How Nigeria lost 15000MWs to gas flaring in 6 years

While Nigeria constantly struggles with improving its grid generation from the current 5800MWs, it would have generated a  little over 15,000MWs power from the volume of gas flared in six years.

It is no news that 85 per cent of Nigeria’s power generation plants are fossil fuel based, which is mainly natural gas. This speaks to the importance of gas infrastructure towards enhancing energy security even as the country moves towards a transition to cleaner sources of energy.

Despite having the largest gas reserves all over Africa with 201 trillion cubic feet and unproven gas reserves of 600tcf, a chunk of the volume of gas produced still goes to waste as only little of this gets delivered to power plants.

Little wonder, most of the thermal plants are either not producing up to capacity or rendered inoperative due to gas constraint among other factors.

While Nigeria still majorly depends on gas fired plants to generate power, the amount that have gone to waste over the years would have immensely improved the quality of power supply to Nigerians and guarantee gas availability to plants.

…15,000MWs lost to gas flare in six years

 Data obtained from the gas flare tracker showed that between year 2015 to January 2021, a total volume of 1.2billion Mscf gas with a potential to generate 122,600GW/h power was flared.

The amount of flared gas spanned across 10 states across the country-Rivers, Lagos, Kaduna, Imo, Edo, Delta, Bayelsa, Anambra, Akwa-Ibom and Abia States.

18500Gw/h,17500Gw/h, 2100Gw/h, 26900Gw/h, 25600Gw/h, 22700Gw/h power went to waste within the period under review.

This implies that if the gas flared daily, is  converted to generate power, a total of 15,000MW could have been generated in six years.

A further breakdown of the figures showed that 2,111MWs; 1,998MWs; 2,397MWs; 3,070MWs; 2,922MWs and  2,591MWs would have been added to the grid in 2016, 2017, 2018, 2019, 2020 and early 2021 respectively.

Currently, electricity demand according to the Federal Government (FG) stands at 22,000MWs, grid installed capacity 13,000MWs while the highest peak generation as of March, 2021 was 5800MWs.

With a power demand of 22,000MWs, an average generation of 2,500MWs could be added to the national grid within the period (2015-2021) bringing the national grid supply to 8,300MWs.

Gas constraints hinder generation in power plants

The availability of gas is no doubt a key to achieving improved electricity supply as thermal power from gas and steam turbines accounts for about 80% of Nigeria’s power generation.

The FG has severally raised concerns over dominance of gas in generation apart from hydro, which accounts for the remaining 20percent of the generation mix. Factors such as gas pipeline vandalism could result in grid instability, as witnessed in the power sector in 2016.

Aside, gas-fired plants have been constantly forced to operate below capacity due to issues not far-fetched from gas non-availability, pricing among other factors.

To buttress this, the Nigerian Electricity Regulatory Commission (NERC) in its latest quarterly report says the daily average available generation capacity and actual generation (in MW) from the first quarter to the second quarter  indicates a decline in capacity utilisation.

“62.86% of the available capacity was utilised in the second quarter of 2020, indicating 8.16 percentage points decrease from the capacity utilisation rate recorded in the first quarter of 2020.

“By implication, about 37.14% of the total available capacity during the quarter under review was redundant due to the increased technical and operational constraints relating to inadequate gas supply, transmission constraints, limited distribution networks,” the report states.

Out of 28 generating plants statistics showed that 24 power plants were operational while only nine accounted for 71.31% of the total electric energy generated during the second quarter of 2020.

“Gas unavailability greatly hinders power generation in Power Plants. Its availability, therefore, is critical to achieving improved electricity supply provided payment is guaranteed through regular payments,” says Dr Joy Ogaji, Executive Secretary Association of Power Generation Companies (APGC) in one of the Company’s Biannual issues.

Meanwhile, Nigeria’s Electricity Supply Industry (NESI), has suffered huge revenue loss as a result of gas, transmission and distribution constraints.

For instance, a 30-day data for the month of December 2020, from the Advisory Power Team, resident in the Office of the Vice President,  Prof. Yemi Osinbajo reported the loss of N22.3billion attributed to insufficient gas supply, weak distribution and transmission infrastructure

FG’s gas utilization policies in retrospect

In December 2016, the  Federal  Executive Council(FEC) launched the Nigerian Gas Flare Commercialization Programme, designed to implement the FG’s policies to end gas flaring.

The objective of the NGFCP is to eliminate gas flaring through technically and commercially sustainable gas utilization projects developed by competent third-party investors.

Although Nigeria is a signatory to the Global Gas Flaring Partnership (GGFR) principles for global flare-out by 2030, it had missed its 2020 national flare-out target as the practice still persists daily in oil fields.

In fact, data showed that between January-December,  2020 a total volume of 205.5million Mscf valued at $719.2million was flared, thus emitting 10.9million Carbon monoxide into the atmosphere, running contrary to the Paris Climate Change Agreement, Nigeria had signed.

Several laws had been enacted by the country in the past to curtail gas flaring. For instance, in 1979 the Associated Gas Reinjection Act was created to re-inject all gas produced in association with oil production but not utilised into industrial projects.

Also in 2008, the FG created the Nigeria Gas Master plan aimed at not only ending flaring in the same year, but also stimulate an increase in domestic use of the commodity while NGFCP was created to monetise flared gas and end routine flaring.

According to NGFCP, Programme Manager, in the Ministry of Petroleum Resources, Mr Justice Derefaka, the potential GDP impact of the programme was estimated at over $1 billion per annum, with the potential to unlock two to three Liquefied Natural Gas (LNG) trains, 3000 megawatts (MW) of electricity generation as well as generate circa 600,000 metric tonnes (MT) of LPG per year, giving six million households access to clean energy through Liquefied Petroleum Gas, LPG.

“Once operational, projects launched under the NCFCP would reduce Nigeria’s emissions by about 13 million tonnes of CO2 per year, consistent with the President’s commitments to the reduction of Greenhouse Gases under the Paris Climate Change Agreement, which could also be monetized under an emission credits/carbon sale programme at a value range of $400 to $500 million. The NGFCP is clearly a High – Impact Programme,” says Derefaka.

But, statistics from the industry have shown that although gas utilization seems to have increased, through commercialisation and domestic use, gas was still being flared daily.

For instance, the Nigerian National Petroleum Corporation (NNPC) monthly financial and operations report for November showed that between 2019-2020 November a total volume of 474BCF gas was supplied for domestic use out of which 278.16 and 196.6 BCF were supplied to gas-fired plants and industry respectively.

However,  a total volume of 1,151BCF gas was not commercialized within the period from which 216.46BCF was flared. Although relatively small, compared with the amount reinjected and what was used as gas fuel, the country would have earned nothing less than $758million in revenue as penalty fees against oil companies.

Although the FG has put in place various policies to deepen the growth of the gas sector, there is a need to ensure that the potentials in the sector is not only maximised but the impact is felt across board.

‘This story was produced under the NAREP Oil and Gas 2021 fellowship of the Premium Times Centre for Investigative Journalism’

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