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| | <span style="color:#FF0000">Figure missing</span><br/>As per the chart below, in terms of the distribution of the energy demand, in 2011, the total final consumption was 108,947 ktoe, of which the residential sector accounted for most of the energy consumed.<br/><br/> | | <span style="color:#FF0000">Figure missing</span><br/>As per the chart below, in terms of the distribution of the energy demand, in 2011, the total final consumption was 108,947 ktoe, of which the residential sector accounted for most of the energy consumed.<br/><br/> |
| | [[Nigeria Energy Situation#toc|► Go to top]] | | [[Nigeria Energy Situation#toc|► Go to top]] |
| | + | |
| | | | |
| | | | |
| | = Electricity = | | = Electricity = |
| − | With a marginal share of 2% in the total final energy consumption, electricity remains a secondary source of energy in Nigeria. Only about 9% of the household’s total energy consumption which, as previously shown, is driven by the use of biomass<ref name="Nigerian Energy Support Programme, To be published, The Nigerian Energy Sector - an Overview with a Special Emphasis on Renewable Energy, Energy Efficiency and Rural Electrification quoting IEA, 2013: http://www.iea.org/statistics/topics/Electricity/">Nigerian Energy Support Programme, To be published, The Nigerian Energy Sector - an Overview with a Special Emphasis on Renewable Energy, Energy Efficiency and Rural Electrification quoting IEA, 2013: http://www.iea.org/statistics/topics/Electricity/</ref>.<br/><br/>As of 2008, there were a total of 4,747,870 registered customers connected to the distribution grid<ref name="Wale Shonibare, January 2014, Meeting and sustaining the funding needs for the power sector, UBA Capital Plc">Wale Shonibare, January 2014, Meeting and sustaining the funding needs for the power sector, UBA Capital Plc</ref>. Electricity consumption from residential and commercial sectors represented 80% of the total electricity demand. The rest was covered by the Industrial, Street Lighting and Special Tariff sectors. The share of large consumers, such as industry or large commercial areas, only represented 1% of the total electricity consumption<ref name="Power Holding Company of Nigeria – Project Management Unit, January 2009, National Load Demand System – National Energy Development Project – Draft final report Volume 1 – National Demand Load Forecast, Tractebel Engineering Suez and Omega Systems, p. 110">Power Holding Company of Nigeria – Project Management Unit, January 2009, National Load Demand System – National Energy Development Project – Draft final report Volume 1 – National Demand Load Forecast, Tractebel Engineering Suez and Omega Systems, p. 110</ref>.<br/><br/>As shown in the graph below, compared to the other West African countries, Nigeria’s electrification rates are relatively high, but have progressed at a relatively slower pace. In 2010, electrification rates were at 48% and had only increased by 5% since the early 1990s<ref name="Sustainable Energy For All, 2013, Global Tracking Framework, p. 267">Sustainable Energy For All, 2013, Global Tracking Framework, p. 267</ref>.<br/><br/><span style="color: rgb(255, 0, 0); line-height: 1.5em; font-size: 0.85em;">Figure missing</span><br/>As it can be seen in the figure below, the gap between rural and urban electrification rates is lower than in other West African countries, but remains significant (Rural: 35% and Urban: 62%)<ref name="Sustainable Energy For All, 2013, Global Tracking Framework, p. 267">Sustainable Energy For All, 2013, Global Tracking Framework, p. 267</ref>.<br/><br/><span style="color:#FF0000"></span><br/>Access rates also vary substantially amongst the states of Nigeria. For instance, according to the projections of the [http://www.jica.go.jp/english/ Japanese International Cooperation Agency (JICA)], Taraba State had the lowest electrification rate in 2010 with 21% and Lagos the highest with 96%. Out of the 13 states that registered the lowest electrification rates, 10 were located in the North-West and North-East. The 8 states with the highest electrification rates were located in the South-West or South-South. The table below presents an overview of the state of electrification per state:<br/><br/><span style="color:#FF0000;">Figure missing</span><br/>As a result of high economic growth and demographic pressure, in 2008, the Energy Commission of Nigeria (ECN) together with the International Atomic Energy Agency (IAEA) projected a demand of 15,730 MW for 2010 and 119,200 MW for 2030 under the reference scenario (7% yearly economic growth)As a result of high economic growth and demographic pressure, in 2008, the Energy Commission of Nigeria (ECN) together with the International Atomic Energy Agency (IAEA) projected a demand of 15,730 MW for 2010 and 119,200 MW for 2030 under the reference scenario (7% yearly economic growth)<ref name="A. S. Sambo, 2008, Matching Electricity Supply with Demand in Nigeria, Fourth Quarter, International Association for Energy Economic, p. 33">A. S. Sambo, 2008, Matching Electricity Supply with Demand in Nigeria, Fourth Quarter, International Association for Energy Economic, p. 33</ref>. Other actors like the defunct Power Holding Company of Nigeria (PHCN)<ref name="Power Holding Company of Nigeria – Project Management Unit, January 2009, National Load Demand System – National Energy Development Project – Draft final report Volume 1 – National Demand Load Forecast, Tractebel Engineering Suez and Omega Systems">Power Holding Company of Nigeria – Project Management Unit, January 2009, National Load Demand System – National Energy Development Project – Draft final report Volume 1 – National Demand Load Forecast, Tractebel Engineering Suez and Omega Systems</ref> or or World Alliance for Decentralized Energy (WADE) et al. have also developed scenarios<ref name="World Alliance for Decentralized Energy, Christian Aid and International Centre for Energy, Environment and Development, August 2009, More for less: How decentralized energy can deliver cleaner, cheaper, and more efficient energy in Nigeria">World Alliance for Decentralized Energy, Christian Aid and International Centre for Energy, Environment and Development, August 2009, More for less: How decentralized energy can deliver cleaner, cheaper, and more efficient energy in Nigeria</ref>. The results of these studies vary widely, but they all conclude that the current gap between supply and demand is already very substantial (1:3) and that, it will continue widening if under a business as usual scenario.<span style="color:#FF0000"></span><br/> | + | With a marginal share of 2% in the total final energy consumption, electricity remains a secondary source of energy in Nigeria. Only about 9% of the household’s total energy consumption which, as previously shown, is driven by the use of biomass<ref name="Nigerian Energy Support Programme, To be published, The Nigerian Energy Sector - an Overview with a Special Emphasis on Renewable Energy, Energy Efficiency and Rural Electrification quoting IEA, 2013: http://www.iea.org/statistics/topics/Electricity/">Nigerian Energy Support Programme, To be published, The Nigerian Energy Sector - an Overview with a Special Emphasis on Renewable Energy, Energy Efficiency and Rural Electrification quoting IEA, 2013: http://www.iea.org/statistics/topics/Electricity/</ref>.<br/><br/>As of 2008, there were a total of 4,747,870 registered customers connected to the distribution grid<ref name="Wale Shonibare, January 2014, Meeting and sustaining the funding needs for the power sector, UBA Capital Plc">Wale Shonibare, January 2014, Meeting and sustaining the funding needs for the power sector, UBA Capital Plc</ref>. Electricity consumption from residential and commercial sectors represented 80% of the total electricity demand. The rest was covered by the Industrial, Street Lighting and Special Tariff sectors. The share of large consumers, such as industry or large commercial areas, only represented 1% of the total electricity consumption<ref name="Power Holding Company of Nigeria – Project Management Unit, January 2009, National Load Demand System – National Energy Development Project – Draft final report Volume 1 – National Demand Load Forecast, Tractebel Engineering Suez and Omega Systems, p. 110">Power Holding Company of Nigeria – Project Management Unit, January 2009, National Load Demand System – National Energy Development Project – Draft final report Volume 1 – National Demand Load Forecast, Tractebel Engineering Suez and Omega Systems, p. 110</ref>.<br/><br/>As shown in the graph below, compared to the other West African countries, Nigeria’s electrification rates are relatively high, but have progressed at a relatively slower pace. In 2010, electrification rates were at 48% and had only increased by 5% since the early 1990s<ref name="Sustainable Energy For All, 2013, Global Tracking Framework, p. 267">Sustainable Energy For All, 2013, Global Tracking Framework, p. 267</ref>.<br/><br/><span style="color: rgb(255, 0, 0); line-height: 1.5em; font-size: 0.85em;">Figure missing</span><br/>As it can be seen in the figure below, the gap between rural and urban electrification rates is lower than in other West African countries, but remains significant (Rural: 35% and Urban: 62%)<ref name="Sustainable Energy For All, 2013, Global Tracking Framework, p. 267">Sustainable Energy For All, 2013, Global Tracking Framework, p. 267</ref>.<br/><br/><span style="color:#FF0000"></span><br/>Access rates also vary substantially amongst the states of Nigeria. For instance, according to the projections of the [http://www.jica.go.jp/english/ Japanese International Cooperation Agency (JICA)], Taraba State had the lowest electrification rate in 2010 with 21% and Lagos the highest with 96%. Out of the 13 states that registered the lowest electrification rates, 10 were located in the North-West and North-East. The 8 states with the highest electrification rates were located in the South-West or South-South. The table below presents an overview of the state of electrification per state:<br/><br/><span style="color:#FF0000;">Figure missing</span><br/>As a result of high economic growth and demographic pressure, in 2008, the Energy Commission of Nigeria (ECN) together with the International Atomic Energy Agency (IAEA) projected a demand of 15,730 MW for 2010 and 119,200 MW for 2030 under the reference scenario (7% yearly economic growth)As a result of high economic growth and demographic pressure, in 2008, the Energy Commission of Nigeria (ECN) together with the International Atomic Energy Agency (IAEA) projected a demand of 15,730 MW for 2010 and 119,200 MW for 2030 under the reference scenario (7% yearly economic growth)<ref name="A. S. Sambo, 2008, Matching Electricity Supply with Demand in Nigeria, Fourth Quarter, International Association for Energy Economic, p. 33">A. S. Sambo, 2008, Matching Electricity Supply with Demand in Nigeria, Fourth Quarter, International Association for Energy Economic, p. 33</ref>. Other actors like the defunct Power Holding Company of Nigeria (PHCN)<ref name="Power Holding Company of Nigeria – Project Management Unit, January 2009, National Load Demand System – National Energy Development Project – Draft final report Volume 1 – National Demand Load Forecast, Tractebel Engineering Suez and Omega Systems">Power Holding Company of Nigeria – Project Management Unit, January 2009, National Load Demand System – National Energy Development Project – Draft final report Volume 1 – National Demand Load Forecast, Tractebel Engineering Suez and Omega Systems</ref> or or World Alliance for Decentralized Energy (WADE) et al. have also developed scenarios<ref name="World Alliance for Decentralized Energy, Christian Aid and International Centre for Energy, Environment and Development, August 2009, More for less: How decentralized energy can deliver cleaner, cheaper, and more efficient energy in Nigeria">World Alliance for Decentralized Energy, Christian Aid and International Centre for Energy, Environment and Development, August 2009, More for less: How decentralized energy can deliver cleaner, cheaper, and more efficient energy in Nigeria</ref>. The results of these studies vary widely, but they all conclude that the current gap between supply and demand is already very substantial (1:3) and that, it will continue widening if under a business as usual scenario.<br/><br/> |
| − | <br/>
| + | [[Nigeria Energy Situation#toc|►Go to top]] |
| | == On-grid Generation<br/> == | | == On-grid Generation<br/> == |
| | | | |
| | === State === | | === State === |
| − | Installed capacity increased by 5,600 MW over the period 1968 to 1991. However, the lack of significant investment in maintenance of the existing and in the construction of new infrastructure in the 1990s resulted in the decrease of capacity throughout the 1990s and 2000s. As of mid-2014, there were a total of 56 licenses for on-grid generation, 36 on-grid IPP licenses with a total on-grid generation capacity of 19,407 MW, mostly thermal generation installed in the South of the country where the oil and gas fields are located. However, out of this figure, only 11,774 MW have been built. Due to poor maintenance, only 6164.13 MW are currently available.<br/><br/>Most of the generation capacity is based on natural gas. The share of large hydropower has decreased due to the Government’s focus on thermal. This trend is expected to continue in the future. The thermal/hydro mix is 85.5/14.5 for the installed capacity and 83.5/16.5 for the available generation capacity. Regular gas supply shortages, which are the result of vandalization and unattractive gas supply tariffs, further contribute to the reduction in the total available generation which was estimated at 3,600 MW in December of 2013<ref name="Anjeed Innova Group, August 2014, Nigerian Power Sector Report, p. 30 quoting PwC Roundtable">Anjeed Innova Group, August 2014, Nigerian Power Sector Report, p. 30 quoting PwC Roundtable</ref>. The table below includes the list of on-grid generation plants in Nigeria:<br/><br/><span style="color: rgb(255, 0, 0); line-height: 1.5em; font-size: 0.85em;">Table missing</span><br/><br/> | + | Installed capacity increased by 5,600 MW over the period 1968 to 1991. However, the lack of significant investment in maintenance of the existing and in the construction of new infrastructure in the 1990s resulted in the decrease of capacity throughout the 1990s and 2000s. As of mid-2014, there were a total of 56 licenses for on-grid generation, 36 on-grid IPP licenses with a total on-grid generation capacity of 19,407 MW, mostly thermal generation installed in the South of the country where the oil and gas fields are located. However, out of this figure, only 11,774 MW have been built. Due to poor maintenance, only 6164.13 MW are currently available.<br/><br/>Most of the generation capacity is based on natural gas. The share of large hydropower has decreased due to the Government’s focus on thermal. This trend is expected to continue in the future. The thermal/hydro mix is 85.5/14.5 for the installed capacity and 83.5/16.5 for the available generation capacity. Regular gas supply shortages, which are the result of vandalization and unattractive gas supply tariffs, further contribute to the reduction in the total available generation which was estimated at 3,600 MW in December of 2013<ref name="Anjeed Innova Group, August 2014, Nigerian Power Sector Report, p. 30 quoting PwC Roundtable">Anjeed Innova Group, August 2014, Nigerian Power Sector Report, p. 30 quoting PwC Roundtable</ref>. The table below includes the list of on-grid generation plants in Nigeria:<br/><br/><span style="color: rgb(255, 0, 0); line-height: 1.5em; font-size: 0.85em;">Table missing</span><br/><br/>[[Nigeria Energy Situation#toc|►Go to top]] |
| | === Challenges === | | === Challenges === |
| | As previously mentioned, the big gap between demand and supply, has led to recurrent power shortcuts. The fast growth in the power demand due to high demographic pressure and economic development make the task of bridging the gap even more challenging. The heavy reliance of Nigeria’s power sector on gas and the issues affecting the regular gas supply to the generation plants represent an additional challenge. | | As previously mentioned, the big gap between demand and supply, has led to recurrent power shortcuts. The fast growth in the power demand due to high demographic pressure and economic development make the task of bridging the gap even more challenging. The heavy reliance of Nigeria’s power sector on gas and the issues affecting the regular gas supply to the generation plants represent an additional challenge. |
| | === Plans and Potential === | | === Plans and Potential === |
| − | In order to bring a solution to this problem, the Government, in its Power Sector Reform Roadmap, sets the ambitious targets to increase installed hydro to 5,690MW, thermal over 20,000 MW, 1000 MW of renewable generation capacities by 2020<ref name="The Presidency of the Federal Republic of Nigeria, August 2013, Roadmap for Power Sector Reform, Revision1, p. 24-25">The Presidency of the Federal Republic of Nigeria, August 2013, Roadmap for Power Sector Reform, Revision1, p. 24-25</ref>. The targets also aim at diversifying Nigeria’s energy mix to reduce its gas dependence.<br/><br/>As an emergency solution, many Electricity Distribution Companies (through Independent Power Producers – IPPs) and States are currently investing in embedded generation (medium scale generation, generally less than 20MW, directly connected to the distribution network). There are 3 licenses for embedded generation with a total installed capacity of 133 MW<ref name="For further information, please refer to NERC website: http://www.nercng.org/index.php/industry-operators/licensing-procedures/licencees">For further information, please refer to NERC website: http://www.nercng.org/index.php/industry-operators/licensing-procedures/licencees</ref>. Examples are the Eko Electricity Distribution Company that launched a bidding process for several IPP gas power plants below 20 MW or the Sokoto State Government that is in the process of finalizing the construction of a 38 MW diesel power plant (to be then converted into gas). Another example is NESCO, a company based in Plateau that has been operating a small-hydropower plant as an IPP since 1993 and from which the State Government buys electricity in bulk<ref name="Plateau State Government, Investment Profile for Plateau State – Companies and Projects, p. 33">Plateau State Government, Investment Profile for Plateau State – Companies and Projects, p. 33</ref>.<br/><br/>Nigeria has vast oil (37.2 billion barrels as of 2012) and gas (5.2 trillion cubic metres as of 2012) resources that could be exploited to increase its generation capacity. As of mid-2014, four thermal power plants were being constructed: Calabar Generation Company Ltd (634 MW), Egbema Generation Company Ltd (381 MW), Gbarain Generation Company Ltd (254 MW) and Omoku Generation Company Ltd (265 MW). Other large gas power plants are being planned such as the 459 MW Azura Edo IPP or the 533 MW Qua Iboe IPP (QIPP) projects<ref name="Nigerian Energy Support Programme, To be published, The Nigerian Energy Sector - an Overview with a Special Emphasis on Renewable Energy, Energy Efficiency and Rural Electrification">Nigerian Energy Support Programme, To be published, The Nigerian Energy Sector - an Overview with a Special Emphasis on Renewable Energy, Energy Efficiency and Rural Electrification</ref>. Nigeria also envisages the use of its coal reserves to produce power. The country also aspires to generate power from nuclear.<br/><br/>As shown in the table below, in addition, the country is endowed with vast renewable energy wealth which the authorities also intend to utilize for generation purposes.<br/><span style="color: rgb(255, 0, 0); line-height: 1.5em; font-size: 0.85em;">Table missing</span><br/><br/>A 10 MW pilot wind plant has been built in Katsina and is awaiting commissioning. One major hydropower plant is now under development, the Zungeru 700 MW plant in Niger State. A number of smaller hydropower plants are also being planned such as Gurara (30 MW) or Kashimbilla (40 MW). The 3,050 MW Mambilla hydropower plant project is currently being reviewed. In addition, NERC has issued licenses for 8 solar projects totaling a capacity of 868 MW and a 100 MW wind park<ref name="Nigerian Energy Support Programme, To be published, The Nigerian Energy Sector - an Overview with a Special Emphasis on Renewable Energy, Energy Efficiency and Rural Electrification">Nigerian Energy Support Programme, To be published, The Nigerian Energy Sector - an Overview with a Special Emphasis on Renewable Energy, Energy Efficiency and Rural Electrification</ref>. There are many prospectors interested in developing large solar plants.<br/> | + | In order to bring a solution to this problem, the Government, in its Power Sector Reform Roadmap, sets the ambitious targets to increase installed hydro to 5,690MW, thermal over 20,000 MW, 1000 MW of renewable generation capacities by 2020<ref name="The Presidency of the Federal Republic of Nigeria, August 2013, Roadmap for Power Sector Reform, Revision1, p. 24-25">The Presidency of the Federal Republic of Nigeria, August 2013, Roadmap for Power Sector Reform, Revision1, p. 24-25</ref>. The targets also aim at diversifying Nigeria’s energy mix to reduce its gas dependence.<br/><br/>As an emergency solution, many Electricity Distribution Companies (through Independent Power Producers – IPPs) and States are currently investing in embedded generation (medium scale generation, generally less than 20MW, directly connected to the distribution network). There are 3 licenses for embedded generation with a total installed capacity of 133 MW<ref name="For further information, please refer to NERC website: http://www.nercng.org/index.php/industry-operators/licensing-procedures/licencees">For further information, please refer to NERC website: http://www.nercng.org/index.php/industry-operators/licensing-procedures/licencees</ref>. Examples are the Eko Electricity Distribution Company that launched a bidding process for several IPP gas power plants below 20 MW or the Sokoto State Government that is in the process of finalizing the construction of a 38 MW diesel power plant (to be then converted into gas). Another example is NESCO, a company based in Plateau that has been operating a small-hydropower plant as an IPP since 1993 and from which the State Government buys electricity in bulk<ref name="Plateau State Government, Investment Profile for Plateau State – Companies and Projects, p. 33">Plateau State Government, Investment Profile for Plateau State – Companies and Projects, p. 33</ref>.<br/><br/>Nigeria has vast oil (37.2 billion barrels as of 2012) and gas (5.2 trillion cubic metres as of 2012) resources that could be exploited to increase its generation capacity. As of mid-2014, four thermal power plants were being constructed: Calabar Generation Company Ltd (634 MW), Egbema Generation Company Ltd (381 MW), Gbarain Generation Company Ltd (254 MW) and Omoku Generation Company Ltd (265 MW). Other large gas power plants are being planned such as the 459 MW Azura Edo IPP or the 533 MW Qua Iboe IPP (QIPP) projects<ref name="Nigerian Energy Support Programme, To be published, The Nigerian Energy Sector - an Overview with a Special Emphasis on Renewable Energy, Energy Efficiency and Rural Electrification">Nigerian Energy Support Programme, To be published, The Nigerian Energy Sector - an Overview with a Special Emphasis on Renewable Energy, Energy Efficiency and Rural Electrification</ref>. Nigeria also envisages the use of its coal reserves to produce power. The country also aspires to generate power from nuclear.<br/><br/>As shown in the table below, in addition, the country is endowed with vast renewable energy wealth which the authorities also intend to utilize for generation purposes.<br/><span style="color: rgb(255, 0, 0); line-height: 1.5em; font-size: 0.85em;">Table missing</span><br/><br/>A 10 MW pilot wind plant has been built in Katsina and is awaiting commissioning. One major hydropower plant is now under development, the Zungeru 700 MW plant in Niger State. A number of smaller hydropower plants are also being planned such as Gurara (30 MW) or Kashimbilla (40 MW). The 3,050 MW Mambilla hydropower plant project is currently being reviewed. In addition, NERC has issued licenses for 8 solar projects totaling a capacity of 868 MW and a 100 MW wind park<ref name="Nigerian Energy Support Programme, To be published, The Nigerian Energy Sector - an Overview with a Special Emphasis on Renewable Energy, Energy Efficiency and Rural Electrification">Nigerian Energy Support Programme, To be published, The Nigerian Energy Sector - an Overview with a Special Emphasis on Renewable Energy, Energy Efficiency and Rural Electrification</ref>. There are many prospectors interested in developing large solar plants.<br/><br/>[[Nigeria Energy Situation#toc|►Go to top]] |
| − | <br/>
| + | |
| − | <br/> | + | |
| | == Transmission and distribution network<br/> == | | == Transmission and distribution network<br/> == |
| | | | |
| | === State<br/> === | | === State<br/> === |
| − | The National grid has an installed capacity of 5,758 MW, but its effective wheeling capacity lies at about 4,500 MW<ref name="Presidential Taskforce on Power, January 2014, Maintaining Service Delivery & The Early Stabilisation Of The Infant Privatised Nigerian Electricity Supply Market, 6th Nigeria Power Summit">Presidential Taskforce on Power, January 2014, Maintaining Service Delivery & The Early Stabilisation Of The Infant Privatised Nigerian Electricity Supply Market, 6th Nigeria Power Summit</ref>. The transmission network has a total length of 12,300 km (330 kV 5,650 km, 132 kV 6.687 km)<ref name="Engr. A.S.A. Bada, The Future of TCN: Ensuring Professional Management of and Investment in the Transmission Network">Engr. A.S.A. Bada, The Future of TCN: Ensuring Professional Management of and Investment in the Transmission Network</ref> and and connects 32 330 kV and 105 132 kV substations<ref name="Nigerian Energy Support Programme, To be published, The Nigerian Energy Sector - an Overview with a Special Emphasis on Renewable Energy, Energy Efficiency and Rural Electrification p.39 quoting TCN, January 2010, Investors’ forum for the privatisation of PHCN successor companies">Nigerian Energy Support Programme, To be published, The Nigerian Energy Sector - an Overview with a Special Emphasis on Renewable Energy, Energy Efficiency and Rural Electrification p.39 quoting TCN, January 2010, Investors’ forum for the privatisation of PHCN successor companies</ref>. It is managed by the Government owned Transmission Company of Nigeria (TCN). The Government has contracted Manitoba Hydro International (MHI) to operate it.<br/><br/>The distribution network has a length of 224,838 km (taking into consideration 33KV, 11KV and LV lines overhead and cables. As part of the power sector reform, the network was split into 11 distribution zones, each of them now owned and managed by a different Electricity Distribution Company (DisCo), with the exception of the Kaduna whose privatization process is still ongoing.<br/><br/>Ikeja is the one with the longest grid (36,585 km), while Kano is the one with the shortest (7,404 km) and the highest losses (40%). The Ibadan network is the one with the highest capacity (878 MW) and highest number of customers (812,000 customers), while Ikeja is the one with the highest peak demand (1,400 MW) due to the high concentration of economic activities in Lagos. The table below includes information on the distribution network per DisCo:<br/><br/><span style="color:#FF0000">Table missing</span><br/><br/>At the end of 2014, there also were 138 companies with licenses as metering service providers; of which, 5 certified as meter manufacturers; 13 companies as importers, 28 companies as meter vendors, 13 companies as individual meter installers and 79 as corporate installers<ref name="Vanguard, 13 November 2014, Nigeria licenses 138 companies to provide electricity meters">Vanguard, 13 November 2014, Nigeria licenses 138 companies to provide electricity meters </ref>.<br/><br/> | + | The National grid has an installed capacity of 5,758 MW, but its effective wheeling capacity lies at about 4,500 MW<ref name="Presidential Taskforce on Power, January 2014, Maintaining Service Delivery & The Early Stabilisation Of The Infant Privatised Nigerian Electricity Supply Market, 6th Nigeria Power Summit">Presidential Taskforce on Power, January 2014, Maintaining Service Delivery & The Early Stabilisation Of The Infant Privatised Nigerian Electricity Supply Market, 6th Nigeria Power Summit</ref>. The transmission network has a total length of 12,300 km (330 kV 5,650 km, 132 kV 6.687 km)<ref name="Engr. A.S.A. Bada, The Future of TCN: Ensuring Professional Management of and Investment in the Transmission Network">Engr. A.S.A. Bada, The Future of TCN: Ensuring Professional Management of and Investment in the Transmission Network</ref> and and connects 32 330 kV and 105 132 kV substations<ref name="Nigerian Energy Support Programme, To be published, The Nigerian Energy Sector - an Overview with a Special Emphasis on Renewable Energy, Energy Efficiency and Rural Electrification p.39 quoting TCN, January 2010, Investors’ forum for the privatisation of PHCN successor companies">Nigerian Energy Support Programme, To be published, The Nigerian Energy Sector - an Overview with a Special Emphasis on Renewable Energy, Energy Efficiency and Rural Electrification p.39 quoting TCN, January 2010, Investors’ forum for the privatisation of PHCN successor companies</ref>. It is managed by the Government owned Transmission Company of Nigeria (TCN). The Government has contracted Manitoba Hydro International (MHI) to operate it.<br/><br/>The distribution network has a length of 224,838 km (taking into consideration 33KV, 11KV and LV lines overhead and cables. As part of the power sector reform, the network was split into 11 distribution zones, each of them now owned and managed by a different Electricity Distribution Company (DisCo), with the exception of the Kaduna whose privatization process is still ongoing.<br/><br/>Ikeja is the one with the longest grid (36,585 km), while Kano is the one with the shortest (7,404 km) and the highest losses (40%). The Ibadan network is the one with the highest capacity (878 MW) and highest number of customers (812,000 customers), while Ikeja is the one with the highest peak demand (1,400 MW) due to the high concentration of economic activities in Lagos. The table below includes information on the distribution network per DisCo:<br/><br/><span style="color:#FF0000">Table missing</span><br/><br/>At the end of 2014, there also were 138 companies with licenses as metering service providers; of which, 5 certified as meter manufacturers; 13 companies as importers, 28 companies as meter vendors, 13 companies as individual meter installers and 79 as corporate installers<ref name="Vanguard, 13 November 2014, Nigeria licenses 138 companies to provide electricity meters">Vanguard, 13 November 2014, Nigeria licenses 138 companies to provide electricity meters </ref>.<br/><br/>[[Nigeria Energy Situation#toc|►Go to top]]<br/> |
| | === Challenges<br/> === | | === Challenges<br/> === |
| − | Due to poor maintenance and vandalization, the transmission network is currently overloaded and experiences losses of 25%, which are particularly high in the north<ref name="Anjeed Innova Group, August 2014, Nigerian Power Sector Report, p. 32">Anjeed Innova Group, August 2014, Nigerian Power Sector Report, p. 32</ref>. The radial network is unreliable and contributes to a high number of system collapses. The distribution grid also suffers from high technical and non-technical losses, a poor maintenance regime which is further aggravated by the fact that there is not centralized and automatized control system and low fee collection efficiency which results directly from the low number of installed metering systems are the main problems on the distribution level.<br/><br/>Nigeria’s average electricity consumption per inhabitant is only 150 kWh per capita, one of the lowest in the world<ref name="Ewah Otu Eleri, Okechukwu Ugwu & Precious Onuvae, October 2012, Expanding Access to Pro-Poor Energy Services in Nigeria, International Centre for Energy, Environment & Development and Christian Aid, p. 3 quoting National Bureau of Statistics, Nigeria Poverty Profile 2010, Little Green Data Book 2011">Ewah Otu Eleri, Okechukwu Ugwu & Precious Onuvae, October 2012, Expanding Access to Pro-Poor Energy Services in Nigeria, International Centre for Energy, Environment & Development and Christian Aid, p. 3 quoting National Bureau of Statistics, Nigeria Poverty Profile 2010, Little Green Data Book 2011</ref>. It is estimated that, in 2011, grid-connected customers suffered an average of 28 blackouts per day<ref name="Ewah Otu Eleri, Okechukwu Ugwu & Precious Onuvae, October 2012, Expanding Access to Pro-Poor Energy Services in Nigeria, International Centre for Energy, Environment & Development and Christian Aid, p. 3 quoting National Bureau of Statistics, Nigeria Poverty Profile 2010, Little Green Data Book 2011">Ewah Otu Eleri, Okechukwu Ugwu & Precious Onuvae, October 2012, Expanding Access to Pro-Poor Energy Services in Nigeria, International Centre for Energy, Environment & Development and Christian Aid, p. 3 quoting National Bureau of Statistics, Nigeria Poverty Profile 2010, Little Green Data Book 2011</ref>. Regular brown-outs also make necessary the use of stabilizers in order to protect the electronic equipment.<br/><br/>This situation does not only affect the population’s living standards, but it is also often mentioned as the biggest barrier to the country’s economic development. The closure of industries such as textile factories in the 1990s in states like Kaduna, Kano or Lagos is often cited as a proof of the effect of de-industrialization caused by an unstable power network<ref name="Power Holding Company of Nigeria – Project Management Unit, January 2009, National Load Demand System – National Energy Development Project – Draft final report Volume 1 – National Demand Load Forecast, Tractebel Engineering Suez and Omega Systems, p. 16">Power Holding Company of Nigeria – Project Management Unit, January 2009, National Load Demand System – National Energy Development Project – Draft final report Volume 1 – National Demand Load Forecast, Tractebel Engineering Suez and Omega Systems, p. 16</ref>. The Council for Renewable Energy of Nigeria (CREN) estimated in 2009 that power outages brought an annual loss of about 126 billion naira (US$ 984.38 million)<ref name="Council for Renewable Energy, Nigeria, “Nigeria’s Electricity Crunch” available at www.renewablenigeria.org">Council for Renewable Energy, Nigeria, “Nigeria’s Electricity Crunch” available at www.renewablenigeria.org</ref>. Additionally, Nigeria remains one of the most difficult countries when it comes to obtaining an electricity connection with an estimated time duration of 260 days and a cost of 960% of income per capita<ref name="World Bank and International Finance Corporation, 2013, Doing Business 2014 – Economy Profile – Nigeria">World Bank and International Finance Corporation, 2013, Doing Business 2014 – Economy Profile – Nigeria</ref>.<br/> | + | Due to poor maintenance and vandalization, the transmission network is currently overloaded and experiences losses of 25%, which are particularly high in the north<ref name="Anjeed Innova Group, August 2014, Nigerian Power Sector Report, p. 32">Anjeed Innova Group, August 2014, Nigerian Power Sector Report, p. 32</ref>. The radial network is unreliable and contributes to a high number of system collapses. The distribution grid also suffers from high technical and non-technical losses, a poor maintenance regime which is further aggravated by the fact that there is not centralized and automatized control system and low fee collection efficiency which results directly from the low number of installed metering systems are the main problems on the distribution level.<br/><br/>Nigeria’s average electricity consumption per inhabitant is only 150 kWh per capita, one of the lowest in the world<ref name="Ewah Otu Eleri, Okechukwu Ugwu & Precious Onuvae, October 2012, Expanding Access to Pro-Poor Energy Services in Nigeria, International Centre for Energy, Environment & Development and Christian Aid, p. 3 quoting National Bureau of Statistics, Nigeria Poverty Profile 2010, Little Green Data Book 2011">Ewah Otu Eleri, Okechukwu Ugwu & Precious Onuvae, October 2012, Expanding Access to Pro-Poor Energy Services in Nigeria, International Centre for Energy, Environment & Development and Christian Aid, p. 3 quoting National Bureau of Statistics, Nigeria Poverty Profile 2010, Little Green Data Book 2011</ref>. It is estimated that, in 2011, grid-connected customers suffered an average of 28 blackouts per day<ref name="Ewah Otu Eleri, Okechukwu Ugwu & Precious Onuvae, October 2012, Expanding Access to Pro-Poor Energy Services in Nigeria, International Centre for Energy, Environment & Development and Christian Aid, p. 3 quoting National Bureau of Statistics, Nigeria Poverty Profile 2010, Little Green Data Book 2011">Ewah Otu Eleri, Okechukwu Ugwu & Precious Onuvae, October 2012, Expanding Access to Pro-Poor Energy Services in Nigeria, International Centre for Energy, Environment & Development and Christian Aid, p. 3 quoting National Bureau of Statistics, Nigeria Poverty Profile 2010, Little Green Data Book 2011</ref>. Regular brown-outs also make necessary the use of stabilizers in order to protect the electronic equipment.<br/><br/>This situation does not only affect the population’s living standards, but it is also often mentioned as the biggest barrier to the country’s economic development. The closure of industries such as textile factories in the 1990s in states like Kaduna, Kano or Lagos is often cited as a proof of the effect of de-industrialization caused by an unstable power network<ref name="Power Holding Company of Nigeria – Project Management Unit, January 2009, National Load Demand System – National Energy Development Project – Draft final report Volume 1 – National Demand Load Forecast, Tractebel Engineering Suez and Omega Systems, p. 16">Power Holding Company of Nigeria – Project Management Unit, January 2009, National Load Demand System – National Energy Development Project – Draft final report Volume 1 – National Demand Load Forecast, Tractebel Engineering Suez and Omega Systems, p. 16</ref>. The Council for Renewable Energy of Nigeria (CREN) estimated in 2009 that power outages brought an annual loss of about 126 billion naira (US$ 984.38 million)<ref name="Council for Renewable Energy, Nigeria, “Nigeria’s Electricity Crunch” available at www.renewablenigeria.org">Council for Renewable Energy, Nigeria, “Nigeria’s Electricity Crunch” available at www.renewablenigeria.org</ref>. Additionally, Nigeria remains one of the most difficult countries when it comes to obtaining an electricity connection with an estimated time duration of 260 days and a cost of 960% of income per capita<ref name="World Bank and International Finance Corporation, 2013, Doing Business 2014 – Economy Profile – Nigeria">World Bank and International Finance Corporation, 2013, Doing Business 2014 – Economy Profile – Nigeria</ref>.<br/>[[Nigeria Energy Situation#toc|►Go to top]] |
| | === Plans === | | === Plans === |
| − | A Network Expansion Blueprint was created in 2013 for the transmission framework. The study estimates the need for a capacity of 16,000 MW by 2017. As a result, TCN is currently refurbishing the transmission network and has launched over 165 on-going projects<ref name="Anjeed Innova Group, August 2014, Nigerian Power Sector Report, p. 32">Anjeed Innova Group, August 2014, Nigerian Power Sector Report, p. 32</ref>. Several hundreds of projects are already ongoing, including a project to create a super grid of 700 KV all around Nigeria<ref name="Engr. A.S.A. Bada, The Future of TCN: Ensuring Professional Management of and Investment in the Transmission Network">Engr. A.S.A. Bada, The Future of TCN: Ensuring Professional Management of and Investment in the Transmission Network</ref>.<br/><br/>The Roadmap for Power Sector Reform also includes targets for the increase in the distribution capacity of 32,774 MW by 2020<ref name="The Presidency of the Federal Republic of Nigeria, 2010, Roadmap for Power Sector Reform, p. 37">The Presidency of the Federal Republic of Nigeria, 2010, Roadmap for Power Sector Reform, p. 37</ref>. While the plans for the realization of the transmission targets are developed on a centralized level at the Transmission Company of Nigeria (TCN), the achievement of distribution capacity targets will require the joint efforts of the 11 distribution companies. Progress made by the distribution company in this regard is the responsibility of the Nigerian Electricity Regulatory Commission which negotiates targets on grid expansion and densification as well as loss reduction on annual basis through the Key Performance Indicators (for more information, please refer to the chapter on regulation). | + | A Network Expansion Blueprint was created in 2013 for the transmission framework. The study estimates the need for a capacity of 16,000 MW by 2017. As a result, TCN is currently refurbishing the transmission network and has launched over 165 on-going projects<ref name="Anjeed Innova Group, August 2014, Nigerian Power Sector Report, p. 32">Anjeed Innova Group, August 2014, Nigerian Power Sector Report, p. 32</ref>. Several hundreds of projects are already ongoing, including a project to create a super grid of 700 KV all around Nigeria<ref name="Engr. A.S.A. Bada, The Future of TCN: Ensuring Professional Management of and Investment in the Transmission Network">Engr. A.S.A. Bada, The Future of TCN: Ensuring Professional Management of and Investment in the Transmission Network</ref>.<br/><br/>The Roadmap for Power Sector Reform also includes targets for the increase in the distribution capacity of 32,774 MW by 2020<ref name="The Presidency of the Federal Republic of Nigeria, 2010, Roadmap for Power Sector Reform, p. 37">The Presidency of the Federal Republic of Nigeria, 2010, Roadmap for Power Sector Reform, p. 37</ref>. While the plans for the realization of the transmission targets are developed on a centralized level at the Transmission Company of Nigeria (TCN), the achievement of distribution capacity targets will require the joint efforts of the 11 distribution companies. Progress made by the distribution company in this regard is the responsibility of the Nigerian Electricity Regulatory Commission which negotiates targets on grid expansion and densification as well as loss reduction on annual basis through the Key Performance Indicators (for more information, please refer to the chapter on regulation)<br/><br/>[[Nigeria Energy Situation#toc|►Go to top]] |
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| | == Off-grid and self-generation == | | == Off-grid and self-generation == |
| − | Electrification trends, particularly for rural remote areas, have not progressed as fast as they were expected. In addition to the high demographic pressure, the strong focus on grid extension of the Federal and State Government’s electrification programmes raising substantially project costs for low density and remote areas with low consumption and capacity to pay is often mentioned as one of the reasons. This has been further aggravated by high levels of political interference when it comes to the prioritization of areas to be electrified. Intra- and inter-community conflicts have also resulted in delays in the country’s electrification programme.<br/> | + | Electrification trends, particularly for rural remote areas, have not progressed as fast as they were expected. In addition to the high demographic pressure, the strong focus on grid extension of the Federal and State Government’s electrification programmes raising substantially project costs for low density and remote areas with low consumption and capacity to pay is often mentioned as one of the reasons. This has been further aggravated by high levels of political interference when it comes to the prioritization of areas to be electrified. Intra- and inter-community conflicts have also resulted in delays in the country’s electrification programme.<br/><br/>Recurrent unscheduled blackouts have pushed the population and businesses to invest in self-generation. It is estimated that only 50% of the electricity generated comes from the grid, while the other half is generated from individual power sources, generally small petrol/diesel generators. In 2009 the total capacity of individual power sources from petrol and diesel generators was conservatively estimated at 6000 MW<ref name="The Presidency of the Federal Republic of Nigeria, 2010, Roadmap for Power Sector Reform, p. 17">The Presidency of the Federal Republic of Nigeria, 2010, Roadmap for Power Sector Reform, p. 17</ref>. In 2006, the Federal Capital Territory, Lagos and the South-South and South East, particularly the Niger Delta states (Delta, Bayelsa and Rivers), were the ones with the highest concentration of generators<ref name="Power Holding Company of Nigeria – Project Management Unit, January 2009, National Load Demand System – National Energy Development Project – Draft final report Volume 1 – National Demand Load Forecast, Tractebel Engineering Suez and Omega Systems, p. 50 quoting National Bureau of Statistics, 2006, Core Welfare Indicator Questionnaire Survey">Power Holding Company of Nigeria – Project Management Unit, January 2009, National Load Demand System – National Energy Development Project – Draft final report Volume 1 – National Demand Load Forecast, Tractebel Engineering Suez and Omega Systems, p. 50 quoting National Bureau of Statistics, 2006, Core Welfare Indicator Questionnaire Survey</ref>.<br/><br/>Businesses are the ones that have invested the most on self-generation. Actually, there are 20 licenses summing up a total capacity of 305.5 MW for off-grid (self) generation, most of them for industries. There is also one license for off-grid distribution which covers certain areas of Ogun State where the National Grid does not reach<ref name="Please refer to NERC: http://www.nercng.org/index.php/industry-operators/licensing-procedures/licencees">Please refer to NERC: http://www.nercng.org/index.php/industry-operators/licensing-procedures/licencees</ref>.<br/><br/>Off-grid electrification using conventional sources dates back to the 1970s when the Federal Government through its Rural Electrification Programme decided to electrify all Local Government Areas Headquarters that were off-grid with off-grid diesel powered generated systems.<br/><br/>Renewable energy based off-grid electrification is more recent. In the 1990s, the Energy Commission of Nigeria (ECN) and the former Federal Ministry of Power and Steel pioneered the installation of off-grid PV in Nigeria, including mini-grids and stand-alone systems for residential, irrigation and cooling purposes<ref name="For further information, please see JICA, February 2007, The Master Plan Study for Utilization of Solar Energy in the Federal Republic of Nigeria, Final Report, Volume 1 p. ii">For further information, please see JICA, February 2007, The Master Plan Study for Utilization of Solar Energy in the Federal Republic of Nigeria, Final Report, Volume 1 p. ii</ref>. More recently, the Rural Electrification Agency (REA) and the Federal Ministry of Environment (FME) have also started developing these projects. The Federal Ministry of Power also launched the initiative Light-up Rural Nigeria.<br/><br/>Although States’ electrification interventions, focus mainly on grid extension, some have also installed off-grid PV water pumping systems and off-grid PV street lighting. Some of them have implemented some off-grid PV village electrification projects together with the private sector.<br/><br/>From a preliminary survey including 6 companies carried out by the Nigerian Energy Support Programme (NESP) in 2014, all together these companies had installed about 1 MW of off-grid PV combining mini-grids and stand-alone systems. Most of them have been installed for residential or commercial purposes in un-electrified rural areas, but there are also some that have been built in grid connected areas as grid backup systems. Most of the mentioned projects were installed using full grants from international donors or the federal, state and local levels.<br/><br/>Small wind turbines for water pumping have also been installed in some parts of the country for testing. For instance, the Sokoto Energy Research Centre (SERC) installed a turbine in Sayya Gidan Gada Village, Sokoto. SERC, together with the World Bank (WB), ECN and the Sokoto Government, installed a hybrid mini-grid combining 10 kW solar and 2 kW wind in Danjawa Village, Sokoto. Other technologies such as off-grid PV street lighting have also been tested in Danjawa.<br/><br/>There are as well some experiences with regards to small hydropower. One of the main actors in this regard is the United Nations Industrial development Organization (UNIDO) and its International Small Hydropower Regional Centre and to a lesser extent the United Nations Development Programme (UNDP). Examples of projects developed by latter are Evboro II pico-hydropower plant in Edo State, the 70 kW micro-hydropower plant in Osun, installed using NASENI’s local turbine technology, or the 400 kW mini-hydropower plant in Taraba State. All the above mentioned hydropower projects will be used mainly for village electrification with the exception of the last one which will be used for self-generation at a beverage company. Excess power will be sent to the surrounding villages. The Energy Commission of Nigeria has also installed a pico-hydropower pilot project in Nasarawa to test the kinetic turbine technology. With regards to biomass, there is information of a 5 MW biomass powered mini-grid project by UNIDO, but there is no information as to what is the stage of the project.<br/><br/>[[Nigeria Energy Situation#toc|►Go to top]] |
| − | <br/> | + | |
| − | Recurrent unscheduled blackouts have pushed the population and businesses to invest in self-generation. It is estimated that only 50% of the electricity generated comes from the grid, while the other half is generated from individual power sources, generally small petrol/diesel generators. In 2009 the total capacity of individual power sources from petrol and diesel generators was conservatively estimated at 6000 MW<ref name="The Presidency of the Federal Republic of Nigeria, 2010, Roadmap for Power Sector Reform, p. 17">The Presidency of the Federal Republic of Nigeria, 2010, Roadmap for Power Sector Reform, p. 17</ref>. In 2006, the Federal Capital Territory, Lagos and the South-South and South East, particularly the Niger Delta states (Delta, Bayelsa and Rivers), were the ones with the highest concentration of generators<ref name="Power Holding Company of Nigeria – Project Management Unit, January 2009, National Load Demand System – National Energy Development Project – Draft final report Volume 1 – National Demand Load Forecast, Tractebel Engineering Suez and Omega Systems, p. 50 quoting National Bureau of Statistics, 2006, Core Welfare Indicator Questionnaire Survey">Power Holding Company of Nigeria – Project Management Unit, January 2009, National Load Demand System – National Energy Development Project – Draft final report Volume 1 – National Demand Load Forecast, Tractebel Engineering Suez and Omega Systems, p. 50 quoting National Bureau of Statistics, 2006, Core Welfare Indicator Questionnaire Survey</ref>. <br/> | + | |
| − | <br/> | + | |
| − | Businesses are the ones that have invested the most on self-generation. Actually, there are 20 licenses summing up a total capacity of 305.5 MW for off-grid (self) generation, most of them for industries. There is also one license for off-grid distribution which covers certain areas of Ogun State where the National Grid does not reach<ref name="Please refer to NERC: http://www.nercng.org/index.php/industry-operators/licensing-procedures/licencees">Please refer to NERC: http://www.nercng.org/index.php/industry-operators/licensing-procedures/licencees</ref>. <br/> | + | |
| − | <br/> | + | |
| − | Off-grid electrification using conventional sources dates back to the 1970s when the Federal Government through its Rural Electrification Programme decided to electrify all Local Government Areas Headquarters that were off-grid with off-grid diesel powered generated systems. <br/> | + | |
| − | <br/> | + | |
| − | Renewable energy based off-grid electrification is more recent. In the 1990s, the Energy Commission of Nigeria (ECN) and the former Federal Ministry of Power and Steel pioneered the installation of off-grid PV in Nigeria, including mini-grids and stand-alone systems for residential, irrigation and cooling purposes<ref name="For further information, please see JICA, February 2007, The Master Plan Study for Utilization of Solar Energy in the Federal Republic of Nigeria, Final Report, Volume 1 p. ii">For further information, please see JICA, February 2007, The Master Plan Study for Utilization of Solar Energy in the Federal Republic of Nigeria, Final Report, Volume 1 p. ii</ref>. More recently, the Rural Electrification Agency (REA) and the Federal Ministry of Environment (FME) have also started developing these projects. The Federal Ministry of Power also launched the initiative Light-up Rural Nigeria. <br/> | + | |
| − | <br/> | + | |
| − | Although States’ electrification interventions, focus mainly on grid extension, some have also installed off-grid PV water pumping systems and off-grid PV street lighting. Some of them have implemented some off-grid PV village electrification projects together with the private sector. <br/> | + | |
| − | <br/> | + | |
| − | From a preliminary survey including 6 companies carried out by the Nigerian Energy Support Programme (NESP) in 2014, all together these companies had installed about 1 MW of off-grid PV combining mini-grids and stand-alone systems. Most of them have been installed for residential or commercial purposes in un-electrified rural areas, but there are also some that have been built in grid connected areas as grid backup systems. Most of the mentioned projects were installed using full grants from international donors or the federal, state and local levels.<br/> | + | |
| − | <br/> | + | |
| − | Small wind turbines for water pumping have also been installed in some parts of the country for testing. For instance, the Sokoto Energy Research Centre (SERC) installed a turbine in Sayya Gidan Gada Village, Sokoto. SERC, together with the World Bank (WB), ECN and the Sokoto Government, installed a hybrid mini-grid combining 10 kW solar and 2 kW wind in Danjawa Village, Sokoto. Other technologies such as off-grid PV street lighting have also been tested in Danjawa. <br/> | + | |
| − | <br/> | + | |
| − | There are as well some experiences with regards to small hydropower. One of the main actors in this regard is the United Nations Industrial development Organization (UNIDO) and its International Small Hydropower Regional Centre and to a lesser extent the United Nations Development Programme (UNDP). Examples of projects developed by latter are Evboro II pico-hydropower plant in Edo State, the 70 kW micro-hydropower plant in Osun, installed using NASENI’s local turbine technology, or the 400 kW mini-hydropower plant in Taraba State. All the above mentioned hydropower projects will be used mainly for village electrification with the exception of the last one which will be used for self-generation at a beverage company. Excess power will be sent to the surrounding villages. The Energy Commission of Nigeria has also installed a pico-hydropower pilot project in Nasarawa to test the kinetic turbine technology. With regards to biomass, there is information of a 5 MW biomass powered mini-grid project by UNIDO, but there is no information as to what is the stage of the project. | + | |
| | === Challenges === | | === Challenges === |
| − | The self-generation sector using diesel/petrol generator sets is at an advance state of maturity and functions strictly on a commercial basis. On the contrary, due to the low retail prices of diesel and petrol and low levels of end-user awareness, the renewable energy sector remains in its infancy and nearly completely dependent on grants. Most of the rural electrification projects have failed due to the lack of sound business models. Systems are normally installed without having carried out a thorough assessment of end-user needs. Systems are generally handed over to beneficiaries for operations and maintenance without prior training. In spite of the high dependence of the off-grid renewable energy sector on public support, the sector’s framework remains unfinished without a rural electrification fund or a regulatory framework. | + | The self-generation sector using diesel/petrol generator sets is at an advance state of maturity and functions strictly on a commercial basis. On the contrary, due to the low retail prices of diesel and petrol and low levels of end-user awareness, the renewable energy sector remains in its infancy and nearly completely dependent on grants. Most of the rural electrification projects have failed due to the lack of sound business models. Systems are normally installed without having carried out a thorough assessment of end-user needs. Systems are generally handed over to beneficiaries for operations and maintenance without prior training. In spite of the high dependence of the off-grid renewable energy sector on public support, the sector’s framework remains unfinished without a rural electrification fund or a regulatory framework.<br/><br/>[[Nigeria Energy Situation#toc|►Go to top]] |
| | === Plans === | | === Plans === |
| − | There is strong political commitment from the Federal Authorities through the FMP and the REA as well as from the State Authorities. No concrete electrification plans have been developed. However, initiatives such as Light-up Rural Nigeria launched by the FMP are planning on developing a number of solar mini-grids over the next years.<br/> | + | There is strong political commitment from the Federal Authorities through the FMP and the REA as well as from the State Authorities. No concrete electrification plans have been developed. However, initiatives such as Light-up Rural Nigeria launched by the FMP are planning on developing a number of solar mini-grids over the next years.<br/><br/>[[Nigeria Energy Situation#toc|►Go to top]] |
| | | | |
| | | | |
Nigeria is a federal republic comprising 36 states and the Federal Capital Territory. The country has a surface of nearly 1 million km2 and a population of about 170 million growing at an average of 2% annually. The economy, heavily dependent on the export of oil products, grows at an average of 6% annually. The country enjoys a tropical climate in the south and central belt and an arid/semi-arid climate in the north. It is endowed with vast natural resources; oil and gas, solar (particularly in the north), hydropower (incl. 277 small hydro identified sites with a cumulative potential of 3,500 MW) and wind (mainly in the north and along the coastal line).
Actually, biomass is the dominant energy source in Nigeria due to the fact that most of the country’s population use it for cooking. According to
, little progress has been made with regards to providing access to non-solid cooking fuels since 1990. As visible in the figure below, in 2010, only 26% of the population had access to non-solid cooking fuels with a big difference between urban and rural areas
With a marginal share of 2% in the total final energy consumption, electricity remains a secondary source of energy in Nigeria. Only about 9% of the household’s total energy consumption which, as previously shown, is driven by the use of biomass[3].
As of 2008, there were a total of 4,747,870 registered customers connected to the distribution grid[4]. Electricity consumption from residential and commercial sectors represented 80% of the total electricity demand. The rest was covered by the Industrial, Street Lighting and Special Tariff sectors. The share of large consumers, such as industry or large commercial areas, only represented 1% of the total electricity consumption[5].
As shown in the graph below, compared to the other West African countries, Nigeria’s electrification rates are relatively high, but have progressed at a relatively slower pace. In 2010, electrification rates were at 48% and had only increased by 5% since the early 1990s[6].
Figure missing
As it can be seen in the figure below, the gap between rural and urban electrification rates is lower than in other West African countries, but remains significant (Rural: 35% and Urban: 62%)[6].
Access rates also vary substantially amongst the states of Nigeria. For instance, according to the projections of the Japanese International Cooperation Agency (JICA), Taraba State had the lowest electrification rate in 2010 with 21% and Lagos the highest with 96%. Out of the 13 states that registered the lowest electrification rates, 10 were located in the North-West and North-East. The 8 states with the highest electrification rates were located in the South-West or South-South. The table below presents an overview of the state of electrification per state:
Figure missing
As a result of high economic growth and demographic pressure, in 2008, the Energy Commission of Nigeria (ECN) together with the International Atomic Energy Agency (IAEA) projected a demand of 15,730 MW for 2010 and 119,200 MW for 2030 under the reference scenario (7% yearly economic growth)As a result of high economic growth and demographic pressure, in 2008, the Energy Commission of Nigeria (ECN) together with the International Atomic Energy Agency (IAEA) projected a demand of 15,730 MW for 2010 and 119,200 MW for 2030 under the reference scenario (7% yearly economic growth)[7]. Other actors like the defunct Power Holding Company of Nigeria (PHCN)[8] or or World Alliance for Decentralized Energy (WADE) et al. have also developed scenarios[9]. The results of these studies vary widely, but they all conclude that the current gap between supply and demand is already very substantial (1:3) and that, it will continue widening if under a business as usual scenario.
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Installed capacity increased by 5,600 MW over the period 1968 to 1991. However, the lack of significant investment in maintenance of the existing and in the construction of new infrastructure in the 1990s resulted in the decrease of capacity throughout the 1990s and 2000s. As of mid-2014, there were a total of 56 licenses for on-grid generation, 36 on-grid IPP licenses with a total on-grid generation capacity of 19,407 MW, mostly thermal generation installed in the South of the country where the oil and gas fields are located. However, out of this figure, only 11,774 MW have been built. Due to poor maintenance, only 6164.13 MW are currently available.
Most of the generation capacity is based on natural gas. The share of large hydropower has decreased due to the Government’s focus on thermal. This trend is expected to continue in the future. The thermal/hydro mix is 85.5/14.5 for the installed capacity and 83.5/16.5 for the available generation capacity. Regular gas supply shortages, which are the result of vandalization and unattractive gas supply tariffs, further contribute to the reduction in the total available generation which was estimated at 3,600 MW in December of 2013[10]. The table below includes the list of on-grid generation plants in Nigeria:
Table missing
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As previously mentioned, the big gap between demand and supply, has led to recurrent power shortcuts. The fast growth in the power demand due to high demographic pressure and economic development make the task of bridging the gap even more challenging. The heavy reliance of Nigeria’s power sector on gas and the issues affecting the regular gas supply to the generation plants represent an additional challenge.
In order to bring a solution to this problem, the Government, in its Power Sector Reform Roadmap, sets the ambitious targets to increase installed hydro to 5,690MW, thermal over 20,000 MW, 1000 MW of renewable generation capacities by 2020[11]. The targets also aim at diversifying Nigeria’s energy mix to reduce its gas dependence.
As an emergency solution, many Electricity Distribution Companies (through Independent Power Producers – IPPs) and States are currently investing in embedded generation (medium scale generation, generally less than 20MW, directly connected to the distribution network). There are 3 licenses for embedded generation with a total installed capacity of 133 MW[12]. Examples are the Eko Electricity Distribution Company that launched a bidding process for several IPP gas power plants below 20 MW or the Sokoto State Government that is in the process of finalizing the construction of a 38 MW diesel power plant (to be then converted into gas). Another example is NESCO, a company based in Plateau that has been operating a small-hydropower plant as an IPP since 1993 and from which the State Government buys electricity in bulk[13].
Nigeria has vast oil (37.2 billion barrels as of 2012) and gas (5.2 trillion cubic metres as of 2012) resources that could be exploited to increase its generation capacity. As of mid-2014, four thermal power plants were being constructed: Calabar Generation Company Ltd (634 MW), Egbema Generation Company Ltd (381 MW), Gbarain Generation Company Ltd (254 MW) and Omoku Generation Company Ltd (265 MW). Other large gas power plants are being planned such as the 459 MW Azura Edo IPP or the 533 MW Qua Iboe IPP (QIPP) projects[14]. Nigeria also envisages the use of its coal reserves to produce power. The country also aspires to generate power from nuclear.
As shown in the table below, in addition, the country is endowed with vast renewable energy wealth which the authorities also intend to utilize for generation purposes.
Table missing
A 10 MW pilot wind plant has been built in Katsina and is awaiting commissioning. One major hydropower plant is now under development, the Zungeru 700 MW plant in Niger State. A number of smaller hydropower plants are also being planned such as Gurara (30 MW) or Kashimbilla (40 MW). The 3,050 MW Mambilla hydropower plant project is currently being reviewed. In addition, NERC has issued licenses for 8 solar projects totaling a capacity of 868 MW and a 100 MW wind park[14]. There are many prospectors interested in developing large solar plants.
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The National grid has an installed capacity of 5,758 MW, but its effective wheeling capacity lies at about 4,500 MW[15]. The transmission network has a total length of 12,300 km (330 kV 5,650 km, 132 kV 6.687 km)[16] and and connects 32 330 kV and 105 132 kV substations[17]. It is managed by the Government owned Transmission Company of Nigeria (TCN). The Government has contracted Manitoba Hydro International (MHI) to operate it.
The distribution network has a length of 224,838 km (taking into consideration 33KV, 11KV and LV lines overhead and cables. As part of the power sector reform, the network was split into 11 distribution zones, each of them now owned and managed by a different Electricity Distribution Company (DisCo), with the exception of the Kaduna whose privatization process is still ongoing.
Ikeja is the one with the longest grid (36,585 km), while Kano is the one with the shortest (7,404 km) and the highest losses (40%). The Ibadan network is the one with the highest capacity (878 MW) and highest number of customers (812,000 customers), while Ikeja is the one with the highest peak demand (1,400 MW) due to the high concentration of economic activities in Lagos. The table below includes information on the distribution network per DisCo:
Table missing
At the end of 2014, there also were 138 companies with licenses as metering service providers; of which, 5 certified as meter manufacturers; 13 companies as importers, 28 companies as meter vendors, 13 companies as individual meter installers and 79 as corporate installers[18].
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Due to poor maintenance and vandalization, the transmission network is currently overloaded and experiences losses of 25%, which are particularly high in the north[19]. The radial network is unreliable and contributes to a high number of system collapses. The distribution grid also suffers from high technical and non-technical losses, a poor maintenance regime which is further aggravated by the fact that there is not centralized and automatized control system and low fee collection efficiency which results directly from the low number of installed metering systems are the main problems on the distribution level.
Nigeria’s average electricity consumption per inhabitant is only 150 kWh per capita, one of the lowest in the world[20]. It is estimated that, in 2011, grid-connected customers suffered an average of 28 blackouts per day[20]. Regular brown-outs also make necessary the use of stabilizers in order to protect the electronic equipment.
This situation does not only affect the population’s living standards, but it is also often mentioned as the biggest barrier to the country’s economic development. The closure of industries such as textile factories in the 1990s in states like Kaduna, Kano or Lagos is often cited as a proof of the effect of de-industrialization caused by an unstable power network[21]. The Council for Renewable Energy of Nigeria (CREN) estimated in 2009 that power outages brought an annual loss of about 126 billion naira (US$ 984.38 million)[22]. Additionally, Nigeria remains one of the most difficult countries when it comes to obtaining an electricity connection with an estimated time duration of 260 days and a cost of 960% of income per capita[23].
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A Network Expansion Blueprint was created in 2013 for the transmission framework. The study estimates the need for a capacity of 16,000 MW by 2017. As a result, TCN is currently refurbishing the transmission network and has launched over 165 on-going projects[19]. Several hundreds of projects are already ongoing, including a project to create a super grid of 700 KV all around Nigeria[16].
The Roadmap for Power Sector Reform also includes targets for the increase in the distribution capacity of 32,774 MW by 2020[24]. While the plans for the realization of the transmission targets are developed on a centralized level at the Transmission Company of Nigeria (TCN), the achievement of distribution capacity targets will require the joint efforts of the 11 distribution companies. Progress made by the distribution company in this regard is the responsibility of the Nigerian Electricity Regulatory Commission which negotiates targets on grid expansion and densification as well as loss reduction on annual basis through the Key Performance Indicators (for more information, please refer to the chapter on regulation)
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Electrification trends, particularly for rural remote areas, have not progressed as fast as they were expected. In addition to the high demographic pressure, the strong focus on grid extension of the Federal and State Government’s electrification programmes raising substantially project costs for low density and remote areas with low consumption and capacity to pay is often mentioned as one of the reasons. This has been further aggravated by high levels of political interference when it comes to the prioritization of areas to be electrified. Intra- and inter-community conflicts have also resulted in delays in the country’s electrification programme.
Recurrent unscheduled blackouts have pushed the population and businesses to invest in self-generation. It is estimated that only 50% of the electricity generated comes from the grid, while the other half is generated from individual power sources, generally small petrol/diesel generators. In 2009 the total capacity of individual power sources from petrol and diesel generators was conservatively estimated at 6000 MW[25]. In 2006, the Federal Capital Territory, Lagos and the South-South and South East, particularly the Niger Delta states (Delta, Bayelsa and Rivers), were the ones with the highest concentration of generators[26].
Businesses are the ones that have invested the most on self-generation. Actually, there are 20 licenses summing up a total capacity of 305.5 MW for off-grid (self) generation, most of them for industries. There is also one license for off-grid distribution which covers certain areas of Ogun State where the National Grid does not reach[27].
Off-grid electrification using conventional sources dates back to the 1970s when the Federal Government through its Rural Electrification Programme decided to electrify all Local Government Areas Headquarters that were off-grid with off-grid diesel powered generated systems.
Renewable energy based off-grid electrification is more recent. In the 1990s, the Energy Commission of Nigeria (ECN) and the former Federal Ministry of Power and Steel pioneered the installation of off-grid PV in Nigeria, including mini-grids and stand-alone systems for residential, irrigation and cooling purposes[28]. More recently, the Rural Electrification Agency (REA) and the Federal Ministry of Environment (FME) have also started developing these projects. The Federal Ministry of Power also launched the initiative Light-up Rural Nigeria.
Although States’ electrification interventions, focus mainly on grid extension, some have also installed off-grid PV water pumping systems and off-grid PV street lighting. Some of them have implemented some off-grid PV village electrification projects together with the private sector.
From a preliminary survey including 6 companies carried out by the Nigerian Energy Support Programme (NESP) in 2014, all together these companies had installed about 1 MW of off-grid PV combining mini-grids and stand-alone systems. Most of them have been installed for residential or commercial purposes in un-electrified rural areas, but there are also some that have been built in grid connected areas as grid backup systems. Most of the mentioned projects were installed using full grants from international donors or the federal, state and local levels.
Small wind turbines for water pumping have also been installed in some parts of the country for testing. For instance, the Sokoto Energy Research Centre (SERC) installed a turbine in Sayya Gidan Gada Village, Sokoto. SERC, together with the World Bank (WB), ECN and the Sokoto Government, installed a hybrid mini-grid combining 10 kW solar and 2 kW wind in Danjawa Village, Sokoto. Other technologies such as off-grid PV street lighting have also been tested in Danjawa.
There are as well some experiences with regards to small hydropower. One of the main actors in this regard is the United Nations Industrial development Organization (UNIDO) and its International Small Hydropower Regional Centre and to a lesser extent the United Nations Development Programme (UNDP). Examples of projects developed by latter are Evboro II pico-hydropower plant in Edo State, the 70 kW micro-hydropower plant in Osun, installed using NASENI’s local turbine technology, or the 400 kW mini-hydropower plant in Taraba State. All the above mentioned hydropower projects will be used mainly for village electrification with the exception of the last one which will be used for self-generation at a beverage company. Excess power will be sent to the surrounding villages. The Energy Commission of Nigeria has also installed a pico-hydropower pilot project in Nasarawa to test the kinetic turbine technology. With regards to biomass, there is information of a 5 MW biomass powered mini-grid project by UNIDO, but there is no information as to what is the stage of the project.
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The self-generation sector using diesel/petrol generator sets is at an advance state of maturity and functions strictly on a commercial basis. On the contrary, due to the low retail prices of diesel and petrol and low levels of end-user awareness, the renewable energy sector remains in its infancy and nearly completely dependent on grants. Most of the rural electrification projects have failed due to the lack of sound business models. Systems are normally installed without having carried out a thorough assessment of end-user needs. Systems are generally handed over to beneficiaries for operations and maintenance without prior training. In spite of the high dependence of the off-grid renewable energy sector on public support, the sector’s framework remains unfinished without a rural electrification fund or a regulatory framework.
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There is strong political commitment from the Federal Authorities through the FMP and the REA as well as from the State Authorities. No concrete electrification plans have been developed. However, initiatives such as Light-up Rural Nigeria launched by the FMP are planning on developing a number of solar mini-grids over the next years.
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Nigeria’s framework for the on-grid power sector, particularly with regards to the conventional sector, is well consolidated. The policy and regulatory framework on renewable energies has known a lot of progress over the last years. Seemingly, the framework for medium scale interconnected generation (embedded generation) is also being elaborated at a fast pace due to the importance of this aspect for DisCos. On the contrary, most of the documents conforming the one for rural electrification, particularly off-grid, and also energy efficiency still need to be developed or are still in draft form. There is however, a gap between the policy framework and their operationalization through the formulation and effective implementation on plans with a clear roadmap. Below a chart listing all existing legislative, policy and regulatory documents that are then described in more detail in the subsequent subsections:
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The Federal Ministry of Environment (FME) is responsible for the Environmental Impact Assessment (EIA) which is implemented in accordance with the Environmental Impact Assessment Act (Decree No. 86) enacted in 1992 and the guidelines promulgated in 1995. All development projects are classified in one of the following three categories based on the guidelines.
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Renewable Energy projects fall under Category 2. However, at the request of the Federal Ministry of Power and Steel in 2005, a new simplified process was created for small pilot projects (Environmental Control Plan)[30].
The regulatory document Requirements for Licences to be granted pursuant to the application for licences (generation, transmission, system operation, distribution and trading) Regulations of 2006 also mentions a simplified procedure replacing the EIA for off-grid and captive generation below 10 MW called Policy for managing effluents and discharges.
Over the years, a myriad of institutions and bodies have been created in Nigeria to deal with the energy sector. This has led to overlapping mandates and regular conflicts amongst institutions and bodies adding to the already complex relation between the Federal and State levels and further affecting the much needed coordination in the sector. The institutional set-up as a whole and many of its institutions have initiated a restructuring process to respond better to the needs of the newly liberalized power sector. This process is expected to improve the institutional coordination and complementarity. To ensure the sector coordination the Federal Ministry of Power (FMP) established the Inter-Ministerial Committee on Renewable Energy and Energy Efficiency (ICREEE) composed of the key power sector actors. The committee has rather had a limited impact. The Nigerian Energy Support Programme (NESP) has helped the Federal Ministry of Power to re-activate it.
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In addition to the Federal Ministry of Power (FMP) that is supposed to be the main actor in the sector responsible for policy formulation, planning, coordination and monitoring, the Presidency also decided to get directly involved in the power sector reform with the creation of the Presidential Action Committee on Power and the Presidential Taskforce on Power (PTFP). The FMP is one of the institutions that is currently undergoing a restructuring process to adapt to the new structure of the liberalized power sector.
The Electricity Power Sector Reform Act (EPSRA) provided for a new institutional set-up for the reformed power sector. It created the Nigerian Electricity Regulatory Commission in charge of regulating the sector (including licensing) and ensuring compliance of actors with market rules. It unbundled the former public utility, Power Holding Company of Nigeria (PHCN). As a result, a number of thermal power generation plants have been privatized (see third table on generation for more information on generation companies). Others are awaiting privatization under the National Independent Power Producer (NIPP) Programme managed by the Niger Delta Power Holding Company Limited (NDPHC). The hydropower plants have been franchised. The transmission sector remains public under the control of the Transmission Company of Nigeria (TCN) managed by a private company (Manitoba Hydro International of Canada). The distribution sector has been completely privatized with the creation of 11 zones that were sold to the private sector in an open competitive bidding process (see fourth table for more information on the electricity distribution companies). With a view to ensure the transition towards a fully privatized power market, the Act also foresaw the creation of the Nigerian Bulk Electricity Trader (NBET) responsible for purchasing electricity from generation companies and selling it to distribution companies.
Due to the heavy reliance of power generation on gas and in order to ensure gas supply to the power generation companies, a Gas Aggregation Company of Nigeria (GACN) was established with the mandate to facilitate natural gas trade between suppliers and purchasers. The Nigerian Gas Company Limited (NGC) was created to transport natural gas through its pipeline network.
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In order to narrow down the gap between rural and urban electrification, the Electricity Power Sector Reform Act (EPSRA) also created the Rural Electrification Agency (REA), responsible for stimulating rural electrification through various instruments, including subsidization. Nonetheless, as previously said, the REA’s framework has not yet been fully finalized. Awaiting this “paradigm shift”, the REA carries out implementation of “constituency” projects, mostly grid extension, but also off-grid renewable energies, upon requests from communities or political authorities using the monies of the federal executive which are directly allocated to specific projects. Other actors, like the Federal Ministry of Power, the Federal Ministry of Environment or the Energy Commission of Nigeria also carry out constituency projects using off-grid renewable energy systems. The Constitution gives States the power to do generation, transmission and distribution in areas that are not yet covered by the national grid. As a consequence, States and Local Governments also carry out electrification projects, mostly grid extension to rural areas using their own budgets.
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Due to the emphasis that the Nigerian authorities have put on energy, particularly power. There are many donors that are currently active in the sector. Table missing
