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Experts point to Solar, Coal, Hydro power, as gas challenges persist

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ABUJA – Gas supply shortages affecting power supply in many parts of the country have reinforced the need for the government to speed up efforts at diversifying the nation’s power generation mix, which is currently largely dependent on gas, analysts have said.

Nigeria’s electricity generation has continued to fluctuate between 2,500 megawatts (MW) and 4,600 MW in recent years, with the failure of the federal government to achieve its planned 10,000 MW by December 2013.

Meanwhile, the country, with a population of about 170 million people, is estimated to need about 40,000 MW of electricity over the next decade, but current generation capacity falls far short of the almost 13,000 MW required to meet current peak demand.

Experts say diversification of the generation mix would help to lift power supply in the nation.

Experts point to Solar, Coal, Hydro power, as gas challenges persistThey add that to minimise the current supply challenges being faced with gas supply, other fuel sources such as solar, coal and hydro-power should be fully explored in order to ensure diversified electricity sources that will promote electricity availability and reliability.

The need for more incentives to boost the commercialisation of renewable energy technology in the country as alternative source of electricity supply was identified as critical to facilitating further investments.

“There is no doubt Nigeria needs to diversify its energy resource inputs for power. Gas is better as a peak demand source. Coal serves well as a base-load source. I am an advocate of energy resource mix in the power sector. The use of oil to power generators is ludicrous and a waste of a scarce resource.

“ Nigeria must wake up to that. But if we have to rely on gas as a transition fuel, we must explore more aggressively, but we are not. Neither are we doing much for coal as we should,” said Wumi Iledare, president of the International Association for Energy Economics and director, Emerald Energy Institute, University of Port Harcourt.

Atedo Peterside, chairman of the Technical Committee, National Council on Privatisation, speaking at a conference weeks back, had said that while gas supply constraints arising from capacity shortfalls/lags could be foreseen, the impact of pipeline vandalisation was not so predictable and could induce damaging shocks to the health of the entire electricity value chain.

“It has become increasingly likely that renewable energies will provide more of the world’s electricity than gas-fired power plants by 2016, as its declining cost profile positions it to compete more vigorously with fossil fuels”, says a new report by Ecobank Oil, Gas and Energy Research headed by Rolake Akinkugbe.

According to the report titled ‘Fully charged: Key dynamics in Middle Africa’s Power Sector in 2014’, Ghana is leading the rest of West Africa in driving the renewable energy agenda with its 2011 Renewable Energy Act. The country plans to invest at least $1 billion in renewable energy projects in next 7 years to 2020.

“Costs tend to be high for renewable energy projects in Africa due to equipment imports, higher internal transport costs, import levies. Developing local manufacturing capabilities and increasing the share of local content for renewable power generation projects can help reduce costs, which are predicted to decline over time,” the report said.

Adeola Adenikinju, president of Nigerian Association for Energy Economics and director, Centre for Petroleum, Energy Economics and Law, University of Ibadan, said in the short term, the focus would remain on gas due to a number of economic factors and the relatively shorter term of completing a gas-fired thermal plant.

“However, in the medium term and to avoid or minimise the current challenges we are facing with gas supply, we must be thinking of dual-fuel plants, and other fuel sources both renewable and non-renewable, in order to ensure energy security, a diversified electricity source that will promote electricity availability, reliability and enhance electricity access,” he said.

Adenikinju added that there are currently very limited incentives to boost commercialisation of renewable energy technology as alternative source to electricity supply, citing Germany and China as examples worth studying for Nigeria.

The Ecobank report released on January 30, 2014 stated that the full penetration of renewable energy into the African market would largely hinge on investment security underpinned by regulation.

“Many countries in sub-Saharan Africa have renewable potential that is many times their current demand for electricity, but most private sector executives view national targets and Feed-in-Tariffs as the most powerful incentive mechanisms required to accelerate renewable energy development in the region,” the report said.

Oladiran Ajayi, energy expert and a senior associate with Templars law firm, said considering the relative costs of alternative sources of energy, the nation should pursue them, but not at the expense of gas development.

Last year in August, the federal government signed a $3.7bn memorandum of understanding with a Nigerian-Chinese consortium, HTG-Pacific Energy, for the development of a 1000- to 1200-MW coal-fired power plant in Enugu state. The plant is expected to be operational in the next four years.

Also, in late January the government said it was building over 200 new dams in order to achieve its target of 10,000MW of electricity at the end of this year, according to Vice President Namadi Sambo.

Nigeria, with a population of about 170 million people, is estimated to need about 40,000 MW of electricity over the next decade, but current generation capacity falls far short of the almost 13,000 MW required to meet peak demand.

– BUSINESS DAY

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Energy

NCDMB Seeks Industry-wide Support for FDIs, NOGOF, Others, To Ramp Up Crude Output, Energy Security

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As the 42nd Annual International Conference and Exhibition of the Nigerian Association of Petroleum Explorationists (NAPE) got underway in Lagos on Monday, the Nigerian Content Development and Monitoring Board (NCDMB) has canvassed industry-wide support for initiatives that would reverse negative trends in Nigeria’s energy sector.

The Executive Secretary, NCDMB, Engr. Felix Omatsola Ogbe, made the assertion in a paper entitled “Resolving the Nigerian Energy Trilemma: Energy Security, Sustained Growth, and Affordability”.

He identified “alarming scale of pipeline vandalism and theft of crude oil” as the biggest threats to Nigeria’s energy security, noting that major oil and gas projects are required as well as a robust security strategy based on mutually beneficial collaboration with host communities.

To achieve the above objectives, the Board has undertaken to work with stakeholders in the industry to dedicate one week in every calendar year to signing Final Investment Decisions (FIDs) on new projects, as prospective investors could be motivated to act expeditiously to meet agreed-upon deadlines and regulators are similarly encouraged.

Engr. Ogbe noted that FDIs would “catalyze new projects in the Nigerian oil and gas industry,” and that fruitful collaboration amongst stakeholders and NCDMB would actualize the intentions of the Presidential Directives rolled out in March 2024 by The Presidency, and thus “fast-track the contracting cycle and incentivize investments in our sector.”

The NCDMB boss, who was represented by the General Manager, Corporate Communications and Zonal Coordination, Esueme Dan Kikile, Esq., suggested that the FDI Week be incorporated into any of the major oil, gas and energy conferences held in the country.

According to him, the Board holds a similar biennial event called Nigerian Oil and Gas Opportunity Fair (NOGOF), which is attended by all the international and indigenous operating companies to share awareness of opportunities and projects to be executed.

On the Board’s strategy to create a safe and secure operating environment for oil and gas companies and thus eliminate the huge costs associated with vandalism and attacks on personnel and installations, the Executive Secretary disclosed that NCDMB has introduced a new policy known as “Back to the Creeks Initiative.”

According to him, “We are convinced at the Board that the incessant tampering with crude oil pipelines and hostilities in oil-producing communities have a huge impact on energy security,” and that the new initiative is geared towards curtailing incidences of disruptions of oil industry operations through targeted interventions. These include execution of corporate social responsibility projects in communities, provision of affordable finance to local contractors, upgrade of basic educational facilities in villages and communities, building the capacity of teachers and improving the infrastructure at that level.

The initiative, whose details would soon be publicized, is expected to create a stakeholder feeling in host communities and make them view industry assets around them as facilities that are bound up with their socio-economic well-being.

Such an orientation would translate into safety of assets, increased crude oil production, drastically reduced security costs and more favourable pricing of petroleum products, he added.

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Shell Will Continue To Power Progress On Energy Security In Nigeria – Okunbor

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Shell will continue to power progress in the drive for energy security in Nigeria through its businesses in the Upstream, Midstream and Downstream and Renewables sectors.

This view was shared by the Country Chair, Shell Companies in Nigeria and Managing Director, The Shell Petroleum Development Company of Nigeria Ltd (SPDC,) Osagie Okunbor in Lagos, on Tuesday.

It was contained in remarks delivered on his behalf by Exploration Manager Gogo Eneyok at the opening of the 42nd Annual International Conference and Exhibition of the Nigerian Association of Petroleum Explorationists (NAPE).

Okunbor maintained that the range of the Shell businesses were integrated across the energy value chain and working hard to address the challenges as captured in the theme of the event: “Resolving the Nigeria Energy Trilemma: Energy Security, Sustainable Growth & Affordability.”

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In addition to the SPDC, the other Shell businesses in Nigeria include, Shell Nigeria Exploration and Production Company Limited (SNEPCo,) Shell Nigeria Gas (SNG,) Daystar Power and All On as well as Nigeria Liquefied Natural Gas (NLNG,) in which Shell has 25.6% interests.

Okunbor stated, “Shell, working with government, regulators and stakeholders, is actively participating in finding a pathway through the energy trilemma. We are focused on generating maximum value and cash to power the country.”

Referring to efforts towards low and zero-carbon products to market, he said, “Shell is deploying latest technologies in reducing emission in our operations and we are well on track to meet our forecasted Green House Gas reduction targets.

”SNG is also increasing domestic gas delivery through its distribution network of 150 kilometers in Nigeria while Daystar and All On are giving individuals and communities access to cleaner and affordable energy.

Okunbor however, pointed out that for these and other efforts and investments to achieve the desired results, government had to improve the regulatory environment with continuous improvement in the provisions in the Petroleum Industry Act. “The menace of crude theft and illegal refining must also be tackled to safeguard the nation’s resources and protect the environment,” he added.

The opening ceremony of the NAPE conference featured a tour of exhibition stand by the executive members of NAPE. He and other dignitaries were conducted round the Shell stand by Magdalene Umoh, a Senior Production Systems Engineer.

She gave an insight to the milestones of Shell businesses in Nigeria including social investments and development of Nigerian contractors and vendors. The Shell stand is complemented by a well-staffed medical team which is attending to participants and visitors for the duration of the four-day conference.

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NCDMB, Butane Energy, Boost LPG Supply With Commissioning Of Kaduna Plant

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The Nigerian Content Development and Monitoring Board (NCDMB) and Butane Energy Limited have taken a significant step forward in their collective drive to make liquefied petroleum gas (LPG) a widely accessible, cleaner, and more cost-effective fuel option for cooking, with the commissioning of a 180-metric-tonne LPG Filling Plant in Kaduna, Kaduna State.

Commissioned on Friday, the Filling Plant, is the second after the 100MT LPG Storage and Bottling Plant in Kabukawa Layout, Katsina, Katsina State, in 2021, in keeping with a joint venture to establish five of such facilities in Northern Nigeria with a combined storage capacity of 1,000MT.

Biztellers reports that the Kano LPG Storage and Bottling Plant in Kano State is slated for commissioning in the first quarter of 2025, while construction work on another in Bauchi is at an advanced stage, with Abuja next in line.

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The Executive Secretary of NCDMB, Engr. Felix Omatsola Ogbe, represented by the Director, Monitoring and Evaluation of NCDMB, Alhaji Abdulmalik Halilu, expressed satisfaction with the impressive strides of Butane Energy Ltd.

He pointed out that NCDMB was motivated to enter into equity partnership with the indigenous LPG storage, trading and marketing company after the latter presented “a [bankable] business plan aimed at enhancing gas penetration in northern Nigeria.”

He explained that the Board acted in line with its statutory mandate to catalyse in-country capacity development through equity funding.

NCDMD, he noted further, was also interested in job creation through such projects, as there were clear possibilities for employment into technical and managerial cadres as operations progressed.

According to him, no fewer than 200 Nigerians gained employment, and there was the added benefit of local content growth.

Equally significant to the NCDMB was the consideration that the project was in alignment with Federal Government’s expressed commitment to net-zero emissions by 2026, and the campaign for cleaner alternative to kerosene and firewood as cooking fuel.

In his own remarks, the Chairman, Butane Energy Ltd, Alhaji Isa Inuwa Muhammed, stated that NCDMB is a co-owner of the company, and expressed gratitude to the Management of the NCDMB for the confidence reposed in his company, particularly in its vision and business approach.

According to the Chairman, the relationship between the Board and Butane is based on trust, and that the success thus far would greatly reinforce the partnership.

Established in 2017 as a player in LPG storage and marketing, Butane Energy Ltd has massive distribution assets in northern Nigeria, and is deliberate in its corporate objective to make the fuel accessible to every part of the region.

The LPG Filling Plant is part of NCDMB’s strategic third-party investments aimed at supporting in-country capacity development, reducing reliance on traditional fuels, fostering sustainability and building a greener future for Nigeria.

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