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Nigeria assures of sustainable power by 2020 …starts construction of 3050MW Mambilla Hydro in 2013

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By Joseph BAMIDELE

ABUJA – Nigeria’s President Goodluck Jonathan has said that the country is on the path of achieving sustainable power for all citizens by the year 2020.  Jonathan, who made the remark earlier today at the launch of the Sustainable Energy for All, SE4All, an initiative of the United Nations Development Organisation (UNIDO), in Abuja, Nigeria’s capital noted that the programme “aims at assisting Nigeria to refine its energy plans and programmes to provide access to affordable, clean and reliable modern energy services to all citizens.”

Whilst applauding the UN initiative, President Jonathan, who was represented by Vice President Namadi Sambo, said Nigeria is “fully committed to achieving our set targets in less than a decade. All tiers of government are being mobilized to play their roles in ensuring that Nigeria achieves its targets.”
He noted that the programme is a pledge that the administration has made, adding that only the other day, the HMO signed a Performance Agreement with the Nigerian government in keeping promises to project implementation and delivery, mindful that it will safeguard the prosperity of the people.
The United Nations had in September 2011 launched the sustainable energy for all initiative to accelerate the attainment of the overall objectives of the declaration of 2012 as International Year for Suatainable Energy for All.
“This determined response to the challenges of energy poverty in the world requires all stakeholders to take concrete measures towards achieving universal access to modern energy services. It also requires he doubling of both the share of renewable energy in the global mix, and the global rate of energy efficiency. These three critical interlinked objectives are all to be achieved by 2030,” the President observed.
According to Jonathan, “Limitless opportunities abound in renewable energy. Bearing this in mind, we have set national goals and developed a Power Sector Roadmap that will fast-track our realization of the UN targets. At our current rate of power development, through the full implementation of the roadmap, we plan to meet these targets by the year 2020.”
He added that, “Our administration is highly committed to strengthening the power sector so that it can efficiently deliver adequate, qualitative, reliable and affordable power in a deregulated market. The roadmap for the Reform of the Power Sector, launched two years ago, brings into practical effect the 2005 Electric Power Sector Reform Act.”
Jonathan further noted the fact that hydro power generation sources are being exploited. “Only yesterday we had our initial meeting with the consultants and contractors for the construction of the large Mambila Hydro-power plant that will produce 3050mw.
“The processes for the construction of Zungeru 700mw hydropower plant have reached an advanced stage. Several small and medium hydropower projects are also in progress; as well as solar power projects an MOU has already been signed with SEIMENS of Germany for the production of 450mw (with 7 states as 1st phase).
“Bauchi state is already off-taking. 30mw coal to power is being pursued under PPP arrangement as well as a pilot wind power scheme in Katsina with 10mw. Waste-to-power schemes are also being implemented in various states. To support the expected developments in addressing power, we are also addressing other areas that are militating against our growth. Education/ Transport; railway-waterways seaports, airports/ Agriculture, etc.,” he added.
This point was emphasized by the Director-General of UNIDO, Dr. Kandeh Yumkella, who stressed that Nigeria was on a path to achieving the goal of sustainable energy a whole decade ahead of the target.
He noted that, “As a country with vast oil and gas reserves, abundant sunlight and significant hydropower potential, Nigeria should not be suffering energy crisis.  Over the years, the challenge has been in formulating a consistent energy policy.
“However, going by the discussions we have had with officials of the Nigerian government, and the vision we see that the administration has already put in place, we are confident that the country is on a viable road to meeting the targets as set by the United Nations towards sustainable energy for all.”
Yumkella further noted that the scale of policy challenges in energy infrastructure render the current efforts insufficient in scale and scope. “What is now required is a sustained political focus. Energy access must move up the political and development agendas to become a central priority,” he added.

President Jonathan

The UNIDO boss stressed that the Sustainable Energy for All initiative has created a momentum for a specific path to be pursued to concrete action to address energy poverty. “The obstacles to energy access are well known. These barriers, while complex, can be overcome and international cooperation can help this process.”
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Power

Nigeria To Face Increase In Electricity Tariffs From July

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According to reports, Nigeria’s population may face more challenging times ahead as electricity tariffs are projected to increase by over 40 percent in the near future.

 

This rise in tariffs could ultimately result in the elimination of all energy subsidies in the country.

 

Currently, the electricity sector relies on a monthly subsidy of approximately N50 billion, stemming from a shortfall in revenue.

 

The tariff hike, scheduled to take effect from July 1, will pose another significant test for President Bola Ahmed Tinubu’s administration and its ongoing market reforms.

 

The government has already taken steps to remove subsidies on Premium Motor Spirit (PMS) and implemented a floating exchange rate for the national currency.

 

These decisions have added complexity to the price-setting process of the Nigerian Electricity Regulatory Commission (NERC) and its 2022 Multi-Year Tariff Order (MYTO).

 

Despite power sector players failing to meet the target of supplying a minimum of 5,000 megawatts, even after signing contracts with the Nigerian Electricity Regulatory Commission (NERC), the current Service Based Tariff (SBT) is based on an exchange rate of N441/$ and an inflation rate of 16.97 percent.

 

According to NERC’s directives in 2015, the average tariff for distribution companies (DisCos) and different categories of end-users was N25 per kilowatt, as per Order 198/2020, which came into effect on September 1, 2020.

 

However, in the MYTO for 2022, the average tariff increased to N60 per kilowatt across all customer categories, and in the most recent update, it stands at N64 per kilowatt.

 

The determination of the 2015 tariff relied on a foreign exchange rate of N198.97/$, which increased to N383.80/$ in 2020 and further to N441.78/$ in 2022. In terms of inflation, the 2015 MYTO utilized an 8.3 percent rate, which rose to 12 percent in 2020 and reached 16.97 percent in 2022.

 

Currently, the inflation rate stands at 22.41 percent, and experts predict it could reach 30 percent by the end of June, considering the floating of the naira and the removal of subsidies on Premium Motor Spirit (PMS).

 

The tariff determination process takes into account various factors, including the significant metering gap of over seven million, gas prices, losses within the system, and the actual generation capacity. These elements play a role in determining the final tariff.

 

As anticipated, NERC had projected that the tariff for July 2023 would eliminate subsidies and introduce increases to the previously frozen tariff bands D and E.

 

These adjustments were intended to raise the bands from N54.59/kilowatt to N62.16 for band D and from N48.37/kilowatt to N61.16 on average. Moreover, the average increase across all bands was expected to reach N67/kilowatt.

 

However, due to the ongoing floating of the naira and the significant inflationary pressures, it is now projected that the new average tariff will need to be approximately N88/kilowatt for the power sector to recover its costs.

 

According to energy lawyer Madaki Ameh, the continuous and frequent increases in power tariffs are akin to a form of blackmail against electricity consumers.

 

Amen said “Indexing the cost of electricity on the dollar is a huge mistake because most of the inputs for electricity supply are local. The DisCos are also holding Nigerians to ransom by failing to increase the supply base, thereby spreading the tariffs across a broader spectrum of consumers to reduce the unit cost of electricity.”

 

He insisted that as long as there remain many unmetered consumers and many others not connected to the grid at all, the few consumers on the grid would continue to be subjected to unjust tariffs, which are not reflective of the quality of service delivered.

 

Ameh hoped that the signing into law of the new Electricity Act would mark “the beginning of light at the end of the long tunnel of inefficient and epileptic power supply in Nigeria.”

 

Segun Ajibola, the former President of the Chartered Institute of Bankers of Nigeria (CIBN) and a professor of Economics at Babcock University, highlighted that there remains a gap between the cost of electricity and the value it provides in exchange.

 

“Nigerians are still struggling to keep pace with the cost of energy for business and household use. If the electricity tariff goes up as envisaged, the question remains if there will be value for the quantum of electricity so paid for.

 

“The truth remains that if electricity supply is constant, of the right quantity and quality, the envisaged upward review in the tariff will be gladly absorbed by the populace,” he said.

 

Lanre Elatuyi, an Electricity Market Analyst, expressed that the recently implemented tariff rate would have significant implications. He emphasized that the devaluation of the Nigerian currency poses a major challenge for companies with dollar-denominated loans to repay.

 

He said “They will need more naira today to buy a dollar. They need to manage their exposure to foreign exchange risk. Even operators of hydro plants pay their concession fees in dollars. So, wholesale electricity price will be adjusted upward and this will get to the end users’ tariffs too.”

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Power

Buhari’s Gov, State Governors Secretly Sold 5 Power Plants – Shehu Sani

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Senator Shehu Sani, a prominent Nigerian lawmaker has accused President Muhammadu Buhari’s government and state governors of secretly selling five power generating plants without disclosing the utilization of the funds received.

 

He disclosed this in his Twitter handle on Monday.

 

Senator Sani, known for his outspoken nature and activism expresses his concerns over the alleged undisclosed sale of the power plants.

 

He claimed that the government, in collaboration with state governors, had carried out the transactions without informing the Nigerian public about the purpose of the funds acquired from the sale.

 

The post reads “Buhari’s Government in collaboration with the State Governors quietly sold the five power generating plants without telling the country what the money was used for.

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Power

Nigeria’s VP Inaugurates 240MW Afam 3 Fast Power Project

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The Vice President of Nigeria, Prof. Yemi Osinbajo, has inaugurated the Afam 3 Fast Power 240-megawatt turbine project in Rivers State.

 

The project, which is a subsidiary of the Transcorp Group located in Oyigbo, on the outskirts of Port Harcourt in the state, was unveiled during a ceremony that took place on Tuesday.

 

The event, which was attended by several dignitaries, including the Chairman of Transcorp Group, Tony Elumelu, and other top officials, saw the Vice President arriving at the venue in a chopper at exactly 11:35 am.

 

Upon his arrival, he was escorted into the premises where he officially inaugurated the project.

 

During his speech at the event, he disclosed that the acquisition of the project was approved by the National Council on Privatisation (NCP) and the acquisition cost was ₦105.3 trillion.

 

Osinbajo further emphasized that the successful completion of the project is a significant breakthrough in Nigeria’s power sector.

 

In his address, Osinbajo said, “In 2020, electricity subsidies reached N584 billion, but service-based tariffs have led to a doubling of collection in the Nigeria Electricity Supply Industry from N40 billion in 2020 to N80 billion in the first quarter of 2023.

 

“If this trajectory continues, the Nigeria Electricity Supply Industry will be able to pay for itself. Our administration has also created programs for off-grid for electrification. Rural Electrification Agency now has the capacity to provide electricity supply on a first-class basis.

 

“We are on track to electrify all Nigerians in the next decade. However, we will not make progress if our gas supply does not improve. The gas supply challenges are hampering improvements.”

 

He further lauded General Electric, the National Council on Privatization (NCP), and the host communities for their contribution to the completion of the Afam 3 Fast Power 240-megawatt turbine project in Rivers State.

 

Osinbajo highlighted that the successful completion of the project will significantly increase the country’s power supply capacity, leading to a better quality of life for Nigerians.

 

In November 2020, the federal government and the Transcorp Power Consortium signed a share sale and purchase agreement in relation to Afam Power Plc and Afam 3 Fast Power Limited.

 

The National Council on Privatization approved the privatization of the Afam Power Plant back in August 2017, which triggered a competitive bidding process involving 12 prospective investors.

 

After careful consideration, Transcorp Power Consortium emerged as the preferred bidder with a combined offer of N105 billion.

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