update on activities in the nigerian power sector

8/8/2019 Update on Activities in the Nigerian Power Sector

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Update on Activities in theNigerian Power Sector

Being Presentation byEngr. (Dr.) Joseph O. Makoju

Special Adviser to the President on Electric Power at the

NERC/UBA Seminar on Financing & Investment Opportunities in theNigerian Power Sector at Abuja

25thJanuary, 2007


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Outline

Operational Update Infrastructure Expansion

Sector Reforms

Conclusion


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Operational Update


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Some improvement in generation output nowbeing experienced (although some outputconstraints still exist at a major thermal stationdue to the gas restrictions from NGC

400MW Shortfall). With the recent improvement in relations

with the surrounding communities, we nowhave access to the location of the vandalizedgas pipeline, and negotiations are on for the

commencement of repairs.

Operational Update


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Major Infrastructure Expansion


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1st Batch FG Power Stations (1,600MW)

Geregu:- Work on the 414MW plant is on going. Plant is

on schedule for commissioning in Feb-07.

Omotosho and Papalanto :-. Installation works on-going. On completion the total capacity at both plant will

be 670MW. First fire of Omotosho and Papalanto is

expected to be in Apr 07.


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FG Power Stations...contd

Alaoji:- Civil Works in progress. Some major equipmenthave arrived. Custom clearance and transportation to site

has commenced. The 504MW plant is on schedule forearly 2008.

Mambilla:-Agreement concluded with the ChineseGovernment to part fund this 2,600MW hydro station.

Award of civil works and ground breaking ceremonybefore the end of February and the power station shouldcome on stream by 2012.


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Generation Expansion Plan (2006-2010)

Dec-06 Dec-07 Dec-08 Dec-09 Dec-10

Existing Power Stations 3357 4027 3880 3780 3780

Existing IPPs 750 750 750 750 750

On-going FG Projects1001 1496 2512 3528 4544

On-going NIPP PS 0 2203 2743 2743 2743

Proposed JV-IPPs 0 1220 2790 2790 2790

Other IPPs 90 510 1265 1365 1865

Total 5198 10206 13940 14956 16472

Notes: (i) Major Hydro Projects eg: Mambilla will come on stream by 2012

(ii) A 25yr Power Sector Development Plan aimed at achieving 150000MW has been developed.

(iii) Sustained funding of the sector (PPP) is required to ensure execution of the Development Plan to avoid any future reversals.


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FG Transmission Projects

Owerri-Ahoada-Yenogoa Transmission Line

and associated SS has been commissioned byMr. President (linking Bayelsa State for the firsttime to the national grid)- October 2006.

Commissioning of the 330kV Ikeja West(Nigeria) Sakete (Benin) interconnectionexpected in the first half of February 2007.


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NIPP (2,770MW)

Power Stations

Major equipment for Egbema andIhovbor Power Stations have arrived andhas been cleared from the ports, while

that of Gbaran Ubie; Calabar and SapelePower Stations have been shipped.


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NIPP...contd

Transmission

Contractors on Transmission projects

under the NIPP have mobilized

Challenges- community issues; weather etc

Distribution Procurement Process nearing completion


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NIPP POWER STATIONS:NIPP POWER STATIONS:

Lot 1 CALABAR, 561MW

Lot 2 EGBEMA, 338MW

Lot 3 EYAEN, 451MW

Lot 4 GBARAIN, 225MW

Lot 5 IKOT-ABASI, 300MW

Lot 6 SAPELE, 450MW

Lot 7 OMOKU, 230MW

Lot 8 IBOM POWER, 188MW

Total = 2,743 MWTotal = 2,743 MW

Location and Scope of NIPP Power Stations


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Scope of NIPP TransmissionScope of NIPP Transmission

WorksWorks


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3540 MVAadditional

Inj.

Capacity

2666 Kmof 11 KVLines

22,598

DistributionTransformers

1701 Km

of 33 KVLines

And Scope of NIPP Distribution Project


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Calabar

Port Harcourt

Warri

Benin CityLagos

Paplanto

Egbin

Omotosho

Calabar

Alaoji

Eyaen

Sapele

Gbaran

Egbema

Ikot AbasiOmoku

Okpai1&2

Agura, Ikorodu

Obite

Bonny

Geregu

Afam

OBEN TO AJAOKUTA

Ajaokuta

OBIGBO NORTH TO

ALAOJI

IKOT ABASI TO

IBOM IPP

AJAOUKUTA TO OBAJANAAJAOUKUTA TO KADUNA,

ABUJA

ELPS TO OMOTOSHO

ELP TO PAPLANTO

ELP TO EYAEN

SCOPE:SCOPE:Calabar, 90km

off-shore Adanga to CalabarEyaen, 5km off ELPSEgbema, 12 km to IzombieGbaran, 6km to Gbaran/UbieOmoku, 1km from Omoku

Sapele, 1km to ELPS ObenSapele System

Gas Delivery Projects


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Sector Reform


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1999- our Starting Point (Vertically IntegratedMonopoly)

2001- Introduction of a new Power Policy

2005- Promulgation of the EPSR Act

2005- Formation of PHCN Plc

2005- Incorporation of successor companies

2005- Inauguration of NERC

2006- Take-off of new successor companies

(and the commencement of the winding down of PHCN HQ)

Sector Reform - Highlights


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Sector Reform

BPE has incorporated the Nigeria Electricity Management Agencyto manage the legacy liabilities of PHCN in August 2006

Resolution of staff severance issues are at an advanced stage 1st power generation licences issued by NERC in Jul-06

Procurement process for O&M of TransysCo is on-going

Privatization of some SCs to commence in 1st

Q-07 Work on the RE Policy as well as the set-up of REA Fund on-

going

Procurement process for disposal of Ijora and Calabar PowerStations has commenced

Private Sector funded mass metering programme in the distributioncompanies has started.

d


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Present Landscape

Decentralised Structure

18 successor companies

Market Operations (Wholesale Mkt.; Transfer Pricing) Independent Electricity Regulator

REA NEMA

Some Private Players (AES,AGIP,RCM, Fibre Optic Coys)

Gradual disappearance of the vestiges of PHCN

Sustaining ongoing initiatives (Master Plan/Public

Enlightenment)


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Are we done?

Certainly Not!Unbundling is

not an end in itself but a means toachieving higher levels of efficiency &

improved service reliability(through thereplacement of a monopoly dominated

sector with a liberalized sector driven bymarket dictates).


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The next logical step

Quickly move the unbundled entities

to a position of complete financialautonomy. The underlying issue

being to make the sector financially

self sustaining...herein lies the

challenge.


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Some Challenges

Huge Supply Deficit

End User Tariffs

Commercial Performance

Funding Reform (Severance Pay,Union Buyin etc)


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What next? . surmounting the challenges

SPE being set-up to inherit major liabilities of

PHCN (loans, PPAs etc )which would otherwise

have had a huge impact on the working capitalof SCs.

High level inter-agency committee currently indiscussions with the Unions

Schemes being designed to improve commercial

performance (Upgrade of RCM; Concessioning of Dist.Coys and Gen. Coys; O&M for new PS etc ).


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Essential Requirements for a Successful

Power Sector Business

Collection efficiency of at least 90%. Cost Reflective Tariffs (MYTO)


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Our Expectations

The ongoing procurement process for

the sale/concession of the distributioncompanies and some power stations willattract credible investors with the

required experience and financialcapacity to manage, grow and develop theESI to the mutual benefit of all

stakeholders.

Conclusion


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Conclusion

Necessary steps are being taken to

ensure that the reform program is seenthough to its logical conclusion the

creation of an efficient and reliable privatesector led electricity industry.


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Thank you

update on activities in the nigerian power sector

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