The Nation Newspaper

Category: Energy

  • Nigeria’s first solar powered filling station opens

    Emel Advanced Power Solution Limited (EAPS),  a subsidiary of Emel Group, and its partner, Applied Solar Technologies (AST) of India, have achieved a breakthrough in the use of renewable energy. They have successfully installed Nigeria’s first solar-powered petrol station for Total Nigeria Plc.

    The 77.8 kilowatt peak (kWp) roof top solar power system supplied by SunPower, a Total Group affiliate, was installed at the refurbished Total filling station on Mobolaji Bank- Anthony Way, Ikeja, Lagos. The facility is the largest roof top solar system in Africa and the largest solar-powered filling station for Total in Africa and the Middle East.  It was installed by a team of six solar engineers over 40 days. It is automated, easy to maintain and repair with 24/7 on-ground back-up service. It can also endure extreme weather conditions with five to 10 years’output warranty, the company said.

    Total Nigeria Plc Managing Director Mr. Alexis VOVK said the company was delighted with the installation.

    He said: “We are, indeed, proud to announce that this solar power system provides uninterrupted lighting from dusk to dawn.  This will enable our station at Ikeja to provide better and more reliable service to our customers as well as improving operational efficiencies.”

    By harnessing energy from the sun, the filling station expects to lower its electricity costs by at least 25 per cent, as well as take advantage of other benefits, such as less dependency on diesel generators. This will reduce noise pollution and carbon emissions.

    EAPS Managing Director Roy Chatterjee, during the handover of the facility,  said the installation reiterated Emel, AST & Total’s commitment to environmental sustainability and focus on renewable energy resources.

    He said: “EAPS and its partner AST are committed to being leader in the industry and we are excited to be on the frontline of the renewable energy movement with this project. Through our partnership with Total & AST, we have set an example as to what can be accomplished when local and multinational companies work in unison.”

    Chatterjee said EAPS’ goal was to address the country’s energy and infrastructural needs at the community, state and national levels.

    He said: “This new solar powered station is a step away from fossil fuels, and as a nation, that’s a path we need to continue to explore. We believe one of the answers to the energy needs of the nation is solar and Nigeria as a country should continue to evolve a variety of alternative energy options.”

    He called on organisations to partner with EAPS & AST to make Lagos the solar capital of Nigeria by being a role model and using solar applications and also fund solar energy on for  their host communities.

    The President International, Applied Solar Technologies, India (AST), Mr. Sanjay Deshmukh, confirmed AST’s commitment to the market. “AST will bring all its experience to the country and help its venture with EAPS to grow at a rapid pace. This will go a long way in helping Nigeria harness the immense solar potential economically,” he added.

  • Verdict in Ogoni, Shell case soon

    London court may deliver judgment on the multi-million dollar compensation suit involving Shell and Bodo Communities in Rivers State before December, Bodo Chairman, Council of Chiefs, Mene Slyvester Kogbara, has said.

    Kogbara told The Nation that the Head, Leigh Day & Co (a UK-based Solicitors for the communities), Martyn Day, visited Nigeria last week to brief the communities on the matter, three years after it was filed in the London court.

    Kogbara quoted Day as saying the judgment would determine the exploration of crude oil in the Niger Delta region, its effects on the host communities and the responsibilities of oil firms to the people of the area.

    “While we are not trying to speculate on the outcome of the judgment, we believe that the judgment would determine a lot of things for stakeholders in the industry,” Day was quoted as saying.

    Kogbara said the visit by the Leigh Day & Co chief had doused the tension among residents, adding that they were happy the judgment was coming.

    According to him, the visit has eased off pressures on the Council of Chiefs which was accused of not fast-tracking the case.

    “The visit has reduced pressure on the Council of Chiefs accused of not doing anything on the matter. Everybody is waiting for the judgement. We expect the court to be fair on the issue. Once there is a fair hearing, victory is assured,” he added.

    However, Shell’s spokesman, Precious Okolobo, said it would amount to prejudice to speak on a case in which the plaintiffs and defendants were awaiting judgment.

    Shell had accepted responsibility for the two oil spills in 2008 that polluted the waterways of the fishing communities.  It said the volume spilt and the number of those who lost their livelihoods is exaggerated.

    The battle for compensation begun six years ago when the communities discovered that oil spills from exploration has affected their land. The spill from Shell oil wells has ravaged many areas in the Niger Delta region.The region has been plagued by many  problems, including sabotage, kidnappings of oil workers for ransom, crude theft, pipeline vandalism, armed rebellion, and conflicts between communities over clean-up contracts or compensation deals.

  • Engineers seek adequate gas supply to power plants

    The Nigerian Society of Engineers (NSE) has called on the Federal Government to expand sources of gas supply to power plants to ensure stable electricity nationwide.

    Chairman, Nigerian Society of Engineers (NSE), Egbin branch, Lanre Siddiq, made the call in Lagos on the sideline of the NSE  Egbin Engineering Week. He said the lack of gas supply had affected generation capacities of power plants.

    He said: “Lack of gas supply is causing a great problem for power plants. By now, power generation would have increased substantially but due to insufficient gas supply, generation is dropping.

    “Here in Egbin, for the past two weeks, we have been managing the little we have and that is why there is drop in power generated here.”

    If the government improved  gas supply to power plants, he said there would be tremendous improvement in electricity supply. He urged the government to expand the grid so that it would   evacuate energy generated from the power plants.

    “The government should work on the national grid expansion. For a long time, the grid has been very weak, it needs to be expanded so that it will be able to effectively evacuate energy generated by power plants,” he said.

    Siddiq also said the Council for Regulation of Engineering in Nigeria (COREN) had signed a memorandum of understanding (MoU) with the Economic and Financial Crimes Commission (EFCC) to run quacks out of the industry. He added that NSE Egbin branch was known for its dynamism and well represented in national activities.

    “We promote engineering learning and practice in our environment. The branch has also made great contributions in developing the technical capabilities of Egbin staff through workshops and seminars,” he said.

    On the expansion of the national grid, the Director-General, Bureau of Public Enterprises (BPE), Mr. Benjamin Dikki, said the Federal Government was planning a super grid power transmission system to cope with the anticipated increase in power generation.

    Dikki said this when he received a team from China Electric Power Equipment and Technology Company Limited, a subsidiary of the State Grid Corporation of China (SGCC).

    He said the TCN was willing to consider all options to strengthen its wheeling capacity, adding that as the capacity of generation increases, TCN would become bankable due to increase in wheeling and transmission charges, urging SGCC to liaise with TCN to key into the planned massive improvement in the national grid system. He said the sector requires massive investment for rehabilitation and new construction.

    The Vice President of SGCC, Mr. Cheng Wei, who led the delegation, said the team’s visit was a follow up to the visit of Chinese Prime Minister to Nigeria. He said SGCC is China’s largest power company and the world’s utility giant.

     

  • Alison-Madueke: gas cheaper than petrol

    he nation is beginning to see a change in gas use with compressed natural gas (CNG) as vehicular fuel, the Minister of Petroleum Resources, Mrs Diezani Alison-Madueke, has said.

    The Minister, who spoke at a forum in Abuja through the Nigerian National Petroleum Corporation (NNPC) Group Managing Director, Andrew Yakubu, said Green Gas Limited supplied over 4,000 taxis and cars with natural gas, adding: “This is growing on a daily basis.”

    She praised the initiative of NIPCO and the Nigerian National Petroleum Corporation (NNPC) called Green Gas Limited,  a joint venture targeted at making CNG a choice fuel by motorists, adding that the drive to deepen gas consumption had resulted in significant infrastructure development in and around Benin-City where the project took off.

    She said the use of gas, instead of petrol, has saved money for the taxi drivers, aside huge environmental benefits it offers to the citizens. The taxi drivers who have enjoyed the benefits are urging others to convert to CNG, she said.

    NIPCO’s Managing Director  Venkataraman Venkatapathy, in his presentation, titled: Natural gas vehicle sustainability and opportunity, said globally, the natural gas industry is increasing its effort to support natural gas transport, adding this is needed to create programmes and incentives that would be at par with other fuels.

    He explained that the success of natural gas use as an alternative to fuel, which relies on the government’s support through the provision of needed infrastructure, would further boost customer confidence in the project.

    He listed the needed support to include special gas pricing (lower than the power sector); subsidy to vehicle owners for this purpose; waiver of customs duty on importation of natural gas vehicles (NGVs), to ensure that 50 per cent  of vehicles imported are equipped with CNG, among others.

    Venkatapathy said to achieve this initiative,which would translate into increased use of the nation’s abundant gas resources as auto fuel, there was need for formation of a special high level committee that shall formulate policies with a clear strategic plan.The policy will include small share of fuel mix and auto fuel policy for use of natural gas as a fuel.

  • Firms seal facility deal

    The Niger Delta Power Holding Company (NDPHC), which oversees the National Integrated Power Project (NIPP), has handed over its new transmission plant to the Transmission Company of Nigeria (TCN).

    The plant, the largest in the country, is located in Oke-Aro community, Ogun State. It was completed last year, having met provisions of the contract, the NDPHC’s spokesman, Yakubu Lawal, has said.

    He said with the plant in operation, power supply to Nigerians would improve substantially.

    Speaking during the handover, the Deputy General Manager, Civil Field Operations, NDPHC/NIPP, Claudius Ogunrinde, said the project had been completed and inaugurated, and the company had been running it under the provisions of the contract.

    “Today marks the proper and complete handover of the facility to the TCN.

    “We are here to examine the effectiveness of what we have done about a year ago and some of the factors listed to be improved upon, and we have seen that most of them have been done and the job is excellently executed to specified standard,” Ogunrinde said.

    He said the TCN was allowed to take partial control of the facility last year with a clause to acquaint them with the technology and also ensure that the plant starts serving Nigerians early enough.

    “The clause was that in case any of the equipment develops problem, they (TCN) have a warranty for one year, so the contractor that did the engineering, procurement and construction (EPC) job, should be around to help solve the problem and guide the staff on how to run the station without problems. So the warranty is over today and it becomes the baby of TCN completely,” he added.

    The transmission plant is to step down power from 330kva to 132kva and then to 33kva.The 33kva is where the DISCOS and consumers get supply from. The facility has four feeders radiating on 33kva and two of them have been in service for about six months while another two has been added, waiting to be inaugurated shortly.

    TCN General Manager, Ijora Region, Mr. Oyeleke Adeoye, noted that the transmission plant would boost power supply to Lagos and Ogun states significantly and ease the load on Ikeja West transmission station at Ayobo, Lagos.

    He said: “The quality of the job done on the station is perfect. It’s one of the best stations we are inheriting, and I hope it will serve us properly in Lagos. The station will relieve Lagos region, because the bulk of power we consume in Lagos is around Ikeja Industrial area, and we all share the power from Ikeja West. Now that we have this, Ikeja area will satisfied appropriately, which means there will be relief in other parts of Lagos.”

  • Firm foresees drop in oil revenues

    SLOWDOWN in crude oil demand from Asia and increasingly growing importance of shale in the economies of importers of Nigeria crude may lead to a decline in oil revenues and external reserves, a report by BgL. Asset Management Limited said.

    In the report, a review of macroeconomic developments in the first quarter of the year, the firm said limited oil output caused by pipeline vandalism and theft was affecting proceeds and the government’s ability to finance some capital projects.

    It said major disruption along the Bonny and Forcados pipelines and its negative impact on crude export would weaken inflows into Nigeria’s foreign exchange reserves

    It said decrease in crude oil production and low power generation due to gas shortage, among others, has slowed down activities.

    The Chief Executive Officer, Bgl Securities Limited, a subsidiary of Bgl Group, Mr Sunday Adebola, said it was a normal development in the oil industry to have spillover  effects on the economy because of its importance.

    He said Nigeria had a mono-economy because it depends on oil, adding that problems in the economy are reflection of the developments in the sector.

    He also said divestment of shares by the International Oil Companies (IOCs ), among others, would affect the country in the short-term.

    “With Seplat Petroleum and other local oil firms showing capacity to undertake big-ticket transactions, the independents or indigenous operators would take over some of the exploration activities hitherto the preserve of the multinationals. However, this is a long-term initiative,” he said.

  • Power supply improves as govt targets 5,000MW

    Power supply improves as govt targets 5,000MW

    Six months after private operators took over in the power sector, electricity consumers have testified that the power supply is improving. It is an indication that stable power supply is achievable in Nigeria. AKINOLA AJIBADE reports.

    SIX months after the new investors took over the assets of the Power Holding Company of Nigeria (PHCN),  power supply has improved slightly in Lagos, Abuja and a few other cities across the country, The Nation investigation has revealed.

    This is coming on the heels of the Federal Government’s plan to improve power generation from 4,500 megawatts (mw) to 5,000mw by end of the year.

    In Lagos, consumers in some areas under the Ikeja and Eko Electricity Distribution Companies (IKEDC) have testified that supply to their areas has improved since last month. Also, some in Arepo, Akute and other distant places in Ikeja DISCO and Lekki, said the supply has improved by over five hours.

    Power Minister Prof Chinedu Nebo promised that the government would continue to improve  its performance, adding that 5000mw generation target would be attained by December.

    He said electricity generation increased by over 40 per cent from 2,500mw in 2011 to 4,500mw this month, and that the government was committed to its mandate.

    He said: “We inherited 2,500MW and we would more than double the figure by the end of this year. That is progress. I do not know how people define progress. As population increases, we would improve electricity supply to both urban and rural areas. This administration has put everything into the power sector to make it work. People are condemning the government, instead of commending it.”

    Nebo said the sector had been neglected by successive administration, which resulted in the decay of power infrastructure, adding that the population was growing without a concomitant growth in electricity infrastructure.

    He said Nigeria needed to produce 160,000mw to level up with South Africa in power supply, noting that it would be difficult to provide that in the light of the challenges in the sector.

    “There is no basis in comparing Nigeria’s power sector with that of South Africa. For Nigeria to be at par with South Africa, we should be generating 160,000MW. If you bring all companies together and make them work 24 hours a day, they cannot give you 160,000MW.  Now that the private sector has taken over the power sector, there has been an increase in interest showed in the sector. There is an influx of investment in the sector. Based on this, we would get to a level where power outage would be a thing of the past.

    “In Awka, power is stable except for the few minutes the residents experience power outage. That is the situation in many parts of the country. There is improvement in power generation and distribution across the country in recent times,” Nebo added.

    The Nation investigation showed that power has improved in some parts of the Lagos, including Ikotun, Egbeda, Dopemu, Iyana-Ipaja, Ikeja, Oshodi, Anthony Village and Ejigbo.

    Others are Ebute-Metta, Yaba, and Oyingbo on Lagos Mainland.

    Also, communities, such as Magboro, Mowe, Arepo, Sango-Ota and others in the Lagos-Ogun area have witnessed improved power supply.

    In Abuja, areas, such as Jabi, Wuse 2, Nyanyan  and the Central Business Districts(CDS) have witnessed improvement in power supply. But this could not be said of Gwagwalada, Bwari, Kubwa, karshi, Kuje, Dobi Angada and other satellite towns where there is still erratic power supply.

    The Executive Director, African Centre for Media and Information Literacy (ACMIL), Oluwole Asubiojo, said power has relatively improved in Abuja. He said businesses have also improved in some parts of Abuja, as a result of the energy supply increase.

    He said: “Stable power supply is still a far-fetched issue in Nigeria in spite of privatisation of the sector. It is obvious that power has improved relatively in Abuja and its environs, however a lot needs to be done to develop the sector to expectation. The generation, distribution and transmission sections still have their own problems.

    But a Partner at Usoro & Co, Laidi Munirudeen, said improvement in power supply  is not what Nigerians are looking for, noting that consumers need more than that from the government since power plays a crucial role in the socio-economic development, not only of the people, but the nation as well.

    “It is evident that power has improved, but not to a level Nigerians are looking out for. In Lagos Island, where I work, many firms rely on alternative energy supply. This is because they cannot depend solely on power from the national grid. This means that the country still has a long way to go in the area of power,” he added.

    The General Manager, Consumer Services, Ikeja Electricity Distribution Company (IKEDC), Ms. Olubukola Ojuronpe, said the power firms and the government were putting in place measures to improve the sector’s growth. She said the firms were not happy that consumers were not accessing power regularly, adding that they were making efforts to improve supply.

    According to her, the National Electricity Regulatory Commission (NERC) and owners of the 15 power firms meet regularly to find lasting solutions to the problems in the sector.

    The Ministries of Power and Petroleum Resources have formed a synergy to improve gas supply to the thermal stations to ensure constant power generation, she said.

  • BPE:banks not threatened by N1tr loans to power sector

    The Bureau of Public Enterprises (BPE) has dismissed fears of collapse of commercial banks over loans to the power sector.

    It said the sector was not facing a  cash crunch, noting that the firms  did not use their assets as collaterals.

    At a meeting with owners of the privatised power assets and the Africa Energy Team of the World Bank, in Abuja, the Director-General of BPE, Mr. Benjamin Dikki, described the fears as unfounded.

    In a statement, BPE’s Head, Public Communications, Chigbo Anichebe, said the fears of  takeover of the successor companies (SCs) because of the purported non-servicing of loans, or about the prospect of stress to the banks due to their exposure to SCs, are misplaced since the SCs did not borrow directly from the banks.  No assets of the SCs were pledged as collateral, he added.

    Dikki said: “It should be noted that it was the acquiring companies or special purpose vehicles (SPVs) that borrowed based on their cash flows and accounts. The agreements signed also requires that the consent of the BPE is obtained before the core investors can borrow.

    “The banks lent to the core investors based on their capability to pay. The investors are supposed to have made adequate provisions to take care of their obligations to their financiers from the outset.  They knew that they were not going to make profit immediately on takeover of the SCs. Their financiers also were aware of this.”

    The Head of Africa Energy Team of the World Bank, Mr. Pedro Antmann, reminded the investors that their primary focus should be to provide adequate and efficient power supply to consumers.

    He said there were challenges at the initial stages of privatisation, noting that with determination and the right strategy, they would be surmounted. He urged them not to aim at making profit now but to develop infrastructure and to meet the cost of supply.

    Antmann advised the Nigerian Electricity Regulatory Commission (NERC) to make a provision in its rules to adjust tariffs in times of low generation.

    He urged the investors not to focus on short-term gains, but invest in infrastructure that will guarantee sustained future profits.

  • Firm foresees drop in oil revenues

    Slowdown in crude oil demand from Asia and increasingly growing importance of shale in the economies of importers of Nigerian crude may lead to a decline in oil revenues and external reserves, a report from BgL Assets Management Limited, has said.

    In the report, a review of macroeconomic developments in the first quarter of the year, the firm said limited oil output caused by pipeline vandalism and theft was affecting proceeds and the government’s ability to finance some capital projects.

    It said major disruptions along the Bonny and Forcados pipelines and its negative impact on crude export would  weaken inflows into Nigeria’s foreign exchange reserves.

    It said decrease in crude oil production and low power generation due to gas shortage, among others, has slowed down activities.

    The Chief Executive Officer, Bgl Securities Limited, a subsidiary of Bgl Group, Mr. Sunday Adebola, said it was a normal development in the oil industry to have spillover effects on the economy because of its importance.

    He said Nigeria had a mono-economy because it depends on oil, adding that problems in the economy are reflections of the developments in the sector.

    He also said divestment of shares  by the International Oil Companies (IOCs), among others, would affect the country in the short-term.

    “With Seplat Petroleum and other local oil firms showing capacity to undertake big-ticket transactions, the independents or indigenous operators would take over some of the exploration activities hitherto the preserve of the multinationals. However, this is a long-term initiative,” he said.

  • Cash shortfall threatens power sector

    Cash shortfall threatens power sector

    The power sector is experiencing cash shortfall as collections from customers are much lower than expected by the new owners of the privatised assets, it was learnt.

    An industry source told The Nation in confidence that there is  cash shortfall in the sector, adding that this is due to some factors, among which is wrong assumptions in the privatisation.

    According to the source, the sector’s privatisation was based on wrong assumptions and as a result of that, the cash collected from end users is much lower than expected and it is so inadequate that it cannot cover all costs. Besides, the regulatory solutions proposed are far from solving the problems.

    The source noted that generation companies (GENCOS) and distribution companies (DISCOS) are facing deviations between their projected business plans and the actual situation, bigger than what could be handled within the limits of the official assumptions given for the privatisation

    According to the source, the financial sector is exposed to the power sector, and the uncertainty arising from the situation  is increasing their risk perception, thus foreclosing additional financing windows to cover the financial  gaps, a situation that is feared, could cripple the operators if no changes are made to address the challenges.

    For instance, the source explained that the DISCOS purchase electricity from GENCOS through the Nigerian Bulk Electricity Trading Plc (NBET), and sell to customers at the MYTO II tariffs, which is periodically adjusted.

    They collect payments from end customers and pay the bill to the GENCOS, the source said, noting that, unfortunately, not all electricity purchased from GENCOS is sold and not all the money collected due to the aggregate technical, commercial and collection (ATC&C) losses.

    The source noted that the ATC&C losses  at takeover, are equal to the ones officially announced by the Bureau of Public Enterprises (BPE), but they have discovered that the losses found have been remarkably higher than the assumptions and also that the available electricity has been much less than what the BPE said.

    On the takeover of the assets, the new investors in DISCOS were assured that electricity tariff would be adjusted regularly to ensure that DISCOS meet their business plans, but six months down the line, there is no sign that tariffs will be adjusted to compensate the collection gap arising from the challenges previously mentioned, the source added.

    As a result of these challenges, the DISCOS revenues are lower than expected, which make them (investors in DISCOS) to be unable to pay in full their bills to Market Operator and the Market Operator consequently cannot pay in full the bills to the Gencos.

    In view of the development, GENCOS receive less revenues, which compel the owners to make capital injections higher than expected to cover capital expenditure and operational costs and also meet their ATC&C loss reduction plans.

    The source also noted that as a consequence of this development, the Nigerian Electricity Regulatory Commission (NERC) has issued the Interim Market Rules (IMR) to mitigate the gap.

    The IMR outlined that the  successor companies’ Power Purchase Agreements (PPAs) are not active, therefore, the GENCOS will be paid tariffs as stipulated by MYTO II and as considered by the IMR despite the fact that the privatisation was carried out assuming that the GENCOS would be paid based on the PPAs.

    With this, the DISCOS are allowed to pay less than the total bill to the GENCOS, though the balance is accrued as a debt to be paid in the future.

    The source explained that there is no timeline  for the IMR duration and besides, it is only a simple statement without any enforceable value, adding that though the IMR establishes that GENCOS and DISCOS will get the balance of the payments not paid, there is no precision on how or on when that would happen. It is unthinkable that such vagueness in those aspects was adopted in the IMR, the source added.

    “There is not any kind of bankable guarantee that investors could use to get the additional financing from financial institutions to cover the gap that this situation is producing. This may produce serious delays in the ATC&C loss reduction plans by DICOS and capacity recovery plans by GENCOS.

    “There are reasons to say that there is a breach of the commercial rules under which the privatisation was carried out and bidders made their commercial offers,” the source said.