Unarguably, Nigeria’s oil and gas sector is the mainstay of the country’s economy. One of the biggest challenges killing the Nigerian Electricity Supply Industry in Gas shortage. This major problem crippling the industry has threatened the sustainability of the sector.
Nigeria has been said to hold the largest natural gas reserves in Africa — and the ninth-largest globally, with an estimate of 200.79 trillion cubic feet (Tcf), yet only a little is tapped. The reserve is estimated to rise to 210.8 tcf by 2022.
Considering the huge electricity demand in the country, and the enormous gas thermal power plants, Nigeria must as a matter of principle and policy optimise the use of gas to provide electricity for Nigerians. There are no two ways about that. According to a leading online newspaper, the Transmission Company of Nigeria attributed the country’s epileptic power system to gas constraint, hampering the production capacities of generating companies (GenCos) in the year 2020.
The fact is that, out of the 14,000 megawatts contracted to power generation firms by NBET (Nigerian Bulk Electricity Trading Plc), well over 85 per cent of that are for gas thermal power plants.
The online newspaper also reported that the latest quarterly report of the Nigerian Electricity Regulatory Commission (NERC) shows that gas supply shortage remains a challenge in the sector. “Gas continues to dominate the electricity generation mix accounting for 81.53% of the electricity generated during the second quarter of 2020. This implies that approximately 8.15kWh of every 10kWh of electric energy generated in Nigeria in the second quarter of 2020 came from gas,” the NERC report stated. Though it is the government’s policy to increase renewables over time, as at today, about 85 percent of 14,000MW ought to be fueled by gas. This will help harness this gas to get electricity to consumers, develop the country and increase other sources of electricity is a must for the Nation.
Nigeria’s electricity demand is somewhere around 28,000MW, but then the country can use other sources of renewables such as solar, small hydro plants and wind to develop the remaining amount of electricity that is required in the country.
As of today, the Niger Delta Power Holding Company, the largest power generating company in Nigeria is facing these constraints too. Its Power generation has considerably been limited by gas constraints, a development that has also driven down electricity supply to households and businesses in the region.
These negative developments are against the NDPHC’s desire to ensure homes are lit up in the region. NDPHC generates electricity and sells it to the grid.
Led by its Managing Director, Joseph Choedu Ugbo, the firm is constrained by lack of gas, which is straining the generation of about 4,000MW installed capacity of electricity. With its existing capacity, NDPHC needs close to 1 Billion Cubic Feet of gas or around 825 million standard cubic feet for now.
Despite its capacity of 4,000MW, some of the days NDPHC will do between 500MW and 700MW on the grid. That is not to say its machines are bad, it is because of transmission and distribution challenges. A systemic problem affecting the heart desire of the company.
Ugbo in an interview said, “This is another reason why the NDPHC has to also invest in transmission and distribution to help in the evacuation and distribution of electricity. In those areas too, NDPHC has done significant work. We pride ourselves as having invested about 50 per cent of the transmission assets across the country. We have invested heavily in transmission and distribution assets all over the country, in every state” The NDPHC is a company that belongs to the federation. It is owned by the federal and state governments, as every state government is a shareholder in the NDPHC. It is funded from the Excess Crude Account and so it belongs to the federation. Named Niger Delta Power Holding Company, its first set of projects penned down were gas thermal power plants located near the sources of gas. So this was based on the need to optimise resources, so the plants were sited all across the Niger Delta states, except, Akwa Ibom, where the Federal Government and the state seem to have some relationship in Ibom Power.
NDPHC has its presence in the nine Niger Delta states, plus Olorunsogo in Ogun State and Geregu in Kogi State. So, it is not just in the Niger Delta states.
With its head office in Abuja and projects in transmission and distribution all over the country, there is no state or local government where NDPHC does not have a distribution project implemented since 2005.
Olamide Adeniji is a member of the editorial team of TheScript Newspaper
