The Nation Newspaper

Category: Energy

  • Erratic power costs businesses N5tr yearly

    Nigerian businesses spend about  N5 trillion ($14 billion)  over poor electriicty supply, African Development Bank (AfDB) Group Energy Sector Specialist Dozie Okpalaobieri has said.

    He said the cost incurred due to irregular supply of electricty was enormous, adding that about 80 million Nigerians lacked access  to electricity.

    He said more than one billion people live in darkness globally, with 80 per cent in sub-Sahara Africa and Asia, adding that a larger percentage of these  people are found in rural areas.

    Okpalaobieri said: ‘’Sub-Saharan Africa accounts for 60 per cent of the people that do not have access electricity, with 58 per ent living in the rural areas.’’

    According to him,  the world requires $40 billioin to  ensure that people have access to electricity by 2030, adding that off-grid method of electricity is the only option for African Continent to meet the energy needs of its people.

    Speaking on the sideline of an energy forum in Lagos, Okpalaobieri said Nigeria was the biggest destination for solar and other methods of off-grid electricity in Africa, stressing that the country has a population of about 180 million, coupled with the fact that the country has the largest Gross Domestic Product (GDP), estimated to be around $405 billion annually.

    He stressed the need to improve   the generation of off-grid electricity and further make it commercially viable in Africa.

    AfDB developed a 10-year strategy (2013-2022) to achieve an inclusive growth and transit to green energy. To him, how to “Light up and Power Africa” was central to governments   and energy companies globally.

    Okpalaobieri said Light Up Africa is aimed at solving energy challenges. He noted that a transformative programme on energy, mobilisation of local and foreign capital, strict energy regulation are  needed to improve power supply on the continent.

    He said: ‘’This is targeted at increasing on-grid generation, with a view to provide 160 gigawatts of capacity by 2025, and to also  increase on-grid transmission and grid connections by 160 per cent to create 130 million new connections within the period.

    ‘’The idea will also increase off-grid generation, by providing 75 million connections by 2025. “

    He said this figure is 20 times more than what Africa generates presently, stressing that the idea would enable 130 million households  access  clean  energy.

    Providing urban and rural population with electricity, according to him, is possible, when off-grid method of electricity is involved.

    Okpalaobieri, however, said providing electricity to people through on-grid or traditional means was expensive and time consuming, compared to  mini-grid electricity.

    He urged energy firms to provide mini-grid power in large quantities  because it is very effective.

    With the off-grid approach, private participation would be ensured. The AfDB is support ng  Rural Electrification Agency  to achieve this goal.

    “AfDB is developing private sector mini-grids in unserved and underserved areas that have growth potentials. Scaling up private sector development, by providing mini-grids electrictity  to more than one million Nigerian households and small and medium scale enterprises (MSMEs), is needed to achieve growth,’’ Okpalaobieri added.

    AfDB  is earmaking  $70 millionn for production of mini-grid electricity and the bank is targeting  about 250 mini-grid sites to achieve this goal. Also, the bank has promised to provide $10 million for the provision of solar energy in Nigeria, with a view to ensuring that households  access electricuty for growth.

    Again, the AfDB is providing $110 million for the energising education program targeting solar and solar-hybrid solutions for between six and eight federal universities and teaching hospitals across the country.

  • Solar firms lose jobs over 10% Customs tarrifs

    Solar power firms are winding up operations over the rising cost of solar power equipment in the country, it was learnt.

    The firms, mostly from states in the northern  and eastern parts of the country, are shutting down following the decision by the Federal Government to increase Customs duty on solar power equipment  from five to  10 per cent, since early this year.

    The prices of  solar panels,  batteries and other equipment used in generating solar electricity have increased by 100 per cent, thus hindering the plans by investors to invest in solar electricity.

    Mostly affected are firms which build mini-grids, with a view to connect communities, which are off the national grid, access electricity.

    The President, Renewable Energy Association of Nigeria (REAN), Mr Segun Adaju, said the body rejected the rise in Customs duty on solar panels on the ground that it was causing untold pains to the firms.

    He said many of his members were losing patronage, as they could not afford to buy panels imported from abroad, adding that many would be out of business soon.

    According to him, the Nigerian Customs Service (NCS) has increased the woes of operators, by indiscriminately increasing the duty on solar equipment.

    ‘’Records have shown that few solar operators have stopped production in  the past few months, due to the fact that they cannot get enough materials for operation.  We as members of the Renewable Energy Association of Nigeria have written the Federal Government ditto the Nigerian Customs Service on the issue, with a view to making the government  reduce the duty.”

    Adaju said there was no justification for the duty because under the Common External Tariff (CET) code 8541.4010.00 – classification for import duty tarrif – import duty  on solar panels should be zero per cent.

    Adaju said discharge of goods from the ports have been slowed down immensely and demurrage charges have risen for his members since early this year, when the government implemented the new tarrif regime.

  • ‘DisCos not charging punitive tarrif’

    Electricity distribution companies (DisCos) are charging tarrifs that are below the ones approved for them by the Nigerian Electricity Regulatory Commission (NERC), and are, therefore, not making life unbearable for consumers, the Sahara Group Managing Director, Mr Kola Olabisi, has said.

    Also, the Managing Director, Ikeja Electric, Mr Anthony Youdeowei, said the firm was giving meters to its customers, adding that only customers owing electricity bills would be made to reconcile their accounts with the company, before they are given meters.

    He said the aim was to enable the company recover debts owed by its customers and to also dispute the claims that power firms are charging huge tarrifs amid inability to provide meters to customers.

    Corroborating Youdeowei, Olabisi said power firms were not happy that customers do not have meters, adding that the welfare of customers was paramount to energy distribution firms, as evident by the tarrif of N6.00 they are collecting from customers, as against N10.00, recommended by the commission.

    Adesina said: ‘’The power firms are collecting N6.00 for electricity consumed in the sector as against N10.00, which NERC ordered them to charge customers. Taking into consideration the cost of procuring facilities through which electricity is distributed to final consumers, and other costs incurred by the firms, it is evident that the DisCos are not making enough profits. Remember, there are losses arising from poor collection of revenues, which only the power firms are made to bear.’’

    He said the development contradicted the notion that power firms were collecting huge charges from the customers

    Speaking at the opening of the new undertaking office of the Ikeja Electric in Lagos, he said energy distributors are charging tarrifs of N6, as against N10 tarrifs imposed on the industry, by the regulators.

    He said the pricing formula was good for the industry, adding that NERC introduced the formula to enable consumers pay their bills and get the product they paid for.

    He urged customers to pay their bills as and when due, adding that when they pay their bills, they should expect services that are commensurate to what they paid through regular supply of electricity.

    ‘’The power firms make money from the light they give to customers, not darkness. The only product they sell is light, and this means that consumers must pay their bills in order to ensure that they are in business,’’ Adesina added.

  • 45 firms showcase potential at SNEPCo exhibition

    No fewer than 45 indigenous oil and gas firms showcased their products at the exhibition jointly organised by  Shell Nigeria Exploration and Production Company (SNEPCo and the Nigeria Content Development Board (NCDMB) .

    The exhibition with the theme: ‘’Made in Nigeria, Fit For the Future‘’ provides a platform for knowledge sharing among officials of Shell, contractors and other stakeholders.

    A SNEPCo official, Bayo Ojulari, said the company’s local content strategy was built around the national framework as developed by the Nigeria Content Development and Monitoring Board.

    He said: “The strategy places strong emphasis on research and development, promotion of local manufacturing, indigenous asset ownership, and human capacity development. Shell recognises the significant role that a viable and competitive manufacturing sector plays in the economic development of a country. Therefore, we actively seek opportunities to support and showcase strides made by Nigerian companies in the manufacturing of import-substituting goods and services, especially those required for oil exploration and production.”

    He listed collaborations between University of Ibadan and University of Port Harcourt  on research into synthetic base fluids for drilling operations, using local materials, as one of the initiatives introduced by Shell to improve local capacity in Nigeria, adding that the idea would lead to production of industrial materials in the sector.

    Also,  NCDMB’s Executive Secretary Simibi Wabote listed the contributions of International Oil Companies to the improvement of standards of goods produced by local companies.

    He urged operators in the sector to double their efforts in the implementation of existing policies, and pursue the delivery of identified gas opportunities.

    ‘’The Nigerian Gas Association  and other stakeholders must pick up the gauntlet, he posited. “I implore you to make this happen. It does not have to be a gigantic, big bang project that overwhelms everybody and does not get delivered at the end of the day. Let’s take one or two aspects of the value chain and channel all energies on them so that in two years’ time we are here to celebrate value addition to our hydrocarbon resources,” he said.

    According to Wabote, NCDMB has begun to implement some of its initiatives, citing the $200m Nigerian According Content Intervention Fund, managed by Bank of Industry for the provision of loans to oil and gas service providers at single digit interest rates, for the acquisition of key assets, manufacturing and other activities.

  • Committee extols Chevron’s community engagement strategy

    CHAIRMAN, House of Representatives Committee on Gas Resources, Hon. Fred Agbedi, has applauded the Global Memorandum of Understanding (GMoU), the community engagement strategy adopted by the NNPC/Chevron Joint Venture as solution for lasting peace in the Niger Delta.

    Agbedi gave the indication during a panel session at the 2018 Nigerian Gas Association’s (NGA) Conference and exhibition organised at the Transcorp Hilton Hotel Abuja.

    Represented by Hon. Ayebide Fatiede, he noted that through the GMoU model, Chevron has proven to that peace and harmonious relations with Niger Delta communities is possible and practicable.

    Speaking on the impact of oil pipeline vandalism on oil and gas infrastructure development in  the country, Hon Abedi insisted that the cause of restiveness among the youths in the area is anger occasioned by neglect and insensitivity of the government to the plights of the people.

    He said Chevron has instituted an effective system of engaging with the communities in a profitable manner, which has continued to enhance cordial relationship between the communities and the company.

    He said: “the GMoU by Chevron has created the desired enabling environment for oil and gas operations in the Niger Delta. What Chevron is doing is to bring the communities together and work with them for sustainable socio-economic development in a transparent and genuine way. I urge other organisations to emulate the NNPC/Chevron Joint Venture for steady development inn the Niger Delta region.”

    On the GMoU, Mr. Esimaje Brikinn, General Manager, Policy Government and Public Affairs (PGPA), Chevron Nigeria Limited, stated that since 2005 when the GMoU was established, the GMoU has recorded significant achievements especially in areas of education, health, and economic development.

    He said the NNPC/CNL Joint Venture has contributed over N20.6 billion to the RDCs to implement projects and programmes for about 600,000 beneficiaries in more than 400 communities.

    “In terms of managing conflict and enhancing peace in communities, the GMoU story is one we are very proud to tell and has resulted in very impressive footprints in various communities and the model has helped improve CNL’s relationship with its neighboring communities, as it created a clearer and more predictable channel for dialogue,” he noted.

    He commended the commitment of the traditional institutions, the government security forces, the community and leaders of the Regional Development Committees (RDC) for driving the multi-stakeholder collaboration for asset protection and stressed that CNL continues to work to strengthen relationship with these stakeholders. “The community leaders have shown great commitment to this process and have seen the connection between CNL’s operations and their livelihood,” he said.

  • USAID, On All award firms

    United States for Agency and International Development (USAID) and On All, an energy solution firm, has awarded 10 winners that have demonstrated commitment to the development of off-grid electricity in Nigeria.

    The firms announced the winners at the 2018 edition of its summit in Lagos.

    The winners are Havenhill, Prado, Solmenz, A4&T, and Darway Coast. The enabling business category includes Auxano, Eastwind, and Alyx. Creeds and iKabin emerged as the recipients in the solar home system category. According to Chuka Umezulora, CEO of Auxano, a company that assembles solar panels locally, “With the award of this blended finance, Auxano is poised to raise its daily production to more than 100 panels and double its staff strength to meet the rising demand.

    USAID’s President C.D Glin said: “The firm is  proud to partner with All On to foster the growth of local enterprises to bring power and connectivity to underserved Nigerians,” says C.D. Glin, USADF’S President & CEO. “This partnership combines grant capital with private sector funding to support the selected Nigerian energy enterprises with the means to grow their businesses, increase access to power, and change people’s lives.”

    He said USAID provided the firms with  $50,000 in seed capital while All On provided up to $50,000 in convertible debt to selected energy. In addition to funding, the winners will also receive technical assistance from USADF and governance support from All On, with a view to enable them develop, scale up or extend the use of renewable or off-grid energy technologies to reach communities not served by existing power grids.

    Also, All On’s Chief Executive officer, Dr Wiebe Boer, said the ‘’The  biggest challenge hindering Nigeria’s economic and social development is access to energy. These off-grid energy companies are introducing innovations that will improve household livelihoods and local economies by providing affordable power to unserved and underserved communities.

    “We are proud to partner with USADF to provide an innovative blend of financing to these companies to enable them to scale up and meet the increasing demand.”

    Also, one of the winners,  Hannah Kabir of Creeds, a solar home system company, said: “The USADF-All On funds will facilitate the scale up of our lease-to-own standalone solar systems to over 100 SMEs in Plateau and Rivers states, with affordable instalment repayments. By transitioning to standalone solar systems, SMEs save up to 50 per cent on daily fuel spend on generators, which can be channeled into growing their business and productive activities.”

  • IPMAN feud stalls $3b refineries project

    Investors are shying away from the proposed $3billion refineries project of the Independent Petroleum Marketers Association of Nigeria (IPMAN) over leadership crises in the union, IPMAN’s Chairman, South-West, Alhaji Debo Ahmed, has said.

    He also said IPMAN is awaiting the judgment of the Supreme Court on the issue in December, this year, adding that the judgment will determine the next line of action for the organisation.

    According to him, IPMAN will try and woo investors back into the project, once the Supreme Court judgment favours the union, by proffering a lasting solution to its leadership crises.

    In an interview with The Nation, on phone at the weekend, Ahmed said IPMAN would have long completed the construction of the refineries, which it planned to build in 2014 in order to reduce dependence on imported fuel and further improve consumption of the product in the country.

    He said wrangling among the top- echelon of the union made investors to change their mind, after they had already shown some interest in the project by signing an MoU.

    According to him, investors mainly from Asia and Europe are withdrawing their participation in the project, following the inability of IPMAN to reconcile its members, who are aggrieved over the choice of people that head the union.

    Ahmed said: ‘’ Investors from China, Spain and other countries are withdrawing from the project, due to leadership problem in IPMAN. This follows the Memorandum of Understanding (MoU), signed by IPMAN and the investors in 2017. Based on this, the investors are not going to provide funding for the refineries. This, coupled with the fact that indigenous banks are not going to disburse funds for the project, on the ground that that the economic climate is not good enough for investment, ditto the leadership tussles in the union. IPMAN has 1,000 hectares of land in Itobi in Kogi state and Abee in Bayelsa state for the project and the body is anxious to end its crises as soon as possible in order to ensure that investors do the needful for the union.

    He added that: ‘’IPMAN has some peculiar problems, which its contending with. The problems are varied and many, as they affect different segments of operation in the association. The problems are mistrust, lack of enough capital, poor infrastructure among others are having untold effects on the activities of IPMAN, which controls more than 70 per cent of the activities in the downstream sub-sector of the nation’s oil and gas industry. This is evident by the huge distribution channels, which the association enjoys across the country.’’

    Besides, the crises, Ahmed said, has pitched the association’s National Chairman, Chief Chinedu Okoronkwo with its predecessor, Mr Obasi Lawson, as well as forcing investors to shy away from investing in the refineries, that are billed to refine 200,000 barrels of crude oil per day(bocd), with a view to enable Nigeria depend less on imported petroleum products and to also improve domestic consumption of fuel.

    Also, IPMAN‘s Controller of Operation, Mr Mike Osatuyi, said the body  has tried to resolve its leadership problems to no avail, stressing that the issue is having undesirable consequence on the operation of the union.

    He said the body would have completed the construction of the refineries in the second quarter of 2018, but unable to achieve that goal, due to problems facing it.

    He said the issue of building refineries is one of the key projects that is being executed by the authority of IPMAN, adding that the organization is not relenting on its efforts to contribute to the growth of the sector.

    It would be recalled that the crises in IPMAN broke out years ago, following inability of the body to curb the crises that greeted the election of Mr Obasi Lawson as the National Chairman of IPMAN. The issue culminated in filling of suits in the court. Despite the fact that the election of  Chief Chinedu Okoronkwo as the substantive leader of the organization, the crises persist as warring factions refuse to sheath their sword.

  • ‘Nuclear energy will boost Nigeria’s economy’

    The International Atomic Energy Agency (IAEA) said Nigeria’s economy will develop on completion of its nuclear energy power plant, which will provide at least 4,000 megawatts (Mw) in the country.

    The firm, based in United States, in a study said Nuclear Energy Plant (NPP), which will be located in the eastern and other parts of Nigeria, will provide direct and indirect economic benefits to the citizens.

    It said opportunities abound in the areas of manufacturing of materials such as pumps, valves, pipes, tubes, insulating machines, pressure vessels, pressurizers, heat exchangers and others, adding that the idea will boost the economy.

    He said activities of suppliers of concrete and steel materials will be boosted, as they would create jobs for more people.

    It said: Nuclear Energy Plant will boost the activities of manufacturers of goods by acceding power for production. The construction of nuclear energy plant in India and Czech Republic has created jobs for the countries and Nigeria would not be an exception. Also, tax proceeds from the plant are used to build schools and provide other developmental projects in those countries, and Nigeria is expected to derived similar benefits.

    The firm said that nuclear energy plants in Czech Republic provides $6million for the economy annually to develop infrastructure in the country, stressing that Nigeria will get more revenue, in the vent that the plants are built by 2025.

    ‘’ Construction of nuclear energy plants  provides huge benefits to people  in  countries, where  they are built and this is  (added value) to those economies. Investing in nuclear projects stimulates cash flows to the regional and national budget that often surpass direct investments by a significant margin. The actual amount of investment depends directly on technologies involved. Nigeria will record similar gains, considering its population of over 170million people. ‘It added.

  • ‘Epileptic power creates $9.2b yearly mini-grid market opportunity’

    A REPORT has noted that developing off-grid power alternatives to complement the grid in Nigeria will create a $9.2 billion a year market opportunity for mini-grids and solar home systems.

    This will save $4.4 billion yearly for homes and businesses, the report said. It is titled: “Minigrids in Nigeria: A Major Investment Opportunity”.

    The report described the country’s power generation as “poor quality, noisy, and polluting. It noted that this has led to several of the country’s commercially viable businesses being powered through expensive sources of power generation.

    The report added that a significant amount of the economy is powered largely by small-scale generators (10–15 GW) with almost 50 per cent of the population having limited or no access to the grid. Consequently, there are high densities of power use, large latent demand, and a strong willingness to switch to more-effective alternatives.

    “Getting off-grid solutions to scale and commercial viability in Nigeria will unlock an enormous market opportunity in Sub-Saharan Africa across 350 million people in countries with smaller demand and/or less-robust economies,” the report, which was obtained by The Nation at the weekend, said.

    The report, which was an independent assessment of the Nigerian mini-grid market, was the result of a partnership between Rural Electrification Agency (REA), the World Bank (Energy Team), and Rocky Mountain Institute (RMI).

    The REA is tasked with developing the Nigerian off-grid power market.

    The agency created the Off-Grid Electrification Strategy as part of the Power Sector Recovery Programme (PSRP). The strategy’s primary objective was to increase electricity access to rural and under-served clusters.

    The PSRP is a series of policy actions, operational, governance and financial interventions to be implemented by the Federal Government over the next five years aimed at to restoring the financial viability of Nigeria’s power sector and improve its transparency and service delivery.

    It also seeks to resolve consumer complaints, reduce losses, energy theft, and reset the Nigerian electricity supply industry for future growth. The Federal Government developed the PSRP in collaboration with the World Bank Group.

    The report further stated that there is an annual $9.2 billion market opportunity today for mini-grids and solar home systems that will save Nigerians $4.4 billion annually.

    The report also pointed out that Nigeria was providing an enabling environment for off-grid market growth, including developer protection through the Nigerian Electricity Regulatory Commission (NERC) Mini-grid Regulations.

    The market, the report emphasised, has $9.2 billion, about N3.2 trillion annual market opportunity to supply off-grid and under-served customers with mini-grids and solar home systems.

    “With eight per cent economic growth through 2030, there is an additional $670 billion (?235 trillion) value proposition, the report  added.

    This estimate, it noted, was based on current expenditures, but customers may pay more for superior service. “This shift would save Nigerian customers $4.4 billion, about ?1.5 trillion yearly over current energy cost,” it said.

    Also, an innovative and best practice site-selection process to de-risk projects has already identified over 250 promising sites.

  • NDCMB partners Dangote Refinery on local content implementation

    Nigerian Content Development and Monitoring Board (NCDMB) has partner Dangote Petroleum Refinery and Petrochemical Free Trade Zone Enterprises (DPRP) on the use of Local Content Act in the country, its Director, Monitoring and Evaluation, Mr Akintunde Adelana, has said.

    He said this during the DPRP Nigerian Content Sensitization/Awareness Creation Programme, titled: “Let’s Walk the Nigerian Content Talk Together,” at Lekki Free Trade Zone, Lagos.  Adelana represented NCDMB’S Executive Director, Engineer Wabote Simbi at the event.

    According to Wabote, “the Dangote Refinery project is expected to close a major gap in the supply of petroleum products in the country. We consider this as a very important project and we are willing to partner with the company to ensure full implementation of the local content policy. We embarked on this journey with the company a long time ago and we are ready to partner with the Dangote Group. Part of what you see to today is part of our efforts to ensure that the company and its contractors comply with the local content policy.”

    He described the Local Content Act as the quantum of composite value added to, or created in the Nigerian economy by a systematic development of capacity and capabilities, through the deliberate utilization of Nigerian human, material resources and services in the Nigerian oil and gas industry.

    He said the country recorded loses prior to the enactment of the local content policy, which he noted, came from jobs executed abroad by International Oil Companies (IOCs), operating in the country.

    “The narrative then was that nothing can be done in-country. Plants and modules were fully fabricated offshore without any structure in place to achieve knowledge transfer. Before 2010, we had no active dry-dock facilities. The few we had were abandoned and left to rot away. Today, we have four active dry docking facilities in Port Harcourt, Onne, and Lagos,” he added.

    He said the board’s mandate is to develop local capacity in key areas such as manufacturing and fabrication and promote indigenous ownership of assets and utilization of indigenous assets in oil and gas operations.

    Wabote added that the board’s responsibility also include linking  the oil and gas industry  with other sectors of the economy, enhance multiplier effect of oil and gas investments in economy and develop pool of competitive supply chain rooted in oil bearing communities.

    Reading riot acts to defaulters of the Nigerian Content Policy, Wabote said non-compliance with the law, will result to the suspension of projects/contracts, penalty of five per cent of project sum, withdrawal of NCDMB’s services, and project cancellation unrecoverable sunk cost.

    Others, Wabote said, are suspension of license of the operator withdrawal of approvals or de-classification of contractor from pre-qualification list, application of the full weight of the law in accordance with Section 68, and publication of non-compliant operators in newspapers and professional gazettes.

    Also, the Chief Operating Officer, DPRP, Mr. Giuseppe Surace, said the programme was organized to create awareness among the company’s contractors on the requirements of NCDMB.  ”The programme was organized to ensure that our contractors are well informed about the Nigerian Content Act and this is expected to assist them with the execution of not just the Dangote project, but other projects in their portfolio,” he added.