The Nation Newspaper

Category: Energy

  • Firms must pay their debts, says Otti

    Power firms must meet their debt obligations to banks or lose out, the Group Managing Director, Diamond Bank Plc, Dr Alex Otti has said.

    At a national discourse in Lagos, Otti said the firms were required to pay back debts owed the banks to sustain the relationship.

    He said: “In respect of the firms that bided and bought the assets of PHCN, loans given to them must be paid to ensure mutual growth. The story of power supply is all too familiar with current peak time generating capacity of about 4,517 megawatts when there is estimated latent demand of 19,000 to 20,000 megawatts.

    ‘’We will not mourn a lot about this, but will like to take the discourse to the direction of how our infrastructural deficit can be addressed in an accelerated manner.

    “Good enough, a step has been taken in the right direction with the establishment of a Sovereign Wealth Fund of $1billion and a clear mandate to invest part of the money in infrastructural development. We need to take an additional step to ensure sustainability of this initiative by ensuring that the funding mechanism is agreed upon by all parties – Federal, state, and local governments.’’

    He said privatisation is good, if it is done properly. Otti said the government invested a lot of money on Ajaokuta and Osogbo Steel Rolling Mills without achieving success. He said most banks engage in oil and gas transactions, without having knowledge of what it entails.

     

  • ‘Why NIPPs experience slow growth’

    Delays in securing approval from relevant authorities by contractors is affecting the growth of the National Independent Power Plants (NIPPs), the Chairman, Electric Power Foundation, Otis Anyaeji, has said.

    Anyaeji, in a paper titled: ‘Nigeria’s Power Sector: Contractors’ Expectations,’ and delivered during a stakeholders’ programme in Lagos, said the problems made the plants to generate less than 2,000 megawatts (MW) in eight years. He said the development informed the government’s plan to privatise the plants next year.

    He said some communities are hostile to contractors handling the power projects, following the failure of government to compensate them for using their lands. Others, he said, include delays in getting letter of credits from banks, clearing power equipment at the ports, and hostile treatment meted to contractors working on NIPPs’ sites.

    He said: ‘’ Delays in paying compensation to communities for acquiring their land, or getting Right of Way have affected the implementation of NIPPs. Many communities, after collecting compensation, continue to build new structures on the Right of Way.

    He said often times, the communities mobilise against the contractors demanding for money. A recent case in point is the Jos-Makurdi Transmission Line where armed personnel had to be deployed before contractors could work.’’

    Anyaeji said contractors’ inability to get letters of credit from banks as at when due have affected the execution of the projects.

    ‘’ When a letter of credit is to be issued, bank (locally or foreign) must alert the Central Bank of Nigeria (CBN) and the relevant contractor on the issue. The CBN must then officially communicate same to the Niger Delta Power Holding Company of Nigeria(NDPHC) without which the process of effecting correction in the Letter of Credits cannot start.

    “Long delays are usually experienced before the final notification is received by NDPHC. It is either a Director that would sign the document is out of the country, or other reasons are given.’’ he added.

    Speaking on the issue, the Niger Delta Power Holding Company (NDPHC) Spokesman, Yakubu Lawal, said the power stations are not facing serious problems. Lawal said the government has been trying its best to ensure that the plants achieve their goals of boosting power supply in Nigeria.

    He said: ‘’ There are no significant challenges currently hindering our operation. What we experience is a little problem that is being handled administratively within our organisation and other inter government agencies. NIPP projects in generation, transmission and distribution have progressed significantly with current contribution to national grid put at about 2000megawatts subject to availability of gas to fire the plants.

    He said many of the company’s transmission and distribution projects have been completed , adding that five out of the ten power stations have been fully completed with President Dr.Goodluck Jonathan commissioning two in October 2013.

    The plants, he said, include Geregu II power station (434MW) in Kogi state and Omotosho II (500MW) in Ondo State respectively.

    He said the privatization of the 10 power stations would be completed by mid 2014, adding that the money realised from the exercise will be used the for second phase of the NIPP scheme. Lawal said the scheme will center on construction of more hydro power stations and transmission infrastructure to expand their capacities and serve Nigerians better on completion.

     

  • Refinery privatisation: Senate urged to amend bill

    Refinery privatisation: Senate urged to amend bill

    To ensure that Nigerians are favoured when the four refineries are privatised next year, experts have called for a modification of the bill on investments in the industry.

    Part 1 Section 3 of a Senate Bill 176 ensures that 50 per cent refining capacity should be domiciled in the country. The bill further states: ‘’Nigerian personnel shall constitute a minimum of 75 per cent of the investing company in the petroleum industry in accordance with the law.”

    The President, International Association of Economics Energy (IAEE), Prof Adeola Akinnisiju, said a modification of the bill was necessary in view of the proposed privatisation of Warri, Kaduna, and Port Harcourt refineries.

    He said Nigerians would have enough stakes when the refineries are privatised. ‘’I am okay by the content of the bill because it’s talking about local content initiatives,” he said.

    He, however, argued that no ground would be lost if the bill is modified. When this happens, refinery capacity and petroleum activities are going to be above 75 per cent as contained in the bill. This implies that more Nigerians are going to have controlling shareholdings in the refineries.

    ‘’At present, we depend on importation of petroleum products into the country. By modifying the bill and subsequently privatising the refineries, it means there would be increase in local participation in the industry. This, on condition that, a transparent process is adopted by the Bureau of Public Enterprises,’’ he added.

    According to him, the power sector reforms have set the tone of what to expect in the petroleum industry. The reforms, he said, have resulted in the sale and subsequent ownership of assets of defunct Power Holding Company of Nigeria (PHCN) by Nigerians.

    ‘’We should expect a situation whereby the refineries would be own 100 per cent, once the National Assembly is able to amend the bill. Like what happened in the power sector where Nigerian companies acquired the PHCN’s assets, the same thing is expected when the refineries are privatised,’’ he added.

    Also, the Chairman, Petroleum and Gas Workers Senior Staff Association of Nigeria(PENGASSAN), Mr Folorunso Ogini said, amendment of the bill is good and capable of encouraging local initiatives. He said Nigerians would leverage on the bill to ask for more stakes when the privatisation process starts.

    He cautioned the government on the issue, noting that efforts to sell the government enterprises failed in the past.

    “What happened to the British Airways? What happened to the Nigerian Telecommunication Limited (NITEL) NICON Insurance and other publicly-owned enterprises that the government intended to sell? They are dead because the government failed to follow due process. So, the issue of refineries must be handled with caution to achieve success, ’’ he said.

  • ‘Local oil firms’ll account for 30% production’

    ‘Local oil firms’ll account for 30% production’

    Indigenous oil companies will account for over 30 per cent of oil and gas production in Nigeria in the next five years, the Chief Executive officer, Atlantic Energy Company Limited, Kola Aluko, has said.

    Aluko, in a paper titled: Onshore Niger Delta- A changing landscape, delivered at the African Oil Week Conference in Cape Town, South Africa, said the local companies have the capacity to execute 30 per cent of the businesses in the industry.

    He said: ‘’There are hundreds of underdeveloped discoveries onshore Nigeria, and with the recent divestments of onshore assets by International Oil Companies operating in Nigeria, this would increase the opportunities and access of Nigerian indigenous oil and gas companies to eight billion barrels of crude oil and 46 trillion cubic feet of natural Gas Gross Reserves.

    “Nigerian companies, like Atlantic Energy, have pushed for increased local participation in the upstream sector. As recent as five-years ago, six to seven international oil companies were producing over 97 percent of Nigeria’s oil and gas, now Nigerian companies are producing close to 10 per cent, and I believe we can have 30 per cent ofNigeria’s oil and gas production being produced by Nigerian companies within five years. The time is now for companies like Atlantic Energy and other indigenous companies to step up to the plate.”

    Aluko said ageing infrastructure is one of the problems facing the sector, adding that it has affected the growth of the operators.

    He said the company has formed a strategic alliance with the Nigerian Petroleum Development Company (NPDC)through which it has provided funding, technical and project management assistance to (NPDC).

    He said the firm has invested over $500 million in the project, adding that the initiative has helped in strengthening the alliance with NPDC. He added that NPDC and its Joint Venture partners produce 60,000 barrel of crude oil per day.

  • $300m bio-fuel refinery coming soon

    Plans are underway to establish a bio-fuel refinery worth $300million in Nigeria, the Special Adviser on Private Sector to President Goodluck Jonathan, Prof Chris Boyejo, has said.

    Boyejo, in a statement made available to The Nation, said a Russian firm ‘’OOO Bio- Resurs and some Nigerian oil companies, are partnering on the deal.

    He said: “The scheme is designed to commence immediately with the building of a 30,000 ton bio-diesel installation plant. This will be preceded with the planting of the cash crops that would be used for the production. Research has shown that bio-fuel is environmentally-friendly and the viscosity makes engine run longer and faster.

    ‘’Bio-fuel is the in-thing in Europe, America and Asia and the plant is Euro-certified. The invention has been well tested in some European, American and Asian countries. The bio-plant will produce: diesel, petrol, aviation fuel and kerosene. The total cost of the project is cheaper and the technology is safer, stronger and set to beat any other in the whole world.”

    Boyejo said the partners were yet to disclose the area where the project will be cited in Nigeria.

    He said the first part of signing of agreement between the partners have taken place, while the final signing will take place in Krasnodar, Russia.

    “It is expected that this project will aid the process of diversifying the economy and aid the Federal Government transformation agenda. It is expected that full work will commence at the site to be named in January 2014,” he added.

  • Anxiety mounts over increase in fixed electricity charge

    Fears over possible increase in monthly electricity fixed charges have gripped consumers as 2014 draws near. Though the National Electricity Regulatory Commission (NERC) has prevailed on the power companies not to hike tariffs until power improves, the fears have persisted.

    A top official of one of the distribution firms, who spoke on condition of anonymity, said the companies are making efforts to revisit the issue. The sources said it has become imperative for the distribution companies (DISCOs) to increase the fixed charges and other tariffs. He said fixed charges have been increased over a period of time, arguing that the issue is not new.

    The sources said: ‘’ Under the Multi- Year Tariff Order (MYTO) fixed monthly charge has increased from N75 per month in 2011 to N500 in 2012 and N750/metred customers in 2013. The fixed charge would definitely increase to N1,000 to enable the companies generate more revenues for operation. We are planning to meet NERC on the issue early next year. We hope to get favourable response from the Commission.’’

    A lawyer, Mrs Ponle Olurotimi, said the fear about the increase in fixed charge heightened following a meeting the power firms had with NERC.

    She said tarriff is high, adding that people are paying for the energy they do not consume. She said it is illogical for the power firms to increase tarriffs in the face of incessant power failure.

    ‘’From previous events, it is obvious that fixed charge would increase next year. That would further compound the woes of the consumers. Consumers can only be compensated for any short, or long-term increase in tarriffs when there is regular power supply. Once the GENCOs and DISCOs have been able to improve power supply, there would be little or no resistance to increases in fixed charge for metered consumers monthly,‘’ she added.

    The Managing Director, Addax Photomania Nigeria Limited, Dauda Adesiyan said any attmept to increase tarriffs would further improverish Nigerians, stressing that consumers are groaning under heavy bills. He urged the government not to add to their problems.

    The Secretary, NERC, Ada Ozomenan, said fixed charge is N750, adding that consumers are expected to pay whether they use the light or not. She said the charge is fixed and in line with the regulatory directives, adding that there is nothing anybody can do to stop it.

    On the agitation of Power Holding Comapny of Nigeria’s (PHCN) successor companies for increased fixed charge, among other tariffs, she said the Commission has met with the chief executives of the companies and told them that it would be suicide if they should increase the tarriffs.

     

  • Firm begins innovation contest

    Schneider Electric has launched a new edition of its Go Green in the City Challenge.

    The competition, which has run for three years, is aimed at supporting energy management for more sustainable cities through innovation. It is open to students in tertiary institutions.

    With Go Green in the City, Schneider Electric said it is bringing together and sharing its extensive knowledge on sustainable energy with students, who are future engineers and managers of energy. Using innovative case studies, the group is showing the students that the world is at a critical stage where all must look for effective and innovative ways of reducing energy consumption, for both economic and environmental reasons.

    Entry for the fourth edition opened on November 15, 2013 and will end in February 15. Those eligible are business and engineering bachelor degree students from second year and above, master students as well as MBA students from all over the world. Each contestant must belong to a two member team; one of the members must be female.

    Mrs. Anne Ezeh, Communication Manager, Schneider Electric Nigeria, said: “This competition embodies Schneider Electric’s desire to raise the younger generation’s awareness of the challenges facing the energy sector. Schneider Electric also wants to encourage interaction between the students and its employees. To achieve this, each of the chosen teams is assigned a Schneider Electric employee as their mentor, who works with them during the various selection stages. By doing this, the company wants to prepare student who are passionate about energy issues for their forthcoming working lives and make them more employable.

    “By insisting on selecting teams with at least one woman, the Go Green in the City competition is keen to incorporate a woman’s perspective and approach in the Group’s environmentally-friendly initiatives.”

    The firm portance of gender equality through its diversity policy, because this is the best way to develop the values and skills needed to meet the economic and social challenges of the 21st century.

    2014 as the definitive global student competition for green energy solution. Nigeria, alongside a dozen other countries, is participating in this expanded edition, bringing the total number of countries participating to 31.

    On February 28, 2014, the top 100 teams will be announced and will have a month to begin to work with the help of a mentor from Schneider Electric in order to create a synopsis and a video business case for their idea. The 12 best teams will then be flown to Paris in June 2014 to compete in the final.

    As part of the competition, the students, working in pairs, have to devise innovative, viable and marketable energy management solutions for a more sustainable city, using a case study. The case study must cover the five basic sectors: residential, university, business, water and hospitals. The teams will work for 10 weeks, developing their practical proposals, which must take the current global energy and environmental context into account. Their proposals must combine increased energy demand, protection of resources and social progress, while remaining economically and socially viable.

    The two eventual winners will be given a world tour of Schneider Electric’s sites. On this trip they will meet the Group’s employees and managers and they will also be offered jobs within the company. Since inception in 2010, Go Green in the City has received a total of over 1600 entries from colleges and universities all over the world.

     

  • Refinery privatisation: Senate urged to amend bill

    To ensure that Nigerians are favoured when the four refineries are privatised next year, experts have called for a modification of the bill on investments in the industry.

    Part 1 Section 3 of a Senate Bill 176 ensures that 50 per cent refining capacity should be domiciled in the country. The bill further states: ‘’Nigerian personnel shall constitute a minimum of 75 per cent of the investing company in the petroleum industry in accordance with the law.”

    The President, International Association of Economics Energy (IAEE), Prof Adeola Akinnisiju, said a modification of the bill was necessary in view of the proposed privatisation of Warri, Kaduna, and Port Harcourt refineries.

    He said Nigerians would have enough stakes when the refineries are privatised. ‘’I am okay by the content of the bill because it’s talking about local content initiatives,” he said.

    He, however, argued that no ground would be lost if the bill is modified. When this happens, refinery capacity and petroleum activities are going to be above 75 per cent as contained in the bill. This implies that more Nigerians are going to have controlling shareholdings in the refineries.

    ‘’At present, we depend on importation of petroleum products into the country. By modifying the bill and subsequently privatising the refineries, it means there would be increase in local participation in the industry. This, on condition that, a transparent process is adopted by the Bureau of Public Enterprises,’’ he added.

    According to him, the power sector reforms have set the tone of what to expect in the petroleum industry. The reforms, he said, have resulted in the sale and subsequent ownership of assets of defunct Power Holding Company of Nigeria (PHCN) by Nigerians.

    ‘’We should expect a situation whereby the refineries would be own 100 per cent, once the National Assembly is able to amend the bill. Like what happened in the power sector where Nigerian companies acquired the PHCN’s assets, the same thing is expected when the refineries are privatised,’’ he added.

    Also, the Chairman, Petroleum and Gas Workers Senior Staff Association of Nigeria(PENGASSAN), Mr Folorunso Ogini said, amendment of the bill is good and capable of encouraging local initiatives. He said Nigerians would leverage on the bill to ask for more stakes when the privatisation process starts.

    He cautioned the government on the issue, noting that efforts to sell the government enterprises failed in the past.

    “What happened to the British Airways? What happened to the Nigerian Telecommunication Limited (NITEL) NICON Insurance and other publicly-owned enterprises that the government intended to sell? They are dead because the government failed to follow due process. So, the issue of refineries must be handled with caution to achieve success, ’’ he said.

  • Anxiety mounts over increase in fixed electricity charge

    Fears over possible increase in monthly electricity fixed charges have gripped consumers as 2014 draws near. Though the National Electricity Regulatory Commission (NERC) has prevailed on the power companies not to hike tariffs until power improves, the fears have persisted.

    A top official of one of the distribution firms, who spoke on condition of anonymity, said the companies are making efforts to revisit the issue. The sources said it has become imperative for the distribution companies (DISCOs) to increase the fixed charges and other tariffs. He said fixed charges have been increased over a period of time, arguing that the issue is not new.

    The sources said: ‘’ Under the Multi- Year Tariff Order (MYTO) fixed monthly charge has increased from N75 per month in 2011 to N500 in 2012 and N750/metred customers in 2013. The fixed charge would definitely increase to N1,000 to enable the companies generate more revenues for operation. We are planning to meet NERC on the issue early next year. We hope to get favourable response from the Commission.’’

    A lawyer, Mrs Ponle Olurotimi, said the fear about the increase in fixed charge heightened following a meeting the power firms had with NERC.

    She said tarriff is high, adding that people are paying for the energy they do not consume. She said it is illogical for the power firms to increase tarriffs in the face of incessant power failure.

    ‘’From previous events, it is obvious that fixed charge would increase next year. That would further compound the woes of the consumers. Consumers can only be compensated for any short, or long-term increase in tarriffs when there is regular power supply. Once the GENCOs and DISCOs have been able to improve power supply, there would be little or no resistance to increases in fixed charge for metered consumers monthly,‘’ she added.

    The Managing Director, Addax Photomania Nigeria Limited, Dauda Adesiyan said any attmept to increase tarriffs would further improverish Nigerians, stressing that consumers are groaning under heavy bills. He urged the government not to add to their problems.

    The Secretary, NERC, Ada Ozomenan, said fixed charge is N750, adding that consumers are expected to pay whether they use the light or not. She said the charge is fixed and in line with the regulatory directives, adding that there is nothing anybody can do to stop it.

    On the agitation of Power Holding Comapny of Nigeria’s (PHCN) successor companies for increased fixed charge, among other tariffs, she said the Commission has met with the chief executives of the companies and told them that it would be suicide if they should increase the tarriffs.

  • Firm begins innovation contest

    Schneider Electric has launched a new edition of its Go Green in the City Challenge.

    The competition, which has run for three years, is aimed at supporting energy management for more sustainable cities through innovation. It is open to students in tertiary institutions.

    With Go Green in the City, Schneider Electric said it is bringing together and sharing its extensive knowledge on sustainable energy with students, who are future engineers and managers of energy. Using innovative case studies, the group is showing the students that the world is at a critical stage where all must look for effective and innovative ways of reducing energy consumption, for both economic and environmental reasons.

    Entry for the fourth edition opened on November 15, 2013 and will end in February 15. Those eligible are business and engineering bachelor degree students from second year and above, master students as well as MBA students from all over the world. Each contestant must belong to a two member team; one of the members must be female.

    Mrs. Anne Ezeh, Communication Manager, Schneider Electric Nigeria, said: “This competition embodies Schneider Electric’s desire to raise the younger generation’s awareness of the challenges facing the energy sector. Schneider Electric also wants to encourage interaction between the students and its employees. To achieve this, each of the chosen teams is assigned a Schneider Electric employee as their mentor, who works with them during the various selection stages. By doing this, the company wants to prepare student who are passionate about energy issues for their forthcoming working lives and make them more employable.

    “By insisting on selecting teams with at least one woman, the Go Green in the City competition is keen to incorporate a woman’s perspective and approach in the Group’s environmentally-friendly initiatives.”

    The firm portance of gender equality through its diversity policy, because this is the best way to develop the values and skills needed to meet the economic and social challenges of the 21st century.