HERIOT-WATT UNIVERSITY SCHOOL OF ENGINEERING AND PHYSICAL SCIENCES MSC IN ENERGY / RENEWABLE ENERGY ENGINEERING
PROJECT PORTFOLIO
Title: EVALUATION OF EMBEDDED POWER GENERATION IN NIGERIA
Author: OLUWOLE ABDUL-JELIL ADEBANJI
Registration Number: 091607267
Date: 15TH AUGUST, 2011.
Supervisor: Dr. MOUNIF ABDALLAH
DECLARATION OF AUTHORSHIP I, Oluwole Abdul-jelil Adebanji (091607267) confirm that the Project Proposal entitled “EVALUATION OF EMBEDDED POWER GENERATION IN NIGERIA” is part of my assessment for the Critical Analysis and Research Preparation Module I declare that the report is my own work. I have not copied other material verbatim except in explicit quotes, and I have identified the sources of the material clearly.
(Signature)
(Place and Date)
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ACKNOWLEDGEMENT
I give glory to GOD almighty for good health and wisdom since the start of my academic year till date, my profound gratitude also goes to my teachers and lecturers within and outside my study department for their enormous support. Also I will like to give honour to Mr. Kamal Habib and Mr. Olubunmi Obajuluwa for the necessary documents and references, Miss Nonye for her relentless support, Miss Rukayat Balogun and Miss Tosin Nurudeen who both showed me love, Miss Tosin Onabanjo for her numerous corrections, Mr. Dipo Adewale (Dr. zaga) for topic analysis, Mr. kamaldeen Oluwole for finances and support, Mr. Abubakre Bakare my reference coordinator, Dr. Mounif Abdallah, for supervising this project and guiding me through, and others to whom I have not acknowledged in here, I appreciate your prints in my life and wish you the very best in your endeavour. My final and utmost gratitude goes to my parents, Chief Mr. and Mrs. Oluwole, to whom God have given the privilege to mould me up to this moment and care fore me. I really appreciate you both and I’m no one without you. Thanks and God bless.
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TABLES OF CONTENT CHAPTER 1 1.
Introduction
1
1.1.
Background
2
1.2.
Energy Resources in Nigeria
3
1.3.
Literature Review
9
1.4.
Aims and Objective
13
1.5.
Overview of Dissertation
14
CHAPTER 2 2.
Embedded Generation
15
2.1.
Current Available Technologies in Nigeria
17
2.2.
Recent Advancement, Research and Development
19
CHAPTER 3 3.
Problems of Electricity in Nigeria
22
3.1.
Generation-Supply Incapacity
22
3.2.
National Policy
31
3.3.
Management and Corruption Issues
32
3.4.
Inaccurate Data
33
CHAPTER 4 4.
Economic Analysis of Embedded Power Generation (EPG).
34
4.1.
Emission
34
4.2.
Cost of Technology
38
4.3.
Technical and non-technical loses
42
4.4.
Distribution and Adequacy
46
4.5.
Efficiency (sustainability)
48
4.6.
Environmental Impact
48
CHAPTER 5 5.
Making it Happen
51
4
5.1.
Funding
51
5.2.
Planning and Operation
53
5.3.
Regulatory policies for EG
56
CHAPTER 6 6.
Conclusion
59
6.1.
Contribution to the Knowledge
60
6.2.
Limitation to the Study
60
6.3.
Future work
61
Appendix
62
References
69
5
LIST OF FIGURES
Figure 1: The graphical representation of investment years in the electricity industry Figure 2: Electricity generation in Nigeria from 1970 – 2005 Figure 3: Transmission and Distribution in Nigeria Figure 4: Electricity consumption in Nigeria by sectors Figure 5: Relationship of generation, transmission, distribution, and consumption pattern in Nigeria Figure 6: Costing per MWh of electricity produced from different plant types ($/MWh) Figure 7: Cost per kWh (Nigerian naira) Figure 8: Comparison Revenue Sales between Both Concepts-CP and EG Figure 9: Relationship between functional economic parameters
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LIST OF TABLES
Table 1: Analysis of the Potential Energy Resources in Nigeria Table 2: Existing power generation capacity in Nigeria Table 3: Emission conversion Table 4: Cost comparison between CSP and EPG Table 5: Technology costing per kWh Table 6: Effect of transmission and distribution loses with projection plan (central stations) Table 7: Effect of transmission and distribution loses with projection plan (Embedded Generation) Table 8: Comparison Revenue Sales between Both Concepts; CPS and EPG Table 9: Potential impacts for CPS and EPG
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DEFINATION OF TERMS
CP
Central Plant
CPS
Central Power Station
DOE
Department of Energy
ECN
Energy Commission of Nigeria
EG
Embedded generation
EPG
Embedded Power Generation
FCT
Federal Capital Territory
IAEA
International Atomic Energy Agency
IPP
Independent Power Producers
NARUC (US)
National Association of Regulatory Utility Commission
NERC
National Electricity Regulatory Commission
NEPA
National Electric Power Authority
PHCN
Power Holding Company of Nigeria
RT
Renewable technology
WEM
Wholesale Electricity Market
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ABSTRACT Electricity Issues have become the headline problem affecting growth within the Nigerian economy over the last two decades. This has resulted in changes citizenry believes on the ability of the government to provide adequate supply of electricity resulting in the nations Self-power generation alternative. This dissertation focuses on concept that could enhance adequate supply considering the proposed plan from the Nigerian Electricity Regulatory Commission (NERC). In particular, I analyzed the gap that exist between the present generation capacity to its present and future demands based on the population growth and explained the potential shortcomings in the electricity industry. I evaluate the present concept of Central Power Station (CPS) to promote an efficient and effective electricity generation and supply to the populace with reference to economic costing and environmental consideration. I explored the different potentials available for electricity generation within the country and established the need for policy changes to encourage sustainability of energy consumption and utilization. I find that, Embedded Power Generation (EPG) could be a practical solution to the problem of electricity shortages and the integration of different energy sources into electricity generation with respect to population distribution in the rural and sub-urban areas in Nigeria. More broadly, this dissertation highlights the impact of the present policies of the country in displacing other energy sources and concentrating on conventional sources-gas for electricity generation. Because emission profile has not been considered limited for energy consumption in Africa, many present practices and projects throughout the region are implemented on the basis of need and not of environmental concern. Likewise, if an economic data management board is established with a goal of making every Nigerian count, the problem of projection and forecast on future needs and analysis will gradually become history.
9
1. Introduction Life is known to have a correlation between its energy availability and consumption. The pressure on the available energy resources due to an increase in population of the world over the years has resulted into a global issue across all sectors which is seemingly dependant on energy. This effect is universal and the cumulative effect brought about by the trending Global warming. Nigeria is a country blessed with abundant energy resources with a large proven reserve of oil, gas and other renewable energy resources which can make the country have excess power production, but the growth of the industry still pose a problem to the decision makers an the populace. The energy sector which is the life of every economy contributes about 80% of the total income of the country mainly oil revenue. This industry also account for the water and air pollution-a threat in various parts of the country. The nation accommodates over 150 million people with an average demand of 20,000MW, however its supply is below 4000MWe thus, a per-capita consumption 128KWh/capita of electricity
[1].
The country is experiencing power poverty as, over 70% of the nation lacks
constant electricity supply; this accounts for the rural and rural-urban populace. This has lead to a drag in the development of different sectors cutting across, Agriculture, Education, Technology, Health, Economics and Management, and also an indirect impact on the unemployment rate of the country. Over 60 million Nigerians now uses generators to generate electricity which increases the demand for conventional oil and irrefutably enhance global warming. Environmental crises resulting from of increasing demand for conventional fuel that cumulatively have cumulatively lead to increased awareness of global warming and recent trends of sustainable power generation. This work focuses on the ways of mitigating the excessive use of conventional fuel for power generation and increasing the adequacy of electricity through sustainable means in generation, transmission, distribution and consumption.
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In view of this, the available resources in Nigeria will be presented to analyze the sources of the Nigeria’s problem as well as the parameters which have not been considered in enabling a developmental solution in the power sector. 1.1. Background Nigeria is a country with over 150 million people with the majority of the populace in the rural area. It covers a geographical area of 356,667 sq. miles with 98.6% of it being land (2). From the Federal Government statistics, the nation is divided into 36 states, a Federal capital territory (FCT) and six geo-political zones which leave Nigeria governance and management issue in a complex situation. Just as power is important to the global economy, electricity plays important role in Nigeria throughout the life and activities of its people, with growing and important technological developments. Electricity was first generated in Lagos, Nigeria dating far back to 1896, 15 years after it was introduced in England. Since then, there have been series of legislative changes to the control and management of electricity production and distribution in Nigeria (3), Recently the economy of Nigeria has witnessed several drawbacks due to the epileptic power supply in the country despite the abundance of energy resources. Electricity production has been abundant in the country until the early 1980’s when the power sector experienced isolation with little or no infrastructural development, as well as lack of maintenance. The growing population also is of great concern as this elevated the pressure of the supply-demand structure that is recently experienced. In 2001, the installed capacity of the nation drop to an unbearable 1,750MW from an initial installed capacity 5,600MW with only 24% of the generating unit operating, as compared to its 6,000MW load demand (4).
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1.2. Energy Resources in Nigeria Nigeria is the heart of Africa when it comes to energy resources, and its reserve, together with Libya accounts for two-third of Africa’s crude oil reserve. It also has a huge gas reserve and ranks second to Algeria
(4).
It has the greatest percentage of Africa’s bitumen
and lignite reserve and this make her unmatchable with other countries in the nation as regards conventional energy sources. Below is a subjection of various resources and their measures in the country. 1.2.1. Natural Gas In 2005, Nigeria’s proven natural gas reserves assessed at about 187.44 trillion standard cubic feet, which is larger than its oil resources in terms of energy. The discovery of gas was as incidental as the discovery of oil in Nigeria and almost 75% of the gas produced was being spread throughout the country after its discovery. Nevertheless, the spreading was reduced to about 36% due to the harsh efforts made by the government to monetize natural gas. In the domestic sector, 80% of the energy source is gotten from natural gas which is mainly for power generation while the remaining 20% is used in the industrial sector. The probable lifespan of Nigerian crude oil is about 44 years, looking at the current reserves, misuse and, production capacity which is at 2million b/d productions. However, for natural gas is about 88 years based on the 2005 production rate of 5.84bscf/day (5).
1.2.2. Oil In recent years, the advent of oil in Nigeria has been given the upper hand to any other source of energy, thus leading to its intense growth in the country. In 1999, Nigeria had a verified reserve of 25 billion barrels of mostly low sulphur light crude, which considerably increased to 34 billion barrels in 2004 and presently about 36.5 billion barrels
(5).
The
exploration of the reserves is a result of the aid of Joint Venture operations, an alternative funding scheme, new production sharing plan and the opening of new frontier and deepwater offshore blocks. Due to different oil potentials that have been detected, it is
12
forecasted that, reserves will reach about 68 billion barrels by year 2030. Although oil production has increased gradually in Nigeria in recent years, this however depends on the economics and geopolitics in other producing and consuming countries. The average daily production of crude in Nigeria is 4million barrels per day and it is forecasted to increase to 5million barrels per day in year 2030. Nigeria has four refineries in the downstream oil sub-sector with a size of 445,000 barrels per day and 5001 km network of pipeline from the refineries to 22 oil depots (4). 1.2.3. Coal This was first discovered in Nigeria in 1909 and mining began in 1916 with a recorded output of 24,500 tons. Production rose to a peak of 905,000 tons in 1958/59 with a contribution of over 70% to commercial energy consumption in the country. Available data shows that, graded sub-bituminous coal occurs in about 22 coal fields around the old 13 States of the Federation. The proven reserves in the country are about 639 million tonnes while the inferred reserves are about 2.74 billion tonnes. The consumption has dropped drastically with the discovery of crude oil in 1958 and the general conversion of mechanical engines to use oil. This dropped production to only 52,700 tonnes in 1983 and contributed about 0.02% to commercial energy consumption in the country in 2001. 1.2.4. Hydropower Hydropower structure depends on the different energy levels of water in a dam, lake or reservoir and their discharged tail water level downstream.
Presently, the usage of
hydropower in the country is 29% of the total electrical power supply. The first major hydropower supply station in the country which is situated at Kanji, Niger with capacity of 836MW. There are efforts to expand this to 1156MW. There is another hydropower station at Jebba, on the Niger with an installed capacity of 540MW. An evaluation for rivers Benue, Cross River (at Shiroro, Makurdi and Ikom), and Kaduna indicates their total size to be about 4,650MW. The estimated hydropower resource that is potentially available for use in Nigeria is 11,000MW. Small hydropower systems can be built in all the parts of the country. This will enable the potential energy in the large network of rivers to be utilized and used
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for electrical energy, which will help disperse energy to several parts of the rural community. 1.2.5. Solar Radiation Solar radiation is the radiant energy that is radiated from the sun from a nuclear fusion reaction that creates electromagnetic energy. The amount of solar radiation in a specific place is related to the solar energy potentials. Solar energy is the most promising of the renewable energy sources if we look at its unlimited radiation of energy. The energy the sun radiates is about 3.8 x 1023 kW per second. Research has shown that solar energy resource in Nigeria is fully available for use. Nigeria receives 5.08 x 1012 kWh of energy per day from the sun. This amount of electrical energy is equivalent to 4.66 million barrels of oil per day (4). 1.2.6. Wind Wind is associated with the movement of air masses caused primarily by the differential solar heating of the earth’s surface. This could be harnessed with a wind turbine. Wind energy has been used for centuries for domestic purposes such as water pumping, milling and grinding of grains. A study carried out on wind energy in some states in Nigeria shows that the annual wind speed ranges from 2.32 m/s to 3.89 m/s
(6).
Consequently, efforts
have been directed greatly towards the use of wind power for the generation of electricity. Fast changes in technology has occurred and major wind powered generating plants have been installed in many places for easier access of generating electricity. 1.2.7. Biomass Biomass is the energy of biological systems generated from wood and wastes. Biomass energy is an indirect form of solar energy due to its generation through photosynthesis. The biomasses in Nigeria are wood biomass, residues and waste (forestry, agriculture, municipal and industrial), forage grasses and shrubs, and aquatic biomass. Nigeria is using 80 million cubic meters (43.4 x 109 kg) of fuel wood yearly for cooking and other domestic uses (7).
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The potentials of energy resources in Nigeria are summarized in Table 1 below which shows the various resources, its reserve and its utilization. Table 1: Analysis of the Potential Energy Resources in Nigeria (8) S/
Resource Type
No
Reserve
Production
Utilization
(Natural Units)
Level
(Natural Units)
(Natural Units) 1 2
Crude Oil Natural Gas
36.22
billion 2.06
million 445,000
barrels
barrels/day
187 trillion SCF
7.1
barrels/day
billion 3.4 billion SCF/day
SCF/day 3
Coal and lignite
2.734
billion insignificant
Insignificant
billion -
-
tones 4
Tar Sands
31 barrels
of
oil
equivalent 5
Large Hydropower
11,250 MW
1,938MW
167.4
Million
(167.4 Million MWh/day MWh/day) 6
Small Hydropower
3,500 MW
30 MW (2.6 2.6 million
million
MWh/day
MWh/day) 7
Solar Radiation
3.5-7.0
Excess
of Excess
kWh/m2/day
240kWp
of million MWh/day
(485.1
0.01
million solar PV or of solar PV
MWh/day using 0.01 0.1%
of
million
Nigeria MWh/day
land area) 8
Wind
(2-4)m/s @ 10m -
-
15
height 9
Biomass
Fuel-wood
11million
0.110 million 0.120
hectares
of tonnes/day
forest
million
tonnes/day
and
woodland Animal
245
million 0.781 million -
waste
assorted in 2001
tonnes
of
waste/day in 2001 Energy
72
million Excess
Drops and hectares
of -
of 0.256 million
Agric
Agric. land and tonnes
Residue
all waste lands
of
assorted crops residues/day in 1996
10
Nuclear Element
Not
yet
-
quantified
Table 1 shows that, resources remain abundant in Nigeria but the lack of strategies, techniques and investment to harness and utilize these resources coupled with the right institutional policies for a lawful and environmental production has invariably caused it to remain in its poor economic and infrastructural state. This remains evident in the power sector and all other sectors of the nation. Electricity supply in Nigeria has been stable until the mid 90’s however, due to lack of monitoring, maintenance, planning and investment in the power sector for more than two decades despite the increasing demand capacity for energy, electricity in the nation and other resources as a product of population growth vis-a-vis its need for technological advancement.
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The figure below shows the period of isolation in the sector which cumulatively caused the present problem of electricity drought. There have been drop in investment from 1980 till 1983 where little investment was made into the sector by increasing the capacity of the hydroelectric plants which spanned another two years and then a fluctuation in investment throughout the military reign until the democratic regime where investment consideration were made and implemented in 2000.
Figure 1: The graphical representation of investment years in the electricity industry (9)
There has been lots of research related to the power industry in Nigeria with the aim of identifying the problems and proffering a solution. The effort by different people is presented in the literature review section and their relevance to the present development is summarized in relation to the need of this work.
17
1.3. Literature Review Several studies have been carried out in the past as regards sustainability in electricity generation. Dating far back as 1990, research in renewable energy in Nigeria has determined the potential of renewable energy sources available in Nigeria. It is brought to light that the most appraised research done in the area of renewable energy in Nigeria is dated far back as 1990. In view of this and other subsequent research, the future still seem bright and reliant on conventional fuel with its forecasted rigid oil policy. In 2000, there was appraisal of different research around the world on renewable technology. Subsequently, different observation and recommendation were made by different vendors as regards the potentials of resources available and the ways to which they could be harnessed. Ayodele [10] evaluated the electricity problems in Nigeria and concluded that there is lack of maintenance and that the electricity potential of the country is a multiple of the present demand which have still not been met. He further stressed that there should be better strategies to manage the present capacity before additional implementation with regards to the demand, He also recommended that there should be policy regulations to maintain a sustainable process of energy transmission that account for an average loss of 40% and admitted that the privatization program will enhance development of the sector but there should be greater chances given to indigenous investors. His publication was appraised both home and abroad, the power sector has been privatized and several deregulation has been done to enhance private generation of electricity for commercial purposes but the management problem still persist. Sambo (11) evaluated alternative energy generation and concluded that there has been lack of finances to fast track the development, there is also lack of adequate expertise and even the available ones are not empowered as expertise are mostly sourced from abroad. Others include lack of awareness of renewable technologies, intermittency of resources, thus problems of energy storage and system management in periods of no resources added to the complexity of the problem. He recommended that, there should be deregulation and liberalization of the energy sector so as to give room for appropriate tariffs which will boost the competitiveness of the technology, intensify Research and Development (R&D) in
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Renewable technology (RT) so as to reduce cost, enhance development and sustenance of a renewable energy database, and also encourage huge investment in renewable sources from the revenue of fossil resources. He has made a lot of contribution to the development of RT in recent times which lead to the establishment of Nigerian Energy Commission, and his research have been appraised in the power sectors, where some have been implemented and other are awaiting approval, majorly RT due to the lack of favorable energy policy. He also assessed the roles of energy in millennium development goals and concluded that (12),
there is inability to pay for tariffs due to economic poverty, inability of private sector
contribution due to unfriendly policies, unfriendly community relation which incorporates grievances in the public and debar implementation of developmental process. He recommended there should be privatization of the energy sector to fund and strengthen it, imploring diversified sources for energy generation and intensified R&D into the problems of energy generation and distribution. National Stakeholders Forum on Rural Industrialization and Development through Renewable Energy Technologies
[10]
had also researched the development through
renewable technologies and recommended that; There should be an institutionalized energy policy The total renewable energy potential of the country should be analyzed and identify local conditional priorities to different ecological zones There should be a standard testing laboratory for renewable technology to assure the quality of products There should be an integration to renewable energy by taking global partnerships to aid funding and growth There should be an establishment of renewable energy funding program like the one in India, IREDA. There should be a participatory approach from other successfully developed project, coordinator from other parts of the world to enable the implementation, and public
19
awareness programs to facilitate support from financiers, decision makers and the public. Aliyu and Elegba
(13).
evaluated the prospect of hydropower development for rural
applications in Nigeria and concluded that Integrating into renewable energy has been a problem due to; the technological incapability, high cost of infrastructure, financial constrain, low level of public awareness, and a general absence of a comprehensive energy policy. They also recommended that there should be an assessment to determine the total potential of renewable energy in Nigeria, encourage private investors, and develop training and testing centre’s for this purpose. Implementation of energy conservation modules should be introduced into the educational curriculum. Their works is appraised and many of their recommendation have been put into practice as renewable technology is now getting public awareness after a long time buy yet to have recognition in the nations supply. Akinbami
[14.]
carried out a research on renewable energy resources and technology in
Nigeria; he concluded that the future energy supply projected using MARKAL would provide a large scale linear optimization level as opposed to the non-linear future models of renewable energy. He also said that, due to the scale of economy, large scale hydropower will take the greatest share in commercial renewable technology under CO2 emission mitigation. He also suggested that there should be intensive effort towards energy supply system in the country to adequately and efficiently harness renewable resources to enable economic growth and development. This research did a lot of help analyzing the possible plan of an energy mix economy but it has not been implemented. Ojosu and Salawu,
[6]
evaluated the potentials of windmill utilization according to end use
and concluded that there are good locations with great potentials for energy generation through wind power. This was a very good study to wind potential, however limited to most part of the country but till now, the applications have been insignificant in all parts of the country.
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Ojosu and Salawu, [7] carried out a research and estimated the wind energy density from a wind turbine at a height of 25m in different locations across the country and proved the potentials of generating electricity through wind energy as shown in appendix VI. They concluded that wind energy will help to substantiate the electricity generation in the country. There is however a limitation for large scale implementation to this model, as cost analysis and return on investment where not included in the research. Akinbami et al [15.] evaluated the waste produced in Nigeria daily with their potentials for biogas production. They concluded that, with intensified urbanization and industrialization, the municipal solid waste will continue to grow and this can substantiate a production of 6.8 million m3 of biogas from fresh animal waste daily. This work also provided an overview of waste potential and energy generation from the waste but wasn’t able to statistically show the daily volume of waste generation at different regions and the biogas value of this waste. SELF organization
[16]
researched the potentials of Photovoltaic (PV) for distance villages
and showed that, the cost of PV electrification is less than getting power from the national grid due to the transmission distance to the villages from sub-stations. They further showed that PV require less operational expenses if adequate training is given to monitoring personnel. It can be the most reliable source of power due to; the huge expenses of running power generator, the availability of fuel at distant locations and the fluctuating nature of conventional fuel supply. They concluded that there should be assistance from multinational firm’s, non-governmental organization and government in order to enable the same project across other rural communities. This work is a tactical development to the demand of a rural area and it has the motive of making better living standards for rural areas. This was implemented and it worked perfectly. Works like this should be done across other parts of the country to enhance a significant impact of solar technologies in the nation, this has been able to accommodate the villagers’ basic needs but increase in electricity demands will be a detriment on the capacity of the solar PV. Sambo
[17]
evaluated the challenges for a sustainable energy production by using the
information sourced from International Energy Agency (IEA) to stipulate the need for a significant change on the energy production and concluded that, there is high energy
21
wastage in the country. The community relation problem in Niger-delta is also a major hindrance to development, the demand for power is growing while supply is reducing due to inefficient/old power plant. He recommended that, there should be emulation of the developed countries by having a national energy plan and energy laws to enhance socioeconomic development. Jekayinfa and Scholz [18.] carried out an assessment on the potential availability of selected residue from available energy crops for possible conversion into renewable energy as shown in appendix VII. It concluded that about 58 million tonnes of residue were available for use by 2004 which have the energy equivalent of 20.8 million tonnes of oil. They also projected the residue availability for 2010 to 80 million tonnes and concluded that when these residues are converted into usable energy, they could supplement fossil energy by 80%. Their work was streamlined to energy crops but until now, commercial implementation has not been done to put the work into practice. All the above lead to the initiation of this work to delineate the parameters for a sustainable and effective electricity generation, correlate the inter-dependency of all this parameters, identify all the necessary changes to facilitate growth in this sector and to cater for the needs of the growing population with her industrial and technological needs and provide a recommendation
1.4. Aims and Objective The aim of this project is the provision of adequate electricity to enhance growth and development across all sectors of the economy. The objective of this research is in view with the pressure on the nations needs for uninterrupted cheap electricity supply to enable the growth of industries, local businesses and a good development across all sectors.
Analyze the present generation of electricity and compare with the demand of the nation
Analyze the various shortcomings of electricity poverty in Nigeria in all the phases; generation, transmission, distribution-sales and consumption,
22
Analyze the costing required to invest in the acute power structure,
Discuss the ways of realizing a sustainable power generation scheme to enhance adequate supply with the available technologies.
Discuss the needs of mixed generation and the enabling policies.
1.5. Overview of Dissertation This chapter has been able to give an introduction and a purpose which necessitated this research. Chapter 2 will introduce the proposed concept of Embedded Power generation (EPG) and circumnavigate its operations. Chapter 3 will present the methodology used in this project and the result of the methodology. Chapter 4 will present an economic analysis of both conventional-Central Power Station and the EPG concept. Chapters 5 will discuss the necessary actions to be taken to achieve realities in the proposed concept. Chapter 6 will round up the project with a conclusion and a recommendation.
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2. EMBEDDED GENERATION As earlier discussed, the increasing gap between supply and demand continues to pose a threat to the life of the sector and a great challenge to Nigerians, as a whole. This threat has increased the percentage of the population on self generation using petrol and diesel generators, all of which are very expensive and very harmful to the environment. Traditionally, electric systems have been built with the Central Station Concept due to its economies of scale in power generation and cost consideration. The larger generators produce electric energy at a fraction of the cost of running smaller generators; the bigger it is, the greater the economics of power production. In recent years, for various reasons encapsulated in the need for growth and developments, the traditional economic margins between the large and small units have virtually reduced (19). Embedded generation (EG) could also be termed as distributed generation which involves electricity generation through different sources, i.e; gas, wind, biomass, oil, PV, small hydropower, e.t.c. which is directly connected to medium voltage distribution in a more decentralized supply pattern to the consumers rather than been on the transmission network (grid). This generation makes it possible to incorporate smaller plants of generation capacity below 50MW directly into the distribution network without connecting to the grid. EG, involves the use of small generators and storage power system, located on the utility system to provide adequate electricity according to demand and specification. It is constructed as stand-alone (isolated from the grid), and it is a recent development to help tackle the problem of power distribution and ease of maintenance. Chapter 1 has been able to analyze the potential of generating electricity through the various resources available in the country but until now, gas has been the major source of national generation. Historically, hydropower used to have the larger take on the supply network but many of the plant have been reported ineffective and working below expected capacity due to lack of maintenance.
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EG could be used by state or local government to generate electricity for private or commercial purpose, also by multinational companies and Independent Power Producers for industrial applications and commercial purpose respectively due to its medium capacity. This idea is urged by the need of adequate supply of electricity which technically appears too large for the public sector to handle. EG could be classified into two major topics according to its application; Traditional (convention) power generation
Low head hydro
Combined cycle turbine
Combustion turbine
Diesel generators
Co-generation units
Renewable Energy power generation (future use)
Fuel cell
Hybrid system
Tidal power
Ocean gradient
Wind
Solar thermal
Biomass
Geothermal
Photovoltaic’s
The above classification has various relationships and differences which make them fit for Nigerian scenario. Both conventional and non-conventional could be used for;
25
Standby or emergency power generation,
Independent Power Producers (IPP)
Hybrid systems,
Dispersed storage and generation,
Dispersed energy system, e.t.c.
2.1. Current Available Technologies in Nigeria Commercial electricity in Nigeria has been generated using coal, hydro and gas respectively according to their age. The electricity produced has been distributed unevenly amongst the population and cities due to demands management and revenue consideration. For most of the populace who lives in the rural area, the available source of energy to them is the biomass and traditional lanterns. This reduces the chance for developments and enhances a vitalized environment for spreading of diseases as health technology can’t be positively driven without electricity. The urban areas also lack adequate and quality electricity supply which aided the paralysis of several businesses and increased the market value of various commodities. The existing technologies used for commercial deployment are summarized in the table 2 below.
26
Table 2: Existing power generation capacity in Nigeria (20) S/
Power
N
location
station/ Plant type
Year
of Installed
commissionin
capacity
g
(MW)
Installed
Units
units
available
1
Lagos station - Egbin
Thermal
1984, 1987
1320
6
4
2
Sapele station @ Ogorode, Delta
Thermal
1978 , 1990
1020
10
1
3
Egbin AES, Lagos
Thermal
2003
170
9
9
4
Afam
Thermal
1975 , 1982
710
20
3
1978
60
3
2
(gas) 6
Ijora Station Lagos
Thermal (gas)
7
Lagos IPP (Enron/AES) Egbin
Thermal
2003
170
9
9
8
Oji
Thermal
1956
30
-
None
832
18
12
1976, 760
8
6
(coal) 9
Delta TV @ Ughelli
Thermal
1966, 1990
10
Kainji
Hydro
1968, 1978
11
Jebba
Hydro
1986
540
6
6
12
Shiroro
Hydro
1990
600
4
2
6212
94
54
TOTAL
From table 2; In 2004, there is a total of 94 installed units with 6212MW installed capacity, 68.9% thermal, 30.59% hydro and <1% coal (now abandoned due to age). However, due to lack of maintenance and funding in the power sector, the working units have been reduced to 54 units which are 57.5% of the actual installed units.
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Recently the lack of adequate supply made the populace source for self generation. This has been done with the help of power generators with capacity ranging between 2.5-500KVA. These generators uses petrol or diesel as their fuel and are very inefficient, expensive and highly emissive constituting noise and air pollution to the prevailing unclean environment. A newspaper blog reported recently that, over 60million Nigerians now own a generator (21) which makes the generator industry better than the television industry. Renewable technologies are available but have not been commercially deployed; it is still in the research stage. Some of the technologies have been proven but the future of renewable in the country is bleak irrespective of its potential because the present energy policy doesn’t by anyway encourage or actually enforce sustainability.
2.2. Recent Advancement, Research and Development With reference to the prevailing situation, the government has decided to rescue the almost dead power sector which could lead to the paralysis of the economy by establishing a mandate through the federal constitution Act No. 62 of 1979, as amended by Act No. 32 of 1988 and Act No. 19 of 1989, with the statutory mandate for the field of energy in all its ramifications. The established bodies in the process of deregulation include;
Energy Commission of Nigeria (ECN); mandated to carry out overall energy sector planning and policy implementation, promote the diversification of the energy resources through the development and optimal utilization of all, including the introduction of new and alternative Energy resources like Solar, Wind, Biomass and Nuclear Energy.
National Electricity Regulatory Commission (NERC); mandated to enable uninterrupted electricity supply, fluidize private sector participation, ascertain consumer protection and a general fair regulation.
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Wholesale Electricity Market (WEM); creation of a competitive market for distribution companies to source for electricity from any of the available generating market.
Rural Electrification; unbundling agency to manage the rural electrification funds, with the objective of expanding access to electricity in rural communities.
Independent Power Producers (IPP); facilitating private companies to enable power production through their generating plants and enter into bilateral agreements with preferred customers or distribution companies.
As a popular saying-“what can’t be measured can’t be managed’. This has further helped to measure the energy demand and strategies of supply by collaborating with the International Atomic Energy Agency (IAEA) for a 30years planning period. This measure employed the IAEA modeling tool;
Model for the Analysis of Energy Demand (MAED)
Model for the Energy Supply Strategy Alternatives and their General Environmental Impact (MESSAGE).
The result enhanced incorporating private companies into the power sector through the privatization program to qualitatively supplement the capacity of the present generation and supply of electricity that the country craves for. In regards to this, several groups, companies, bodies, state government have attempted to implement project in the past to reduce the problem of inadequacy but most of their impact haven’t been visible due to the great gap between the present demand and supply. Also 98% of commissioned and proposed projects have not been able to address sustainability, but their main goal is adequate and reliable supply which is still a reality of decades ahead with regards to the present pace of growth. This dissertation aims at providing adequate and sustainable electricity supply through EG in a decentralized pattern to be able to; harness energy potential of different sources at different locations, reduce the losses during transmission, reduced cost of connection, enhance greater market and competition, and opportunities for private and local/state
29
government participation. This will open the market for indigenous and foreign investors to utilize its assets and benefit hugely from the relatively untapped market while the populace will get adequate supply and lower tariffs from the competitive market, also greater employment opportunity and the dream of industrialization can be brought alive. The summary of the reason for the privatization acts are enlisted below;
Sustainability
Inadequacy and quality of supply
Wastage
Environmental impact
Poverty
Economic decline
Lack of accountability and good management
In view of the situation of the country, the potential problems will be discussed and then, the subsequent chapters will economically analyze a preferred solution to the present structure.
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3. PROBLEMS OF ELECTRICITY IN NIGERIA In an attempt to decipher the problems of electricity supply inadequacy in the nation, interviews were carried out to research and ascertain the main problems in the industry and how they affects the country across all sectors. The area of focus included industrialization, electricity usage, economic growth, environment sustainability, and barriers to development. After several telephone and one on one interview from government representatives, private organization and various individuals across different sectors, responses could be summarized as; Generation-Supply incapacity National policy Management and corruption issues Inaccurate data The above enlisted problems have unarguable been seeking amendment through the cry of the people but each point is deepened and cannot be tackled from the surface; there is need for reforms in different departments, responsible for managing the above problems by using different strategic tools.
3.1. Generation-Supply Incapacity This was tackled by most government representative in a forum discussion. It was stressed that the people are expecting the government to provide adequate electricity supply which isn’t disputed as the government responsibility. They said effort have been concentrated on this in recent years, unfortunately the actions hasn’t been evident due to sabotage of government effort and the deepened network problems. Their problem was analyzed subjectively in the various phases of generation-supply as discussed below.
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3.1.1. Generation It was stated that, the total installed capacity of the current generating plants is 7876MW including IPP generation but, the available capacity is less than 4000MW as at December 2009. There are fourteen generating stations and seven of them are old enough to be overhauled which generate an average daily capacity of 2700MW which is far below the initial peak load forecast of 8900MW for the existing infrastructure. This resulted to load shedding as a solution to help distribute electricity to all parts of the country. The problems are summarized below;
Insufficient funding of the station to aid maintenance.
Lack of adequate human power and experienced personnel to handle and operate the stations.
Old equipment and facilities to enable efficient and effective generation.
Concentration on few sources of energy for electricity generation
Inadequate capacity
Sabotage of government efforts
The above listed points have been summarized from the analysis from government representatives. It is clear that there is lack of funding in the power sector as the present capacity of the nation is far below the present demand of the nation. This resulted to the problem the nation is facing now. Figure 2 shows the electricity generation in Nigeria putting into consideration the installed capacity and the total generation.
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Figure 2: Electricity generation in Nigeria from 1970 – 2005 (22)
Figure 2 shows the gap between the installed capacity and the total generation. This is as a result of the old plants which are still in use. Most likely, greater amount of energy is used to power the old generating plants and a given lower output than its installation state due to drop in efficiency and lack of maintenance. Some professionals proved that efficiency of these plants sometimes dropped by 60% depending on the state of the plant. Mr. Mohammed of the Energy Commission of Nigeria (ECN) discussed at length on the effort of the commission to put online some new generation plants with the institutionalized IPP, to enable abundance and quality electricity. He also said that, the problem at hand now encompasses all the phases of production to consumption and more effort will be focused on the transmission, distribution and marketing of electricity to create a conducive atmosphere for investors, ease discharge of their objectives, and enable them recoup interest on investment. The summarized future generation capacity of Nigeria is in appendix I. Appendix I shows the proposed power generation plan for the adequate supply of electricity. We can conclude that, the plan is just to supplement the present energy generation capacity but the problem of sustainability has been postponed to the future
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with reflections of present action. Hydro-generation takes a share of 19.84% of the proposed generation plan and 80.16% goes to thermal. From the share potentials of energy resources available in the country (table 1), we know gas is abundant in the country likewise other resources, so this doesn’t give gas an edge in utilization or to forego other potential resources as this sums up to wastage of resources. Environmental concern and laws has been gaining acceptance across developed nation but until now it hasn’t been trending in Nigeria. Knowing this, any project that involves the environment and has a life extending into the future should put sustainability into consideration. Gas is accepted to be partly clean for generating electricity in terms of its pollution level but it’s not as clean as renewable energy thus there is room for mixed generation due to the energy resources available in the country.
3.1.2. Transmission Technically, the problem of transmission has only been identified by the people in the engineering department who are exposed to core activities which involves installing transmission lines. Transmission loses over long distances have been estimated to be 8.05% of the total electricity production compared to the 6-7% of the developed world. The issues of transmission cannot be ignored as the proposed generating plant needs transmission medium to effectively convey its power. Mr. Olubunmi Obajuluwa of Power Holding Company of Nigeria (PHCN) expressed the need of replacing the old transmission lines as the capacity and efficiency of transmission has reduced over the years due to heating and overloading, and most likely quality materials were not used at the time of construction, and there wasn’t any monitoring agency to verify that on behalf of the government. This increased loss of voltage during transmission. He also stressed that government properties haven’t been secured enough because, there have been reported cases of destruction and theft of public infrastructures in new sites before decommissioning.
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Another Engr. Abdul of Energy Commission of Nigeria said the transmission system doesn’t cover all part of the country-the maximum current capacity is 4,000MW and also summarized other problems as;
Overloading of transformers in service areas,
Lack of development in the sector to implement modern technologies for communication and monitoring,
Vandalization of lines associated with lack of surveillance on electrical infrastructure,
Lack of fund to regularly expand, update, modernize, and maintain the network as a result of resource allocation,
It covers only the major parts of the country,
Inadequate tools and attendant/staffs for urgent maintenance,
Long process of funds allocation to maintenance needs,
Lack of technical know-how to implement the maintenance needs.
3.1.3. Distribution & Marketing The problems of generation and transmission have been analyzed and the major hindrances have been considered, it is fair to say present problem would exact an equal reaction on the distribution network coupled with some marketing problems. Thus, we can have a full problem profile of distribution and marketing. I spoke with the several representatives of PHCN marketers and they all have a wide range of problems which need to be tackled to stabilize the situation. The problems spanned across the problems of generation and transmission and categorically stated that, many of the aggrieved customers have displaced their grievance on their staffs as a result of inefficiency in the generation and transmission stages. This problem faced across all states in Nigeria mostly lead to their inability to perform. Like the popular saying “to whom much is given, much is expected”, many of the populace expect constant supply from the government and the only people to display their aggression with are the marketers. Some great clash has been
35
recorded in several states of staffs been maltreated, beaten, injured and sometimes killed in the events of carrying out their jobs. The problems were summarized thus,
Weak and inadequate network coverage,
Insufficient fund for mobilization and implementing task,
Poor billing system,
Inadequate logistics facilities (tools and vehicles),
Fraudulent practices by staff and very poor customer relations,
Low staff morale and lack of regular training,
Lack of access to remote places in the distribution plan.
Figure 3 below shows the transmission and distribution losses over the years due to lack of maintenance coupled with the incompetent installed infrastructure to utilize the total generation capacity.
Figure 3: Transmission and Distribution in Nigeria (23)
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3.1.4. Consumption This is virtually the end of the whole needs for generation. Electricity is a vital part of development and human life but till now people have failed to respect its usage as a result of many factors. Nigeria haven’t been able to generate enough to meet its demands thus, a lot of regulations cannot be implemented on the needs to avoid wastage. Wastage has been recorded high in various part of the country as a result of improper billing system and low tariff on electricity aside the technical loses experienced. The government has subsidized electricity to the extent that, a continuous subsidy will possibly affect other sectors of the economy. A group discussion between Nigerian living in western countries has shown that, the attitude of fresh Nigerian immigrant towards electricity consumption tends to be wasteful; they tend not to know the value of electricity by consuming electricity wastefully and unknowingly. This is as a result of inaccurate billing; they have not been billed according to their usage (fixed/ estimated billing system), no matter their consumption. This differentiates them from people living in a technological-driven world where billing is based on consumption coupled with service delivery to satisfy the customer’s needs. On the contrary, some electricity customers also said that, they won’t pay for electricity even if its available and referenced that; they provide all the basic amenities by themselves and they haven’t got a reason to uphold and hail their citizenry; they provide water for their homes, generate electricity by themselves, self-construction of roads and drainages to mention a few. The summarized problems are,
Inaccurate billing system,
Old system of electricity distribution and monitoring,
Acute demand-supply level,
Increasing poverty level of the country,
Lack of education on the real value of electricity supply and,
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The negative populace attitude towards electricity consumption.
Figure 4 shows the consumption of electricity according to sectors, this further interprets that electricity wastage is high in residential as it accounts for the largest consumption. As a result, it’s the same people that consumes electricity in residential building, goes to offices and industries to apply the same wasteful orientation which makes them utilize full load demand at other places which has an equal effect on the distribution network. The demand load increases and this weakens and sometimes leads to burnout of some electrical infrastructures. In view of several burnouts, it’s not advisable for continuous replacement by the government if the situation remains the same and the consumer’s remains unconscious of energy usage.
Figure 4: Electricity consumption in Nigeria by sectors (22)
Mr. Kamal Habib of the Ministry of Budget and Planning stated that, the population growth of the country can’t be under-estimated with its present population of over 150million and
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has 70% of its population to be under the age of 30years and 47% are ladies willing and able to make their own family. He analyzed that; each of the ladies will virtually give birth to an average of three kids which will put the population of the country in the next decade close to 340 million. This will put the country as the most populous black nation with great population density, and with its present ill-economic growth and lack of planning, it could be the most poverty driven nation in coming years. He stressed the need of the country to encourage greater and strong planning network for all sectors with the implementation of rigid laws and strategized approach to enable the citizen have confidence in the government and future of the nation. From the above outcomes from the interview with different people that are relevant to this research, it is fair to summarize the most critical issues facing the power industry into the subtopics of generation, transmission, distribution, and consumption attitudes. This could be linked together in a cyclical orientation as represented in figure 5
Figure 5: Relationship of generation, transmission, distribution, and consumption pattern in Nigeria Figure 5 shows that all the processes dependent on one another. A given scenario is the epileptic generation problem as a result of lack of funding and other criteria explained
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above, this inevitably reduces the capacity of transmission coupled with poor transmission facilities and other related problems; a resulting lesser voltage to be distributed. The insufficient distributed voltage leads to a poor marketing ability based on inefficient service and therefore a low revenue generation. The actual consumption is not billed accurately and the customers are not keen on knowing the nature of their bills as a result of fluctuating and unreliable electricity sector and also, most customers are on self electricity generation. This will affect the response of the customers to bill payments and then low revenue will be generated. Thus, yearly accounting analysis sums up to great loses for the power sector irrespective of its subsidies and then the effects goes on and on which finally leads to damage of major infrastructure with no regular maintenance.
3.2. National Policy The legal policies of the country has encouraged electricity generation through all available potentials but it doesn’t enforce sustainability which is the only edge renewable technology has got over conventional technology outside economics. The summary of the main points of the regulation mandated through the NERC are;
create, promote and preserve efficient industry and market structures, and to ensure the optimal utilization of resources for the provision of electricity services;
maximize access to electricity services, by promoting and facilitating consumer connections to distribution systems in both rural and urban areas;
ensure that an adequate supply of electricity is available to consumers;
ensure that the prices charged by licensees are fair to consumers and are sufficient to allow the licensees to finance their activities and to allow for reasonable earnings for efficient operations;
ensure the safety, security, reliability, and quality of service in the production and delivery of electricity to consumers; and
ensure that regulation is fair and balanced for licensees, consumers, investors, and other stakeholders.
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Considering the above statements, various progresses have been made by the NERC on implementing strategic project to enhance development in the power industry but the sector has not been liberalized to enhance competition in its real sense. Many of the projects and licenses are awarded not based on merit of the awardees, and policies aren’t rigid enough to deal with defaulters. There is also need for national energy master-plan that would efficiently manage each parts of the nation effectively by enhancing and empowering states and local government into full time independent energy producers and marketers if they so wish. The problem of fuel sourcing should also be backed legally to avoid the fluctuation in energy production as major consumers like power station wouldn’t for any reason source operation-fuel from the black market. The institutionalization of renewable energy funds which will help promote local manufacturers, suppliers, and renewable energy users through incentives should be considered in energy policies. 3.3. Management and Corruption Issues This is the major of any organization and the government has suffered from this issue as most of the workers aren’t dedicated to doing their jobs in the right way. Many factors are responsible for this due to the country planning and organization pattern. It includes but not limited to;
inconsistence in salary packages:
greed
monitoring and auditing issues
leadership qualities and characters
The workers have complained that the take home packages have not encouraged them to devote all their abilities into the job as most of them have to look for additional jobs to supplement their income and meet up with expenses they spend on the government job. Also inflation occurs several times in a year but, there hardly have a salary review in four years. Also some workers complained of salary delays for weeks after due time.
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Greed is generally accepted to be ruining the state of economy in the country which occurs deep into the system of governance and attempt to tackle it hasn’t yielded any positive result; thus younger generation are capitalizing on its continuity. The issues of monitoring and auditing hasn’t been tackled at all, no agency is responsible for auditing or monitoring the potential problems and therefore create a complex scenario after the situation has been abandoned for long. Most of the projects awarded are not monitored and then a failed result will be the output
3.4. Inaccurate Data This problem cuts across all sectors of the economy. The provision of adequate electricity for the nation need some basic data like the actual population count which shouldn’t be politically influenced, the present generation, transmission and distribution capacity, the structural capability of the environment compared to its actual demands and needs, e.t.c. Most part of the nation is agreed to be under the rural communities and even the Local Governments managing their environment is yet to include them on their planning map or have a detailed statistics about them, how then would the State and Federal Government access genuine information of these localities. This leads to inadequate provision for them since the present amenities are only for the urban areas where records are known. Historically, most estimate done to excess or surplus the actual budget in order to incorporate un-recorded statistics have been falsified mostly due to under-estimation. This shows that, the unrecorded values of any parameter in the country is greater than the recorded value, thus any forecast based on inaccurate data will give an unrealistic future.
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4. ECONOMIC ANALYSIS OF EMBEDDED POWER GENERATION (EPG). As explained in earlier chapters, the urgent need for adequate electricity is the status of Nigeria but, when structuring a solution, a lot of parameters need to be considered to avoid implementing project that might be termed wasteful, uneconomical or unsustainable in the nearest future. As a result of this, this chapter compares the proposed concept-Embedded Power Generation (EPG) and the conventional concept-Central Plant System (CPS) under economic and sustainable parameters to realize an ideal option for future electricity. To do justice to the framework of this dissertation, all parameters have to be considered to enable an effective performance of an ideal solution. These sums up to major parameters for comparison of the two concepts as; Emission, Cost of technology;
Capital cost, Operation and maintenance
Cost of per kWh
Technical and non technical loses, Distribution and coverage, Efficiency (sustainability), Environmental impact. In view of these parameters, a summary will be extracted from the characteristic of the two concepts. This is to present their potential effectiveness towards electricity structuring and distribution in Nigeria.
4.1. Emission This occurs as a result of the combustion of fuel in the power industry. Emission is a very important factor when considering sustainability, thus energy and carbon conversion is helpful to calculate the energy values in different units and its equivalent emission factor of
43
different fuel sources. The table 4 below shows the summary sourced from Department for Environment, Food and Rural Affairs (DEFRA)-carbon trust. Table 3: Emission conversion FUEL
UNITS
Kg CO2 /unit
Grid electricity
KWh
0.537
Renewable electricity
KWh
0
Natural gas
KWh
0.185
Therms
5.421
KWh
0.214
Therms
6.277
Litres
1.495
Tonnes
3,190
KWh
0.252
Tonnes
2.674
Tonnes
3,223
KWh
0.268
Tonnes
3,150
KWh
0.245
Tonnes
3,164
KWh
0.250
Litres
2.630
Tonnes
3,135
KWh
0.240
Litres
2.315
Tonnes
2,457
KWh
0.330
Tonnes
132
KWh
0.025
LPG
Gas oil
Fuel oil Burning oil Diesel
Petrol
Industrial coal Wood pellets
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Having these values, it very easy to delineate the values of the carbon dioxide emitted from the various technologies which is planned for electricity generation process. According to appendix I, it shows a proposed plan of generating 17,887MW of electricity of which 80.16% is thermal (gas), and 19.84% hydropower. This gives us 14,338MW electricity from gas and 3,549MW of hydropower, Statistical representation: For gas; 14338MW
= (14338 x 8760hours)
125.6 x 106MWh 125.6 x 109kWh 23.24 x 109Kg CO2
= 125.6 x 106MWh = 125.6 x 109kWh
= (125.6 x 109 x 0.185)
= 23.24 x 109Kg CO2
=23.94 x 106 tonnes of CO2 Annually
For hydropower; 3,549MW
= 0Kg CO2 Annually
For EPG, which could use renewable energy or conventional fuel, the emission is zero for renewable as seen with hydropower or other renewable sources and a measurable volume with regards to the fuel technology used. In Nigeria, the present forms of embedded generation available are PV, diesel, and petrol generators which are widely distributed in the cities and sparsely available in the rural area. Availability of petrol and diesel generators is due to cost of operating and availability of fuel in a close distances. These generators are highly inefficient due to their standards and produces greater emission. The smaller ones have a life span of 18months and the larger ones could work efficiently for 5years depending on its originality and maintenance.
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Statistical representation of diesel and petrol generators: Diesel generator; 1 litre of diesel
= 10.9kWh
10.9kWh of diesel (10.9kWh 0.250) 2.725kgCO2 per litre 10.9kWh of diesel
= (10.9kWh x 0.250)
= 2.725Kg CO2 per litre
Petrol generators; 1 litre of petrol 9.6kWh of petrol
= 9.6kWh = (9.6kWh x 0.240)
= 2.3Kg CO2 per litre
Note: the emission standards all depends on the condition of the generators, capacity factor, load factor and efficiency. The above calculation has been done based on a new generator with efficiency of 90%, capacity factor 0.85 and operating under the load capacity. As earlier stated in previous chapter, an estimate of 60million Nigerian uses generators for self power generation. Another newspaper blog says “Nigerian using generators consumes an average of four litres of fuel per day for electricity purpose” (24). It we assumed that, the minimum emissive fuel type is used for the generator which is petrol. Statistical representation: 60million x 4 litres 240 x 106 litres 240 x 106 litres
= 240 x 106 litres = (240 x 106 litres x 9.6)
= 2304 x 106 kWh/day = 552 x 106Kg of CO2 daily
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The above statistics clearly shows that, the minimum inevitable emission is 552,000 tonnes of CO2 daily. Its is clear that embedded self generation from petrol and diesel is not in anyway good for the environment, as other sources of pollution like transportation which produces a greater amount of greenhouse gases to the environment is also of major concern. Thus any attempt to implement an energy intensive project, the emission potentials of the project should be considered. From table 4, we can conclude that, natural gas is the cleanest non-renewable energy due its low emission level, and the proposed power plants will be fueled by natural gas. Unfortunately, the huge investment required to build infrastructure such as gas pipelines for an enabling environment is a barrier that’s yet to be crossed. Also, natural gas could be highly abundant in the country but, parameters such as local fuel security and vandalism of government properties which could suspend the operation of the stations should be considered which continues to pose a threat to the Nigerian oil industry, irrespective of its abundance. It is also clear from earlier analysis in table 1 that the abundance of resources in Nigeria creates an open option for mixed-generation. Any of these resources could be tapped to enhance mixed-generation, avoid wastage of natural gas and enhance fuel security for the future of the power industry.
4.2. Cost of Technology This section compares both concept of EPG and CPS and discusses which is economically viable per kWh or MWh of electricity produced. It shows cost comparison of the two concepts under the different possible fuel technologies with references to; Capital cost, operation and maintenance Cost of per kWh 4.2.1. Capital cost, operation and maintenance To analyze this part with the various fuel technologies available, we have to consider the costing necessary for generation, transmission and distribution. We have to take note that the cost incurred for transmission could vary depending on;
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the style or technology adapted in the project,
the voltage to be transmitted and also
the terrain over which transmission companies build transmission lines also affects cost, e.g. mountainous terrain far from roads and relatively flat plains with nearby roads.
Thus, an assumption will be made from the National Association of Regulatory Utility Commission (NARUC) in the United States of America. The NARUC stated according to estimates from various project that, the cost of transmission ranges from $US 0.5– 1.5million per mile (25). It is generally accepted that the capital cost for electricity production varies with the type of fuel technology and the types of plant, so the various expenses to be incurred in generating a MWh of electricity through different technologies according to the United States Department of Energy (DOE) is represented in Appendix II. Appendix II, represents the cost for conventional plant system, thus if we assume that there is no other variable or changes that is meant to occur with costing for the EPG except for cost of transmission which is zero, then a resulting difference of just the transmission cost will be represented in the table 5
Table 4: Cost comparison between CSP and EPG Plant Type
Total System Levelized Cost $/megawatt-hour CSP
EPG = CSP – Transmission Investment
Conventional coal
94.8
93.6
Advanced coal
109.4
108.2
Advanced coal with CCS
136.2
135.0
66.1
64.9
Natural gas-fired
Conventional
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combined cycle
Advanced combined 63.1
61.9
cycle
Advanced
CC
with 89.3
88.1
CCS 124.5
121.0
103.5
100.0
Advanced nuclear
113.9
112.9
Wind
97.0
93.5
Wind- Offshore
243.2
237.3
Solar PV1
210.7
206.7
Solar thermal
311.8
306.0
Geothermal
101.7
100.7
Biomass
112.5
111.2
Hydro
86.4
84.5
Conventional combustion turbine
Advanced combustion turbine
Table 5 could be represented in a chat to graphically compare the differences.
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$350.00 $300.00 $250.00 $200.00 $150.00 CSP
$100.00
EPG = CSP – Transmission Investment
$50.00 $0.00
Figure 6: Costing per MWh of electricity produced from different plant types ($/MWh)
From the above charts and figures from the tables, it is clear that, EPG is a better option when economic costing is considered as the single parameter for project choice and implementation.
4.2.2. Costing per kWh The analysis in Table 6 shows the variation in the cost of different fuel technologies adapted from the Canadian Energy Research Institute (CERI). This assumption is made to suite Nigeria as there aren’t any available details for the costing per kilowatt of electricity produced in Nigeria.
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Table 5: Technology costing per kWh TECHNOLOGY
COST
PER
KWh COST PER KWh (Nigerian
(Canadian cent)
Naira)
Coal
5
7.9
Gas
9
14.22
Biomass
8
12.64
Biomass co-firing
11
17.38
Micro hydro
27
42.66
Small hydro
19
30
Large hydro
10
15.8
Solar PV
79
124.84
Solar thermal
35
55.31
Wind
11
17.38
*exchange rate was adapted from www.xe.com which evaluates 1cent as 1.58naira (July 2011). The above table is interpreted into a chart as shown below
NGN 140.00 NGN 120.00 NGN 100.00 NGN 80.00 NGN 60.00 NGN 40.00 NGN 20.00 NGN 0.00
Figure 7: Cost per kWh (Nigerian naira)
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Solar PV is the most expensive technology to generate electricity as shown by figure 7. It should be emphasized that as much as solar intensity is very much available in the northern part of the country, the technology is still very much in its infancy and there are ongoing research as to reduction in the price of the panel and increase in the conversion efficiency. The cheapest technology is the coal followed by biomass and then the most utilized in Nigeria which is thermal (Gas). Other technologies also could be harnessed but they have not been incorporated due to strategic difficulties in managing and operating them while most renewable technology hasn’t been applied fully as a result of the intermittency and historic uncertainty.
4.3. Technical and non-technical loses This helps to compare the technical and non-technical loses associated with both concepts of CPG and EPG. The table below shows the proposed plan of power generation with its present loses and a projected reduction in loses for the upcoming years by the NERC and the power planning committee.
Table 6: Effect of transmission and distribution loses with projection plan (central stations) Description
2011
2012
Out-going power(GWh)
97,131
109,272 115,829 122,778
130,145
Transmission loses
8.05%
8.05%
8.05%
Delivered to distribution(GWh)
89,312
100,476 106,504 112,895
119,668
Distribution loses
11%
11%
10%
10%
10%
Delivered to customers(GWh)
79,488
89,423
86,269
93,477
101,239
Non technical loses
14%
12%
10%
8%
6%
Billed to customers
68,359
78,693
86,269
93,477
101.239
Revenue collection loses
8%
6%
4%
2%
2%
73,971
82,818
91,607
99,215
Sales where revenue is collected 62,891
2013 8.05%
2014 8.05%
2015
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(GWh) Revenue based sales as % of out- 65%
68%
72%
75%
76%
going
The present transmission loses in Nigeria from the grid is a constant 8.05% of the outgoing power from the central station, other loses recorded presently are the distribution loses, non-technical loses, and revenue collection loses all of which are projected to reduce as the year goes by with more effective management. From table 6, the percentage revenue of the outgoing power from a central station is 65% for 2011 and 76% to be expected in 2015 considering greater management efforts across all phases of electricity generation to consumption. The next table shows a scenario of the losses that could be encountered from embedded power generation using the same power generation techniques with the same power output for the present and upcoming years ahead.
Table 7: Effect of transmission and distribution loses with projection plan (Embedded Generation) Conventional Embedded Generation Plant Description
2011
2012
2013
Out-going power(GWh)
97,131
109,272 115,829 122,778
130,145
Transmission loses
8.05%
-
-
-
2014 -
2015
Delivered to distribution(GWh) 89,312
109,272 115,829 122,778
130,145
Distribution loses
11%
7.33%
4.33%
Delivered to customers(GWh)
79,488
101,262 108,497 109,655
124,510
Non technical loses
14%
7%
5%
1%
Billed to customers
68,359
94,174
103,072 106,366
123,265
Revenue collection loses
8%
5%
4%
2%
6.33%
5.33% 3% 3%
53
Sales
where
revenue
is 62,891
89,465
98,949
103,175
120,800
82%
85.4%
89%
93%
collected (GWh) Revenue based sales as % of 65% out-going *note; 2011, is the baseline for the calculation and the projection is made from 2012 for EPG. From tables 7 & 8, we could extract the revenue generated from both concepts as a product of their encountered loses and simplify it into a table of revenue as shown below. Table 8: Comparison Revenue Sales between Both Concepts; CPS and EPG YEAR
CPS
EPG
Sales where revenue is collected Revenue based sales as % of out-going Sales where revenue is collected Revenue based sales as % of out-going
2011 2012 2013 2014 2015 62,891 73,971 82,818 91,607 99,215 65%
68%
72%
75%
76%
62,891
89,465
98,949
103,175
120,800
65%
82%
85.4%
89%
93%
54
100.0% 95.0% 90.0% 85.0% 80.0% CP
75.0%
EG
70.0% 65.0% 60.0% 55.0% 50.0% 2010.5 2011 2011.5 2012 2012.5 2013 2013.5 2014 2014.5 2015 2015.5
Figure 8: Comparison Revenue Sales between Both Concepts-CP and EG From the chart, it is clear that EG has a reduced loses encountered in the medium of electricity production to consumption and therefore a greater revenue due to its smaller size, easier management and low maintenance requirement depending on the size of the plant.
55
4.4. Distribution and adequacy This part of the analysis helps to measure the extent of coverage between the traditional CPS and the proposed EPG concept as a product of the historical relevance in Nigeria. The numbers of people that benefits from the central station might be estimated huge but as a matter of fact the grid supply electricity to approximately 4.7million customers which is generated from central power station as at 2009
(26).
These numbers could be further
analyzed by comparing it with the demand of the business centre of Nigeria which is Lagos state. The Governor of Lagos State in his annual economic briefing stated that; “Lagos has approximately 4million homes and each home accommodates an average of four people, this puts the total number of its occupant to 16million people”. Thus, we could assume that, the numbers of people that benefits from the electricity supply of the whole nation is optimally 20million people including ghost consumers (people who don’t pay for electricity and their usage isn’t recorded). However, as earlier introduced in chapter one that, most of the populace inhibits the rural environment, and the inadequacy of electricity produced from the generation station and economics of revenue generation makes it impossible and uneconomical to supply electricity to the rural communities; if electricity infrastructures are extended into the rural area, the expected revenue wont be achieved due to the poverty level and unemployment rate. Thus the load and revenue managers prefer to distribute to cities where greater sales could be achieved so as to meet their revenue target. The PHCN also complimented this and stated in the last consumer protection forum that; the cities are responsible for 90% of their revenue irrespective of its undercharged electricity prices and most of the power supplied to the rural communities is mostly lost as revenue collection hasn’t been an easy task. This statement could be backed by the load management scheme which made Lagos State benefit 1000MW from the staggering 4000MW national capacity. Funds secured through electricity sales is also less than the cost of generating electricity and the government has been subsidizing the cost of electricity over the years but the
56
inconsistency in subsidy keeps the IPPs running a negative account and also scares potential investors. All the above issues and concerns are due to the problem associated with central station and the way the sector has been managed over the years. Thus, EPG could be a better alternative for power generation if it could be available in all communities or in all the 776 Local Government to produce electricity according to their needs and tapping from the available resources within 20-50Kilometers circumference distances around their environment. This concept is sure to provide the country with easy access to electricity and greater coverage of the rural areas. Greater revenue could be generated as microgeneration could be easily monitored, therefore, marketing activities could be directed to target customers and management streamlined to plant capacities. The EPG structure could also be likened to that of the rural water supply in Nigeria. Historically, the central water distribution plan doesn’t reach the rural communities due to discontinuity in the infrastructural project or sometimes due to shortage in water level from the District Water Corporation or sometimes distance of travel or sometimes no electricity to power the pumps, or pressure drop encountered due to pipeline leakages which aren’t monitored. Since huge funding is necessary to implement major projects, Local and State Government have resulted to financing micro project that will effectively cater for the small communities and reduce their inaccessibility to basic amenities. Water supply has been made available to them in varieties of ways, ranging from the hand powered surfaced water pumps to a submersible pump depending on electricity availability in the different regions. This project might not have helped so much due to the quantity decommissioned but it has greatly helped the rural communities have access to quality and clean underground water. From the above discussion, the distributed concept has worked for water supply, it could also be applied to electricity supply to shed load pressure off the national grid, provide basic electricity supply for the needs of the villages and communities, help Local and State Government to cater for domestic loads and increase value and quality of life.
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Efficiency (sustainability)
This is the measure of the competency of performance of a system or concept as regards this dissertation. The efficiency of the two concept of electricity generation discussed in this book could be estimated from the different stages of electricity production to consumption. Several losses are measure at different stages according to table 7 & 8, EPG concept increases the efficiency of the power that gets to the consumer by reducing loses incurred during distribution, minimize cost of transmission and distribution, eliminating bulk cost of transmission, reduces the non-technical loses, and increases the access of effective power audit and management due to its small sizing.
4.5. Environmental impact This section compares both concept as earlier introduced as regards their impact and risk assesment on the environment. This will be represented comprehensively in table 9 and all the criteria percieved to be necessary is shown below.
Table 9: Potential impacts for CPS and EPG Parameters Description
Concept Geographical
Inpact
Nature Significane
Adverse
Lt, IR
Major
importance I N R D L Human
Disturbance
beigns
to
existing
CPS
*
EPG
*
Normal
Lt, R
Minor
Noise
and CPS
*
Adverse
Lt, IR
Major
traffic
EPG
Normal
St, R
Minor
Health
and CPS
*
Adverse
Lt,IR,R
Major
safety
EPG
*
Adverse
Lt, R
Minor
properties
*
58
Flora
and Loss of grass CPS
fauna
land
Adverse
Lt, IR
Major
Normal
Lt, IR
Minor
Beneficial Lt, IR
Major
Beneficial St, IR
Minor
Normal
Lt,!R
Major
Adverse
Lt, IR
Major
Adverse
Lt, IR
Major
Adverse
Lt, IR
Minor
Adverse
Lt, R
Adverse
Lt, R
of
conservation value Creation
*
EPG
of CPS
* *
new habitat EPG Aesthetics
CPS
* *
EPG Soil
and Loss of great CPS
geology
*
agricutural soil
Water
*
EPG
Reduction in CPS
* *
groundwater discharge
Keys:
EPG
*
Minor
I=INTERNATIONAL, N= NATIONAL, D= DISTRICT, R= REGIONAL, L= LOCAL St=SHOR TERM, Lt= LONG TERM, IR=IRREVERSIBLE, R=REVERSIBLE CPS= CENTRAL POWER STATION, EPG= EMBEDDED POWER GENERATION
From the overall potentials considered in the above table, it is clear that the negative potential impact which arises from a CPS is greater than that of the EPG. Noise is dependant on the type of fuel technology applied in the EPG. If renewable energy is utilized, then EPG stand a better point with noise emission but if otherwise, then noise is surely a problem of great consideration in locating the operating plants. The only clear considerable impact from the EPG is the aesthetics. EPG will affect the beauty of the environment and possibly affect serenity. Modern architectural designs could be applied if EPG is to be considered a preferred option.
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From all that has been explained from the beginning of this chapter, we have been able to measure the characteristics of CPS and EPG against parameters like; emission, cost, adequacy, efficiency and lastly the environmental impact, thus we have qualitatively seen reasons why EPG concept should be chosen over the CPS concept. It will be justified to delineate some more fact that, while we have known EPG as a better option based on the parameters which we considered in this chapter, there are other difficulties and shortcoming of EPG especially with renewable energy (non-hydro) which are;
Energy density (compared to fossil fuel, nuclear, hydro power ),
Base load vs. special application
Incremental load
Practicality
Reliability and security of power systems (unproven technology, still in R&D mode)
The above listed points are the problems of renewable energy when considered for EPG, a more satisfactory report need to be done based on the intermittency of resources at different locations in Nigeria to enable its full application.
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5. MAKING IT HAPPEN The history and problems of electricity has been detailed in the above chapters followed by the potential solution to help reduce the problem of adequacy and sustainability in Nigeria as it wheels towards the direction of an industrialized economy for 2020. We have been able to measure the viability of EPG considering the needs of Nigeria; this chapter aims at analyzing the parameters to achieve realities through EPG. From a techno-economic view, the ways forward have been itemized below and the way to which they affect the proposed solution has been analyzed; This includes; Funding; poverty level, greed, e.t.c. Planning and Operation; Distribution planning and transmission congestion, Registration and licensing, Public enlightenment on the value of electricity, Marketing, Technical knowhow and poor engineering, Privatization and enabling environment, Corruption and management, Measurement and accuracy, and Regulation and Policies.
5.1. Funding As earlier discussed in previous chapters, the volume of funds to be incurred into the power sector is huge and the Federal Government alone cannot comfortably handle this investment. This huge task coupled with the urgent needs of other sectors of the economy has made the government introduce private partnership which is yet to make a clear impact in the industry. However, the funding of projects like this is achievable if the environment is friendly enough to permit business growth and policy implementation to enhance protection and consideration of investor’s interest without compromising the interests and needs of the consumers and the populace at large. Government has taken a bold step in sourcing for private partnership in the major sectors due to lack of funds which affects development and hence a poverty driven economy is
61
experienced. Privatization has helped the power sector to records some huge investment into the generation of power, but this is still very much at its infancy compared to the actual need of the sector to meet the demand of the Nation. All phases have been flagged with one problem or the other which contributes to the general problem the sector faces. EPG is a measure to bridge the gap between supply and demand at the same time an optimum option for including renewable technologies into the energy supply mix of the country. The need and urgency of funding into this sector is of high importance as electricity plays a vital role in economic growth of any nation. While the interaction of a no constraints economy depends on labour supply, raw materials, technology and energy as shown in Figure 9 below, none of the flow variable and depending parameters is independent on funding to have an effective and functional contribution to the economy.
Figure 9: Relationship between functional economic parameters
In view of the interaction of the above parameters, energy is seen to be capable of creating a lapse in a functional economy, and thus need urgent attention.
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As earlier said in chapter 1, energy is abundant in the country but unfortunately ignorance and lack of investment into the power sector accounted for the present problem and the only viable solution is creating a path to invest hugely in the power sector by sustainably harnessing all the possible sources of energy, and by prioritizing electricity with its need to technological development, raw material harnessing and domestic usage for the general populace. It can be estimated that; to actually supply 1MWe, a sum of US$1.5million needs to be invested which shows the volume of investment needed to sustainably power any industrialized Nation. Considering Nigeria, the present gap between demand and supply exceeds 70,000MW in view of its population which leaves the country no choice but to invest over US$100 billion to achieve its aim of an industrialized economy by 2020.
5.2. Planning and operation This is the major of any organization to prove it competency and capability in achieving the designated aims and objectives. The way an organization operates depends on various structures and the operating parameters of the industry in which they operate. The power industry in Nigeria is a complex industry that has a great flux of some smaller companies charged with different responsibilities and management in order to achieve the goal of effective and efficient supply. The different departments under the operation and managements which needs attention are;
Distribution planning and transmission congestion: record has shown that up to 35% of outgoing power from the generation station is loss as a result of transmission and distribution. This raise the concern of the technical team on minimizing the percentage loses to the barest minimum. EPG is sure an option to minimize this loses as the idea of transmission will be ignored from the generation to consumption. Even though as this is an option for saving electricity, energy saving measures such as electricity audit at both input point and discharge points should be introduced to periodically monitor demands and potential loses. Technically,
63
strategies have to be put in place to achieve the stringent but achievable savings needed which could help improve adequacy and increase consumers reliance on public power supply. New technologies have to be implored to effectively and efficiently distribute power without the grid.
Registration and licensing: EPG could effectively work if there is a scheduled pattern of registering customers for electrical supply. This project could be tagged rural electrification but this is not limited to the rural areas alone. The problem of data security and management affects all sectors of the economy as no genuine information is available as regards identification. Economy planning is a product of grassroots’ development and empowerment which can only be done through biometrics identification system and this is not available in Nigeria. This measure could be used to introduce a database of record into the economy and the idea of tax fraud/evasion will be reduced, hence greater income will be recorded for the industry to wheel forward.
Public enlightenment on the value of electricity: this is a media and educational assignment. Greatest population of the nation lies below the age of 30 years and most of these people don’t know the real value of electricity. Energy saving modules should be introduced to elementary, secondary and tertiary schools to enable incorporate energy values into the society. Electricity is subsidized in Nigeria to a great extent due to huge loses, electricity theft and wastage but all this can be minimized if people are enlightened on how useful it is and of course people know the difference between darkness and light. People that fall above the age of 30 could be patronized to be energy efficient by continuous television and radio adverts coupled with billboards awareness, or by learning from their kids.
Marketing: is the all in one tool that economically ascertain growth within any organization. Many of the people have a negative assumption towards getting any reliable power supply and as a result, an increase in the population of self generation. The present situation could make marketing a tough task; the capabilities of the distribution companies have to be proven beyond fluctuation
64
before marketing option could be viable. Customer relation and satisfaction also have to be guaranteed and the customers must be given priority to increase reliance and reduce public condemnation.
Technical knowhow and poor engineering: in EG, this could be a problem if the right engineering techniques is not implored. Due to its mini scale, EG is easy to maintain but it requires some modern engineering capabilities to assume its efficiency. Huge investment is required to equip the workers on the level of operation and maintenance of the plant to avoid great damages. This could also be done by means of automation and therefore a reduced labour force.
Privatization and enabling environment: the involvement of the private sector in the generation of electricity is a great step but until now, investors have suffered a poor business environment as they trade the power produced to PHCN and they get paid for the value of electricity produced in an untimely manner. Electricity is traded with a regulated margin from the NERC through its Multi Year Tariff Order (MYTO). Although this is healthy for the consumers but the structure of payment of subsidies isn’t well organized as the huge sum of fund paid as subsidy from the government is mostly delayed due to bureaucracy according to the investors and this makes them source external funds for continuous operation and maintenance. The funds incur interest depending on the loan period from their funding bodies which isn’t included in the payback from the regulatory bodies and thus, investor’s ends up in a great loss. An institutional structure should be implemented with the Federal Government as the central organ working in tandem with States and Local Government through reporting and legalities which should considerably incorporate the balanced interest of both producers and consumers.
Corruption and management: this occurs as the greatest of it all. To achieve a good result across any industry, leadership should be seen as an opportunity to serve not an avenue to misuse power. This is a greatest problem in Nigeria and it affects the smallest of organizations. Management and audit should be the utmost in any of the public functions to ascertain transparency and diligent services. People should be
65
charged with federal crimes in the event of funds misappropriation which is the order of the day. Public office assumption and status should be re-instated and given the branding which it deserves through quality leadership to reinstate trust and confidence into the followers. Financial actions should be tagged with identities and password to reduce financial crimes and mass tax fraud.
Measurement and accuracy: history of electricity and demand of the country has shown that there isn’t a detailed study of the load demand, hence estimate and assumptions has been used to reach a figure on the needs of the country and which most times isn’t projected right. EG will help to provide electricity through the rural and urban electrification program so as to reach the isolated communities and also accurately measure the actual demand of every localities and state. This could be done by effective operational surveys of a year or more to detail the power requirement according to the departmental usage or application, and then a futuristic forecast could be done considering population growth and other parameters to enhance a federal power plan.
5.3. Regulatory policies for EG The basic of the Power Sector Reform Act, 2005 has empowered NERC to maximize access to electricity by promoting and facilitating consumer’s connection to distribution systems in both rural and urban areas and ensure adequate supply of electricity is available to the populace. It further emphasize on the safety, quality, security, and reliability of service in the process of delivering electricity to consumers. Also, the Act mandate any person engaging in the generation of power above 1MW to obtain a license for operation, and the distribution of power could be evacuated through the distribution network to the third party in order to maximize access to electricity for every Nigerian.
66
5.3.1. Implication of the present legal framework From the existing frame of policies and the various stages of power project implementation, it is clear that; the plan to provide adequate electricity is on its way to reality but this might end up like other project which has been earlier implemented in the sector and proposed solutions turns out to be problem which will have to be tackled again. The institutionalizing of a preferred regulatory framework for the betterment of the present situation involves the full privatization practice of the generation, transmission, distribution and marketing phases to enable competition and open market satisfaction for the consumers, coupled with rigid government laws to punish law breaker and protect power producers and consumers. The first obligation of the regulation is to protect all parties- generators, distributors, marketers, and consumers and enable them to know their rights as a means to satisfaction. Active bodies could be created to implement this under the mandate of the regulations, and to enable them fluidize relationship between the Generators and the Distributors, the Distributors and Marketers, the Marketers and Consumers. This could be done by contractual agreements between parties that will be ratified by designated agents. The regulation should also be amended for Generators to incorporate sustainability; this is the only viable way of making renewable energy a preferred and compulsory means of power generation. The conventional power generation system utilizes thermal due to gas abundance but the cost of enabling the environment for the structural satisfaction needs to be considered. Its estimated by the Ministry of Power in Nigeria that, constructing new gas pipelines for effective distribution, a sum of N1.23 Trillion (US$7.8 Billion) as at 2005 out of which about N361 Billion was released from the excess crude account. This shows the volume of money to be incurred to stabilize electricity in the nation. A clear advantage of EPG is the ability to boycott excess and wasteful transmission cost from the substations to remote areas, since it is possible to bring generation closer in the rural areas by harnessing renewable energy, a tangible amount of the structural cost could be saved and diverted to other pending projects of urgent needs.
67
Licenses have been issued to some generators to generate electricity but if the regulation could be amended to include a 65-35% of non-renewable and renewable energy ratio respectively, there will be a window for EPG and also enhance sustainability. This could be backed up by friendly policies like tax holidays, or “carrot and stick” approach to promote investors interest, moreover, the market in Nigeria is very large to tap from in terms of electricity generation. In view of the present policies, amendment should be done to enhance transparency and sustainability in the power sector to effectively promote growth of the industry and empowerment of the people.
68
6. CONCLUSION Even though it is very disappointing and frustrating that earlier research outcomes haven’t been appraised by the Government on the problems of electricity, this research has been done to the effect of future needs. The problem of adequate electricity has been tagged with; ineffective policies, poor management, great infrastructural need and majorly funding. Government policies are the only viable means of incorporating renewable energy into Nigerian electricity mix. Carrot and stick approach should be incorporated into the legal system to solemnly enable people abide by the law without compromising its effectiveness. Management which remains a power house to the success of any economy is a capital error in Nigerian public sector and this is the major problem that initiated the ongoing power experience. From the phase of this dissertation, EPG could be the next optimal solution to the problems of electricity adequacy in Nigeria. However, more statistical research should be carried out to qualitatively measure the degree of all the problems identified and a corresponding tactical strategy on solving the problem. It should be stressed that mixed concept application (EPG and CPS) will be highly effective if distant location from transmission system are run off-grid with EPG while the cities stay on the CPS due to the problems of retrofitting. It should also be noted that, expanding the nation grid is key to the long term demands of the country. This should be implemented with the appropriate technologies to avoid substantial development in the nearest future. An energy master plan should be developed to incorporate all the live parameters such as;
demographic and econometric data- customer base & classes, annual peak demand & losses, tariff structure, outstanding connection & new connection rate, power allocation, voltage profile, hourly and monthly load for 5years
69
historic and operational data- population breakdown, birthrate, mortality rate, annual GDP, employment rate, housing, number of people per house, per capita income e.t.c
weather data- average temperature, rainfall & humidity
6.1. Contribution to the Knowledge It is accepted that limited work has been done to introduce this EPG concept in Nigeria and the NERC has prepared a public consultation to enhance the concept of EPG but responses have not been received much on it. This material has been able to do justice to the two concepts of electricity generation by unbiased techno-economic comparison; this could serve as a foundation for future and more technical works to be carried out to analyze all other viable strategies to adequate provision of electricity to the Nation.
6.2. Limitation to the Study It is important to note that, this study is only applicable to support rural electrification program due to population density and distribution of settlement in Nigeria. There is great concern for EPG suitability in the urban areas but to an extent EPG has been applied in some developing cities and housing estates/schemes to help reduce power failure. It is important to note the general limitation when taking the study as well which are listed below;
Lack of strong communication with relevant agency to enable qualitative material
Inability of materials certification from regulatory bodies
Hardship in fixing up an appointment with executives
Ambiguous data presented by different organization.
70
6.3. Future work Future work could be related to some strategic problem solving points from that was discussed in chapter three which analyzes the major problems of electricity generation, transmission and distribution. Concentration should be made on;
infrastructural security
design and operation of future distribution systems to enable EPG towards a plugand-play system
synchronization of EPG with the present infrastructure
energy demand management and data accuracy
How can EPG be dispatched centrally (if wanted), and what data infrastructure is needed to achieve this
71
APPENDIX I: Planned total future electricity generation infrastructure in Nigeria (7) S/N Power Station
Type
State
Capacity
Status
(MW) 1
Geregu
Thermal
Kogi
414
Ongoing
2
Papalanto
Thermal
Ogun
335
Ongoing
3
Omotosho
Thermal
Ondo
335
Ongoing
4
Alaoji
Thermal
Abia
504
Ongoing
5
Omoku
Thermal
Rivers
230
New IPP
6
Rain/Ube
Thermal
Balyesa
225
New IPP
7
Sapele
Thermal
Delta
451
New IPP
8
Eyaon
Thermal
Edo
451
New IPP
9
Egboma
Thermal
Imo
338
New IPP
10
Caliber
Thermal
Cross
561
New IPP
River 11
Mambilla
Hydro
Taraba
2600
New
12
Zungeru
Hydro
Niger
950
New
13
AES
Thermal
Lagos
300
Commissioned IPP
14
AGIP Okpai
Thermal
Delta
480
Commissioned IPP
15
Omoku
Thermal
Rivers
150
Approved IPP
16
Obajana
Thermal
Kogi
350
Approved IPP
17
Ibom power
Thermal
Akwa-
188
Approved IPP
Ibom 18
Ethiope Energy Ltd
2800
Approved Licenses IPP
19
Farm Electric Supply Ltd
150
Approved Licenses IPP
20
ICS Power
624
Approved
72
Licenses IPP 21
Supertek Ltd
1000
Approved Licenses IPP
22
Mabon Ltd
39
Approved Licenses IPP
23
Geometric Ltd
140
Approved Licenses IPP
24
Aba Power Ltd
-
Licensed Distributor
25
Westcom Tech & Energy Service Ltd
1000
License Granted IPP
26
Lotus & Bresson Nig Ltd
60
License Granted IPP
27
Anita Energy Ltd
136
License Granted IPP
28
First Independent Power Co Ltd
95
License Granted IPP
29
First Independent Power Co Ltd
150
License Granted IPP
30
Hudson Power Station Ltd
200
License Granted IPP
31
Ibafo Power Station Ltd
640
License Granted IPP
32
Shell Distribution Coy Ltd
100
License Granted IPP
33
Agbara Shoeline Power Co Ltd
1800
License Granted IPP
34
Index thermal power Ltd
1800
License Granted IPP
Total
17,887
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II: Estimated Levelized Cost of New Generation Resources (27)
O&M = operation and maintenance. CC = combined cycle. CCS = carbon capture and sequestration. PV = photovoltaics.
74
III: Regional Variation in Levelized Cost of New Generation Resources (27)
O&M = operation and maintenance. CC = combined cycle. CCS = carbon capture and sequestration. PV = photovoltaics.
75
IV: Per-capita energy consumed in Nigeria (23) Year
Energy
Consumed Population
(million toe)
(million)
Per
capita
Energy consumed (toe/capita)
2002
18.753
122.365
0.153
2003
19.106
126.153
0.151
2004
16.267
129.927
0.125
2005
17.707
133.702
0.132
2006
12.421
140.003
0.089
2007
11.387
144.203
0.079
V: Comparative Per capita energy consumed of African countries (1) Continent/Country
Per
capita
energy
consumption
(KWh/capita) World average
2596
African average
563
Nigeria
136
Kenya
144
Ghana
271
Gabon
932
Egypt
1226
Libya
3336
South Africa
4848
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VI: Wind energy Density Estimates at 25m Height (6) Station
Mean Monthly wind mean speed at Wind 25m Energy Level KWh/yr. (ms)
Annual Wind Energy KWh/yr
Annual Wind energy from a wind Energy turbine in KWh/ yr Diameter=10 Diameter=25 m m
Benin Calabar Enugu Ibadan Ilorin Jos Kaduna Kanu Lagos Lokoja Maiduguri Minna Makurdi Nguru Oshogbo Portharcourt Potiskum Sokoto Warri Yelwa Yola Zaria
2.135
27.86 13.42 93.91 49.78 14.73 192.64 188.88 102.86 52.32 31.21 101.01 12.60 53.27 173.74 12.81 49.98
2,187.81 1,053.69 7,375.75 3,909.79 1,157.06 15,129.60 9,368.1 8,078.61 4,099.78 2,451.23 7,933.61 989.60 4,183.51 13,645.19 1,006.60 3,925.48
13,673.78 6,587.53 46,097.96 24,436.19 7,230.57 94,559.98 58,355.08 50,491.28 25,6852.52 15,320.17 49,583.17 6,185.01 26,148.85 85,284.42 6,288.09 24,533.88
113.25 197.68 24.20 93.13 17.34 63.88
8,894.35 15,525.75 1,900.66 7,314.88 1,361.88 5,017.26
55,591.46 97,035.94 11,879.15 45,714.59 8,511.75 31,357.02
2.32
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VII: Agricultural Resources and residues in Nigeria for 1992 (7) Resources
Production tonnes) Industrial wood + 214,250 fuel Wood + charcoal Cereals 12,403 Root and tubers 41,602 Sugar cane Cotton 276 Coconut 135 Coffee (Green) 3
(103 Residue tonnes) 85,700 16124 16,641 358.8 175.5 3.9
(103 Gigajoules 805,580 207,540 106,502 3,097 6,387 2,246 50
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