Nigeria’s energy mix increases, as grid connected gas power now 74%
by ISAAC ANYAOGU
October 17, 2017 | 5:08 pm| | | Start Conversation
Between May 2015 and May this year, Nigeria’s gas fired power has reduced from 85% to 74% while hydro power on the grid has gone up to 26% from 15% within the same period, according to Babatunde Fashola, Minister of Power, Works and Housing.
“Our response of course has been to diversify our energy sources and optimize other assets for power production by producing an energy mix that targets a 30% component of renewable energy out of the gross energy we produce by 2030,” said the minister at the Africa Today Summit held yesterday in Abuja, that focused on energy options in a low-cost, low carbon world.
Absence of a diversified energy mix has been cited as part of the challenges confronting Nigeria’s electricity sector. While the country has many rivers and potential hydro power sites, long hours of sunshine and biofuel materials, previous governments have made little effort to harness renewable energy.
Fashola is optimistic the country is turning the corner. “Let me be clear and unequivocal by saying upfront that our commitment as a nation and government to pursue renewable and low carbon energy at low cost is clear, firm, and unshaken. But this is not all. It is a commitment driven by necessity, contract, and policy,” said Fashola.
However, progress has been slow. The Federal Government signed 14 solar Power Purchase Agreement (PPAs) with 14 developers to deliver over 1,000 MW in July last year, and a year later, the project has not progressed.
According to the terms of the PPAs, the developers would handle upfront costs of sizing, procuring and installing the solar PV system but foreign exchange liquidity, and inflation pushed the cost of solar infrastructure above their initial projections.
“Capital to build these plants is what is holding it,” said Segun Adaju, president of Renewable Energy Association of Nigeria, last year. “They are still in the process of raising capital, that is the issue.”
For many of the projects, the challenges remain. The Nigerian Bulk Electricity Trading (NBET) PLC had reached an agreement with the solar developers on tariff but it is not clear if the agreed terms will be valid with plans to review electricity tariff.
Nigeria’s solar capacity is now over 1,500MW and growing according to Bukar Kyari, the chairman of Nigerian Economic Summit Group at a recent power conference in Lagos. Rooftop solar is also gaining traction with many homes in rural communities and homes procuring rooftop solar, and this in spite of government inaction.
Companies like Azuri Technologies and Lumos are providing power for over 250,000 households but they have always maintained that the country could achieve more success if batteries are reclassified so it can be duty free and solar components exempted from duties as it is done in countries seeking to deepen renewable energy adoption.
Fashola said that the ministry has resolved problems that stalled work at the Zungeru 700 MW hydro power plant with a new completion date of 2019 and have also awarded the 3050 MW Mambilla hydro power plant after over 40 years of its initial conception.
“In addition, we are in advanced stages of procurement for 6 small hydro dams for private sector operation. What remains therefore is the faithful implementation of these projects to bring on stream their stock of renewable solar and Hydro Power,” said the minister.
These are only six among the 127 potential hydro power sites across 20 states in the country which can generate over 450MW of electricity if revived according to a 2013 United Nations Industrial Organisation Development Organisation (UNDIO).
“These assets are components of dams that were built early in the years to supply water for agricultural process and some with components to generate hydro power. Most of them have been abandoned and if they are revived they could raise our power output,” said O’Neal Lajuwomi, a hydro power operator, in a previous interview with BusinessDay.
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