Plentiful activity in the power industry

While the separate elements in the conventional energy chain like to blame each other for the many shortcomings of the power industry, the Transmission Company of Nigeria (TCN) has secured close to US$2bn from the donor community for the rehabilitation and expansion of the national grid. Its managing director told a meeting of stakeholders in Kano last week that the funded works could raise the system’s total capacity to 20,000 megawatts (MW) over three years.

In June the Niger Delta Power Holding Company had said that eight of its ten national integrated power projects (NIPPs) under construction had been completed, and would together supply 2,000 MW to the national grid. This is mostly restored, rather than new capacity. The TCN’s programme is to improve the transmission links between the ten gas-fired plants in the delta.

In March the federal minister of power, works and housing was present at the unveiling of a new 115 MW turbine by Transcorp Power in Delta State. The owner said that the turbine would lift capacity at its Ughelli plant to 620 MW and that it had a target of 815 MW for end-year.

We have to add a general health warning about expansion plans for the industry. From time to time, the local media reports that little known companies are to invest an improbable number of dollars for an implausible boost to generation capacity worldwide.

At best, we can say that the industry is taking two steps forward for each step backwards. One particular challenge is intra-industry indebtedness including: the debts of government agencies to the distribution companies (DISCOs); the debts of the DISCOs and service providers to the Transitional Electricity Market; and debts predating the privatization of generation and distribution, some covered by the CBN’s intervention fund for legacy arrears.

One route actively being pursued is a mix of clean energy (Good Morning Nigeria, 09 August 2017). The FGN has set a target for renewables to provide 16% of total energy generated by 2030, with contributions from hydro and solar of 7.1% and 5.9% respectively. General Electric alone plans to establish an additional 2,000 MW in hydro capacity.

Another route open to the authorities is unclean power. Bart Nnaji, former power minister and founder/chairman of Geometric, has estimated that the coal deposits in the Anambra basin could sustain generation of more than 4,300 MW per year for 20 years. The development of the deposits would not qualify for funding from the World Bank and many multilaterals.

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