
1,078
Total Capacity of Injection Sub-stations
10,988.29
Total No. of Distribution Sub-stations
41,477
Total Capacity of Distribution Sub-stations
17,044.29
Total Number of Registered Customers
4.6 million
Electricity on Demand
Assessment of capacity and capacity Problems in Nigeria - Cont’d…
The gas sector holds significant potential. Nigeria has the 7th largest reserves in the world with significant scope for growth. The gas quality is high – particularly rich in liquids and low in sulphur
Following several years of low domestic gas utilisation, the sector is now confronted with a huge potential for unprecedented growth from about 5bcf/d currently to over 20bcf/d by 2011/15. Compared with the global average, this is by far the world’s most aggressive growth forecast
Electricity on Demand
Natural Gas:
Assessment of capacity and capacity Problems in Nigeria - Cont’d…
Gas to Power
Efforts are focused on meeting a projected 3.5 bcf/d of gas demand by over 30 existing and proposed power plants.
10
PHCN
818 mmscfd
1
NIPP
1,297 mmscfd
2
JV IPP
322 mmscfd
3
3rd Party IPP
531 mmscfd
4
• Egbin + AES • Delta IV • Sapele • Olorunshogo • Omotosho
• Geregu • Afam I-V
• Olorunshogo • Sapele • Geregu • Omotosho • Ihovbor
• Egbema • Gbaran • Omoku • Alaoji • Calabar
• Chevron Agura • NAOC, Okpai • Total, Obite • Shell, Afam VI • ExxonMobil, QIT
Numerous 3rd party IPP in consultation with the Bulk Trader
Electricity on Demand
Assessment of capacity and capacity Problems in Nigeria - Cont’d…
Gas to Power Supply Outlook:
11 Electricity on Demand
Assessment of capacity and capacity Problems in Nigeria - Cont’d…
Coal:
At present, there is no single coal-fired-power plant operating in Nigeria despite the abundance of high quality coal deposits
Coal exploitation is at its lowest ebb in Nigeria
FGN has initiated the Coal-to-Power projects with at least 3 Government owned proposed power stations
IPPs are also encouraged to develop coal power plants
Base-load clean coal power plants are needed to support power supply from the national grid.
Electricity on Demand
Assessment of capacity and capacity Problems in Nigeria - Cont’d…
Electricity Metering Capacity Issues: Only about 40% of the Country’s population (about 160
million) has access to electricity.
Total customers figure is about 4.5 million
There is a very wide metering gap in the NESI with only about 40% of customers metered. A lot of customers are on estimation.
Electromechanical, Electronic and Prepaid Meters are in use in Nigeria.
Some of the problems associated with metering in the NESI include; bye-pass of meters, inadequate funding;
NERC has developed a proposal for Smart Metering deployment based on certain drivers.
Electricity on Demand
Assessment of capacity and capacity Problems in Nigeria - Cont’d…
Drivers for Smart Metering in Nigeria:
Anti-theft of electricity and surveillance capability
Energy accounting and Loss control
Remote collection of real-time data for billing and analysis on demand and on schedule
Guaranteed cash flow through popular PPM functionality (solving the problems of inflated billing efficiency and poor collection efficiency)
Remote switching
Customer control of budget and enhanced decision making
Smart metering already in Nigeria in the form of Automated Meter Reading (AMR) for MD customers and Grid metering
Electricity on Demand
14
Assessment of capacity and capacity Problems in Nigeria - Cont’d…
Drivers for Smart Metering in Nigeria Cont’d… Existing PPM clusters may be upgraded to smart metering
Scalability, openness and flexibility of smart metering to dovetail into future technologies (e.g. smart grid)
Bad debt recovery management from time of cut-over (this can even help defray the cost of smart metering roll-out)
Regulatory demands (e.g. the ability to automatically load free units to consumers who qualify under the Power Consumer Assistance Fund or automatically apply loss adjustment factors)
The Aggregate Technical, Commercial and Collection loss reduction model for privatization adopted by NCP.
Electricity on Demand
Assessment of capacity and capacity Problems in Nigeria - Cont’d…
Human Capacity Issues: Total Number of permanent Staff 37,235
Total Number of casual Staff
11,000
Percentage of staff in core technical functions
59%
Percentage of staff in non-core technical functions
41%
Percentage of staff above 40 years of age 51%
Percentage of staff with Senior School Leaving Certificate or equiv.
33%
Percentage of staff that are graduates (university/Polytechnic)
25%
Percentage of workforce that has served for over 21 years
32%
Implications
Dearth of competent and skilled staff
Poor Succession Planning due embargo on employment
Ageing Workforce
Paying for inefficiency and unable to deploy lean financial resources optimally
Assessment of capacity and capacity Problems in Nigeria - Cont’d…
Electricity on Demand
Blackouts –System Collapse
Electricity on Demand
What is it and how does it happen (Causes) –
Under frequency – when demand is more than supply
Over Frequency – when supply is more than demand
Poor transmission infrastructure maintenance and failure of equipment
Poor trace clearing – vegetation control
Disco-ordination of protective relays
Over-loading of transmission lines and equipment
Blackouts –System Collapse
Electricity on Demand
Blackouts –System Collapse (Statistics)
Electricity on Demand
Date of last total collapse: 10th November, 2011
No. of days since last total collapse:71
Date of last partial collapse: 20th November, 2011
No. of days since last partial collapse:61
Highest No of days attained in-between total collapses: 131
Highest No of days attained in-between partial collapses: 143
Jan
Feb.
Mar.
Apr
May
Jun
Jul
Aug
Sep.
Oct
Nov
Dec
Total
2009
Total 1 -- -- -- 2 5 5 4 1 -- -- 1 19
Partial -- 5 4 3 3 -- -- 1 -- 2 1 1 20
2010
Total --- 3 1 -- 3 3 3 -- 2 2 1 4 22
Partial 1 -- -- 1 1 3 4 4 3 2 -- 1 20
2011
Total -- -- -- -- 4 3 1 1 1 2 1 --- 13
Partial -- 1 1 -- -- -- -- 1 -- 1 2 --- 6
2012
Total
Partial
Blackouts –System Collapse - Cont’d…
Mitigating measures: Re-strengthening of the Transmission Grid: Expansion and
rehabilitation
Provision of Ancillary Services such as Spinning Reserve (for Frequency Control), Reactive Power (Vars) (for Voltage Control), Black Start etc.
Developing tariffs structure for compensating Ancillary Services.
Generation capacity increase through the participation of Licensed IPPs, FGN, State and Local Governments to the reduce the imbalance between generation and demand.
The Commission has developed the Grid Code: System Operator implements the Grid Code and preserves the integrity and security of the Grid System(through Operational Planning, Connection, Grid Operation and Control).
Electricity on Demand
Measures to increase Supply in Nigeria
Electricity on Demand
Reform of the Power Sector
The Electric Power Sector Reform (EPSR) Act passed in March 2005, led to the enactment establishing the following:
The emergence of the Power Holding Company of Nigeria (PHCN) as the holding company of the assets and liabilities of NEPA, and a vertically integrated company.
The unbundling and corporatization of PHCN into 18 successor companies (6 GenCos, 11 DisCos and TCN), in preparation for the privatization exercise.
The establishment of a Regulator for the sector – Nigerian Electricity Regulatory Commission (NERC).
Establishment of the Rural Electrification Agency (REA).
Electricity on Demand
22
Measures to increase supply in Nigeria - Cont’d…
Measures to increase supply in Nigeria - Cont’d…
Presidential Road Map
Private Sector Participation (issuance of Licenses/Permits): On-grid (Generation Licenses) - 32 - 14,056MW
Off-grid (Generation Licenses) - 23 - 335MW
Embedded Generation Licenses - 4 - 663MW
Distribution Licenses - 3
Bulk Trader License - 1
Captive Generation Permits (for own use) - lots
Privatization exercise: 11 DISCOS – divestment of FGN shares (51/49)
4 Thermal GenCos – divestment of FGN shares (51/49)
3 Hydro GenCos – (Concessions)
TransCO - Management Contract
Electricity on Demand
15,054MW
Electricity Trading arrangement: the Bulk Trader and World Bank Guarantees:
The Nigerian Bulk Electricity Trading Company PLC has now been incorporated this entity will be appropriately resourced and established, negotiate power purchase agreements with successor generating companies, existing independent power producers (IPPs) and potential new entrants into the power generating market.
The World Bank will provide partial risk guarantee for the power procured by the Bulk Trader.
Federal Ministry of Finance, in addition to the World Bank partial risk guarantee, is reviewing a set of other options through which the Federal Government may provide credit enhancement to the bulk purchaser that will enter into PPAs with the successor generation companies and IPPs.
Electricity on Demand
Measures to increase supply in Nigeria - Cont’d…
Proposed Trading Arrangement In the Transition Stage:
Electricity on Demand
Measures to increase supply in Nigeria - Cont’d…
Generation Capacities Expansion – Future Outlook (Ongoing Projects)
YEAR
2012
2013
2014
2015
Existing Generation Capacity (FGN + IPPs)
5,317MW
5,317MW
5,317MW
5,317MW
New IPPs - 1,405MW 1,655MW 6,570MW
NIPPs 1,000MW 1,500MW 2,275MW -
TOTAL 6,317MW 8,222MW 9,247MW 11,887MW
Electricity on Demand
Measures to increase supply in Nigeria - Cont’d…
Electricity on Demand
TRANSMISSION GRID STRUCTURE WITH THE SUPER GRID IN PLACE
ONITSHA
KAINJI
JEBBA/GS
JEBBA/TS
SHIRORO
AJAOKUTA
Abeokuta
Ikeja
Akure
Benin
Asaba
Port Harcourt
Owerri
Uyo
ALAGBADO
Birnin Kebbi
Minna
Kaduna
Abuja
Jos
Bauchi
Gombe
Damaturu
Maiduguri Kano
IIorin
Ado Ekiti
Lokoja
Lafia
Makurdi
MAKURDI
Enugu Akwa
Umuahia
Ibadan
Sokoto
Gusau
Katsina
Hadejia
Jalingo
Yola
Abakaliki
Calabar
JIGAWA
KANO
KATSINA
SOKOTO
ZAMFARA
KEBBI
KWARA
KADUNA
ABUJA
NIGER
NASSARAWA
TARABA
YOBE
PLATEAU
BENUE
EBONYI
CROSS RIVER
AN AMBRA
OSUN
BAYELSA
KOGI
EDO
ABIA
RIVERS DELTA
ONDO
OYO
ENUGU
IMO
ADAMAWA
BORNO
GOMBE
BAUCHI
EKITI
LAGOS
AKWA IBOM
ATLANTIC OCEAN
NIGER
REPUBLIC
OF BENIN
REPUBLIC
OF CAMEROON
REPUBLIC
OF
CHAD
TRANSMISSION LINE LEGEND
BULK SUPPLY POINT
HYDROELECTRIC POWER STATION
THERMAL POWER STATIONS
330 KV
H
SAPELE P/ST.
DELTA POWER ST.
OGUN
Osogbo
EGBIN P/ST.
NIGERIA
Potiskum
Niamey
132 kV
2
3
2
3
4
2
2
Aliade
Mambila
Bali
2
AFAM POWER ST.
2
2
330KV LINES – MULTIPLE CIRCUITS
330KV LINES - EXISTING
2
2
2005 : new
2
2015 : new
2015 : new
2015 : new
2015 :
3rd Circuit
2010 : new
2015 : new
2010: new
2
2
4 2015 : new
SAPELE
P/ST.
Okitipupa
Geregu
2015 : 2nd Circuit
Agip
Zaria
2015 : new
2015 : new
2015 : new
2015 : new
700KV LINES – SUPER GRID
700 / 330KV SUBSTATION
Mambila Hydro
Some 330kV lines especially in
Lagos and Delta areas could not
be indicated on this geographical
Map.
See attached single diagram for
Details.
NOTE:
Ongoing Transmission Capacity Expansion Projects
• 5,590 MVA of
330/132kV
transformer capacity
• 3,313 MVA of
132/33kV transformer
capacity
• 2,194 km of 330kV
lines
• 809 km of 132kV
lines
• 10 new 330kV S/S
• 7 new 132kV S/S
• Expansion of 36
existing 330kV and
132kV S/S
• Closing the eastern
flank of the national
grid
Measures to increase supply in Nigeria - Cont’d…
Electricity on Demand
28
3540 MVA additional Inj. Capacity
•2666 Km of 11 KV Lines
22,598 Distribution Transformers
•1701 Km of 33 KV Lines
Ongoing NIPP Distribution Capacity Expansion Projects
Measures to increase supply in Nigeria - Cont’d…
New Cost Reflective Tariffs The Nigerian Electricity Regulatory Commission is undertaking
a major review of the tariff regime which will be completed before the end of the first quarter of 2012 with a view to replacing the national uniform tariff with a new genuinely cost-reflective ceiling on end-user tariffs.
However, to protect against “rate shock” and to ensure that low-income consumers are
provided with the “lifeline” tariff for consumers that cannot truly afford to pay their bills.
A Power Consumer Assistance Fund is being established by the Commission to support indigent consumers.
Electricity on Demand
Measures to increase supply in Nigeria - Cont’d…
Deployment Strategy to address metering capacity gap:
Strategy: phased implementation through Project Monitoring Office domiciled at NERC.
1. Grid Meters
(Immediate action since the successful take-off of the Transition Market Stage depends on adequate Grid metering)
2. Industrial/ Commercial /Institutional Meters
Change all substandard MD meters to smart meters
(Immediate action since about 60% revenue comes from these classes of customers)
Electricity on Demand
30
Measures to increase supply in Nigeria - Cont’d…
Deployment Strategy to address metering capacity gap – Cont’d…
3. Residential Customers Each phase expected to last 15 months
Phase I
i. Towns are first categorized as (1) State Capitals and major commercial hubs (2) Other commercial centers (3) Local Govt Capitals and (4) Others
ii. Start pilot projects by converting PPMs where possible to smart metering in small areas in strategic cities: Abuja, Lagos, Kano, Port Harcourt, Onitsha and Yola.
Phase II
i. Use lessons learnt in pilot schemes to cover category (2) towns.
ii. Replace all conventional meters with smart metering in category (2) towns.
Phase III
i. Use lessons learnt in pilot schemes to cover category (3) towns.
ii. Replace all conventional meters with smart metering in category (3) towns.
Phase IV
i. Replace all conventional meters with smart metering in category (4) towns. Cover all unmetered customers with smart metering.
Electricity on Demand
31
Fuel-to-Power Initiative: In view of the high capital costs and long lead
times required to develop commercial power generation through solar, wind, nuclear and biomass, the Federal Government will focus its development efforts on hydro, coal and natural gas. The potential of natural gas, in particular, will be prioritised and incentives will be provided to investors to exploit this resource to its fullest potential.
Electricity on Demand
Measures to increase supply in Nigeria - Cont’d…
Proposed NIPP Gas Delivery projects
Calabar
Port Harcourt
Warri
Benin City Lagos
Paplanto
Egbin
Omotosho
Calabar
Alaoji
Eyaen
Sapele
Gbaran
Egbema
Ikot Abasi Omoku
Okpai 1&2
Agura, Ikorodu
Obite
Bonny
Geregu
Afam
OBEN TO AJAOKUTA
Ajaokuta
OBIGBO NORTH TO
ALAOJI
IKOT ABASI
TO IBOM IPP
AJAOUKUTA TO OBAJANA AJAOUKUTA TO KADUNA,
ABUJA
ELPS TO OMOTOSHO
ELP TO PAPLANTO
ELP TO EYAEN
SCOPE: • Calabar, 90km off-shore Adanga to Calabar •Eyaen, 5km off ELPS •Egbema, 12 km to Izombie •Gbaran, 6km to Gbaran/Ubie •Omoku, 1km from Omoku •Sapele, 1km to ELPS Oben Sapele System
Electricity on Demand
Measures to increase supply in Nigeria - Cont’d…
There are 11 significant known coal deposits in Nigeria with total proven reserve of over 396million tonnes and 1,091million non-reportable reserve.
Nigeria’s goal is to revitalise the coal mining industry and expand power generation by attracting companies to develop these large coal resources and construct coal-fired generating plants that will connect to the country’s national grid.
FGN has initiated the construction of 3 coal power plants at Enugu, Gombe and Kogi. Already preliminary designs are in progress.
NERC has developed coal-to-power special tariffs to encourage private investment in clean coal technology power generating plants.
Electricity on Demand
Coal Fuel Measures to increase supply in Nigeria - Cont’d…
Renewable Energy National REPS is 10% 2020.
Feed-in-tariffs (FITs) are being developed by the Commission for Renewable Energy Generation; funded by USTDA.
FGN is constructing a 10MW wind farm in Katsina
FGN also consider full development of small hydro potentials across the country
FGN, States and Local Governments are involved in various Solar PV projects
There are several ongoing IPP small scale waste-to-power projects.
Electricity on Demand
Measures to increase supply in Nigeria - Cont’d…
Other Interventions A strategy has been put in place to ensure the
recruiting, training and retention of an effective workforce that will drive government's vision for the electricity industry.
Making fully operational the National Power Training Institute of Nigeria (NAPTIN).
The Commission has just approved Regulations on Embedded Generation and Independent Electricity Distribution Networks (IEDN) to increase generation capacity and access to electricity.
Electricity on Demand
Conclusion
Solving capacity problems: Are more Utilities and Competition the answer? YES!!!
Completion of all ongoing Power Stations, Transmission Lines & Sub-Stations and Distribution Lines & Sub-Stations will increase the viability of the Utilities and enhance capacity of power production and delivery.
These will restore electricity grid system integrity and make the sector more attractive to the private sector
Electricity on Demand
What Does Infrastructure Deficit tell Us about Governance Deficit? Lack of Vision – Compare Nkrumah and Akosombo
Dam
Failure of strategic planning
Persistent problem of corruption
Perverse political incentive
Weak commitment to development
7 Disciplines to Overcome Infrastructure Deficit Discipline of effective and independent regulation
Discipline of cost-reflective tariff
Discipline of prudent and cost-efficient investment
Discipline of effective and efficient project management
Discipline of effective and meaningful public participation
Discipline of consistent policymaking
Discipline of honest leadership
Time to Change the Paradigm Private sector is important but not the sole driver of
infrastructure development for three reasons:
- Can’t take all the risks
- Cares more for short term rather than long term
- Cares more about financial interest rather than security or strategic interest
Contact us at: Adamawa Plaza, Plot 1099 First Avenue,
Off Shehu Shagari Way, Central Business District,
Abuja www.nercng.org
E-mail: [email protected] CEO- [email protected]
Tel: +234-8033299879
Electricity on Demand