Using renewable energy to meet Nigeria’s future power demand

The Niger Delta Power Holding Company (NDPHC) was established as a special purpose vehicle to intervene in the power sector value chain. As the company ended the Phase I of its mandate and begins its Phase II which will be focusing on renewable energy, OLATUNDE DODONDAWA examines the roles of the NDPHC in using renewable energy to close up the gap in the power sector value chain.
Introduction

THE National Integrated Power Project (NIPP) was conceived in 2004 as a fast-track government funded initiative to stabilise Nigeria’s electricity supply system. In August 2005, the National Council of State and the National Assembly approved an initial funding for NIPP from the excess crude savings account which statutorily belongs to the federal, state and local governments. The Federal Government, therefore incorporated the Niger Delta Power Holding

Company Limited (NDPHC) as a limited liability company to serve as the legal vehicle to hold the NIPP assets, using private sector-orientated best business practices. And by implication, the three tiers of government are the shareholders of NDPHC.

Therefore, the federal, states and local governments, set up the NDPHC as the biggest power intervention initiative in Africa, to fast track the delivery of power supply.

The power throughput in Nigeria remains at about 12,000MW at generation level, 5500MW at transmission level and about 5000MW at distribution level, a situation that has restricted the improvement of service delivery at the last mile to consumers.

Under phase I of the NIPP, the NDPHC has built 10 thermal plants close to source of natural gas supply in the Niger Delta and some locations in the west. It has grown Nigeria’s generating capacity by about 60 per cent within the 13 years of its existence, contributing over 35 per cent of the current installed capacity. Its relatively self-effacing modus operandi since its inception, has not limited its meeting 80 per cent of its targeted capacity. Eight functional out of 10 NIPP power plants; along with associated gas transmission metering, adding huge MVA capacity to the national grid, have been achieved. Fully completed power plants include 750MW Olorunsogo II, 450MW Sapele, 434MW Geregu II, 450MW Omotosho II, 450MW Ihovbor, 450MW Alaoji, 563MW Calabar and 225MW Gbarain. Imminently completed ones include 225MW Omoku, 338MW Egbema and 530mw 2nd Phase Alaoji. The company’s overall contribution to the transmission system is increasing daily as the NIPP comes to full stream.

NDPHC in its first phase of operations was mandated to deliver power nationwide through massive gas-fired power plants.

 

NDPHC’s intervention in distribution infrastructure

With regards to distribution infrastructure, the NDPHC has constructed and commissioned over 350 injection substations with a combined capacity of 3,540MW across the length and breadth of the country.

The NDPHC has further constructed a total of 2,600km of 11kV and 1,700km of 33kV distribution lines for improving access to electricity and quality of power supply to consumers. The nation’s distribution capacity has also been enhanced by the installation of 25,900 completely self-protected (CSP) transformers all over the country thereby significantly reducing technical losses.

Under the NIPP program, the capacity of 33/0.415kV and 11/0.415kV has been increased by 26 per cent. The NIPP is designed to increase the number of 33/0.415kV & 11/0.415kV substations by 163 per cent and all the projects are nearing completion.

The NIPP is the largest single intervention in power infrastructure in Africa and the implementation has not been without challenges.

With an overall level of completion of projects in excess of 80 per cent, the balance of which are on the verge of completion, the NDPHC has definitely delivered on large parts of its phase I mandates of providing robust power generation, transmission and distribution infrastructure for the nation. In recognition of the subsisting gaps in power infrastructure, the NDPHC looks forward to completing its mandate by doing a lot more for Nigeria under NIPP phase II.

The nation will fully benefit from a world-class transmission infrastructure and a more diversified generation-mix underpinned on the utilisation of alternative sources of power generation including renewables.

NDPHC’s intervention in renewable energy NDPHC’s intervention in renewable energy marks the commencement of its phase II programme which is aimed to boost the Federal Government policy on escalating renewable energy opportunities through dependable solar alternative.

The NDPHC has officially commenced a partnership with Azuri, a company with track record of success in its operations in East Africa. The partnership flagged off at Wuna village in the FCT, Abuja and is a part of the Presidential Initiative on Rural Solar Home Lighting Systems.

The NDPHC is actively involved in the presidential initiative where at its beginning, 20,000 units of solar home systems are now being deployed in under-served rural areas with no access to the national grid. Most rural dwellers in Nigeria have relied on kerosene lanterns and candles for their energy needs for decades, but the clean energy initiative which apart from creating jobs and enabling solar installers and agents, will definitely boost general economic activities in the communities and make life more worth living.

The company has keyed into the Federal Government’s ambitious renewable energy policy which aims to increase energy production from renewable sources from 13 per cent of total electricity generation in 2015 to 23 per cent in 2025.

Still under this phase, the NIPP will further close the infrastructure deficit arising from the continued growth of the economy and gaps associated with other critical stakeholders in the power value chain.

NIPP plans to fund these newly proposed projects either from proceeds of the ongoing divestment of 80 per cent equity in NDPHC generation subsidiaries or by leveraging the company’s significant balance sheet to attract the much needed foreign as well as local capital. Only few companies in Africa can boast of an asset base in excess of $8 billion and a much higher valuation when a financial close is achieved on the transaction.

It is noteworthy to report that the sum of $5.7 billion offered for the acquisition of the NDPHC 80 per cent equity power plants is well in excess of the amount expended in building the plants thus an affirmation that the NIPP procured its assets with duty of care and due consideration for value for money.

Phase II of the NIPP also entails construction of 11 hydro dams in Northern Nigeria, which will further boost and diversify the Nigeria’s power generation, transmission and distribution capacities. The projects include: Large hydro power, Mambilla, Gurara, Itisi with total capacity to generate 3,450MW; small hydro power at 10 sites in the north to generate 83.25MW; 43 critical transmission projects to resolve transmission bottlenecks; 51 transmission projects to improve wheeling capacity to 12,000MW and 31 other transmission projects as foundation for increase of capacity to 16,000MW plus communication and national control centre among others.

 

Conclusion

The NDPHC must continue its march to attain stable electric supply for Nigerians. It should use every available means to raise the generation, transmission and distribution of power supply on the principle of best services. The character of the developments made during this present administration, demonstrate that the policy of the present administration is dominated by public interest rather than private interest.