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Tag: Power Sector

  • Nigeria’s Zungeru power plant ready to generate 700MW

    Nigeria’s Zungeru power plant ready to generate 700MW

    Nigeria’s second-largest hydroelectricity power station, Zungeru power plant, is prepared to be fully operational, with a capacity of 700 megawatts.

    The announcement was made by the Minister of Power, Adebayo Adelabu, during a media parley with Power Correspondents in Abuja, FCT. Adelabu highlighted the significance of the Zungeru Power Plant, stating that it would contribute substantially to Nigeria’s power generation capacity.

    Read also: Elumelu calls for gas, power sector reforms at NBA conference

    Investigation into DisCo Licence Extensions

    In addition to the update on the Zungeru Power Plant, Minister Adelabu revealed that he has initiated an investigation into the extension of licences for Electricity Distribution Companies (DisCos). The licences, originally granted for ten years from 2013 to 2023, were extended by an additional five years. The Minister expressed concerns about the extension and emphasised the need to review its correctness.

    Privatisation vs. Commercialization of Power Sector

    Minister Adelabu expressed his scepticism about the privatisation of power sector assets, suggesting that commercialization might have been a more suitable approach. He noted the significant financial investment required for the power sector and the challenges the private sector may face in committing to such investments with uncertain long-term returns.

    Potential Review of DisCo Structures

    The Minister hinted at the possibility of reviewing the structures of Electricity Distribution Companies, considering the vast areas of coverage that might be challenging for effective management. Streamlining the areas of coverage could be a potential solution to enhance operational efficiency.

    Cost Reflective Tariffs and Government Subsidies

    Regarding cost reflective tariffs, Minister Adelabu stated that the time is not yet right for the implementation of such tariffs. He acknowledged that tariffs could have been increased earlier, but President Ahmed Bola Tinubu did not approve of it. The government continues to subsidise tariffs until there is convincing evidence of incremental power supply.

    Approach to Power Sector Challengesl

    Minister Adelabu shared insights into his approach to addressing challenges in the power sector. He highlighted the need for a bottom-up approach, as opposed to previous top-down approaches. He lamented the stagnation of Nigeria’s power generation at around 4,000MW over the years and emphasised the importance of tackling the issues from the grassroots.

    Power Sector Retreat and Roadmap

    To address the challenges comprehensively, the Minister announced plans to organise a Power Sector Retreat scheduled between December 12th and 14th, 2023. The retreat aims to develop a workable roadmap for the power sector, outlining strategic plans and initiatives to enhance its performance.

    State Investment Opportunities in Power Distribution

    Minister Adelabu encouraged states to take advantage of the reformed power sector Act by investing in Distribution Companies within their respective regions. He suggested utilising existing power lines instead of creating entirely new power infrastructures, emphasising the importance of optimising resources.

    Minister Adebayo Adelabu provided updates on the operational readiness of the Zungeru Power Plant, the investigation into DisCo licence extensions, and the government’s approach to addressing challenges in the power sector. The emphasis on collaboration, bottom-up strategies, and the upcoming Power Sector Retreat reflects the commitment to revitalising Nigeria’s power sector for sustained growth and development.

  • Elumelu calls for gas, power sector reforms at NBA conference

    Elumelu calls for gas, power sector reforms at NBA conference

    Tony Elumelu, a renowned entrepreneur and philanthropist, has called for more investment in Nigeria’s power sector to address the country’s energy challenges.

    Elumelu, who is the founder of the Tony Elumelu Foundation (TEF) and the chairman of Transcorp Power Limited, made this call recently in Abuja at the Nigerian Bar Association (NBA) annual general conference.

    In his address, Elumelu expressed his concern over the “ironic” situation where Nigeria possesses substantial gas reserves but struggles to efficiently operate its power plants due to a lack of gas supply. He emphasized the importance of establishing regulatory frameworks that can ensure a consistent and robust power supply to support critical sectors such as healthcare and industries.

    He cited the example of the TransAfam Power Plant, which has an installed capacity of 1000 megawatts but could not receive enough gas for testing the 240 megawatts fast power turbines acquired from General Electric (GE).

    He said GE has threatened to pull out of the project because Nigeria could not provide 65mm scuffs of gas needed for the comprehensive testing of the installed fast power plant.

    “For context, 240 megawatts of electricity can power about one million homes in Nigeria,” he said.

    He blamed the situation on a “short-sighted regulatory regime and self-serving policies” that hinder gas production and utilisation in the country.

    He said Nigeria has idle gas fields, and there is so much private capital to make the needed investments for gas production, but the regulatory environment is not conducive.

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    Regulatory reforms

    Elumelu urged the government to create regulatory structures that deliver to hospitals and industries the sustainable, robust power supply that the country so urgently needs.

    He said Nigeria needs to reform its power sector and attract more investment to improve its electricity generation, transmission and distribution.

    He also advocated for the passage of the Petroleum Industry Bill (PIB), which has been pending for over a decade, to provide a clear legal framework for the oil and gas industry.

    He said the PIB would help to address some of the challenges facing the sector, such as fiscal terms, environmental issues, community development, local content and governance.

    He said the PIB would also help to unlock Nigeria’s potential as a gas hub in Africa and enhance its contribution to global energy security.

    Women empowerment

    Elumelu also stressed the importance of investing in women as a way of promoting economic development and poverty reduction.

    He said women are key drivers of entrepreneurship and innovation in Africa and should be supported to succeed.

    He said his foundation, TEF, has empowered over 15,000 African entrepreneurs with seed capital, training and mentorship since 2015, with about 30% of them being women.

    He said his businesses also promote gender equality and women’s leadership, as women occupy key positions in his organisations.

    “Let us invest in our women. When a woman succeeds, families and communities are lifted out of poverty. It is no surprise that in my businesses, women lead and flourish,” he said.

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    Security challenges

    Elumelu also expressed concern over the security challenges facing Nigeria, such as banditry, kidnapping, oil theft, pipeline vandalism and transmission line cuts.

    He said these challenges create uncertainties, fears, deprivation, poverty and untold hardship for Nigerians.

    He called for collective efforts to tackle the security threats and restore peace and stability in the country.

    He said security is essential for economic growth and social development, as well as for attracting investment and creating jobs.

    Tony Elumelu’s address at the NBA annual general conference serves as a powerful call to action. It highlights the urgency of investing in Nigeria’s power sector to tap into the nation’s abundant gas resources and eliminate power shortages. Additionally, the imperative of empowering women and addressing security challenges are key components of the nation’s journey towards progress and prosperity. Nigeria stands at a crossroads, with the potential for transformative change within reach, provided that the necessary steps are taken to address these critical issues.

  • World Bank Approves South Africa’s $497m Komati Repowering Loan

    World Bank Approves South Africa’s $497m Komati Repowering Loan

    The World Bank Group’s Board of Executive Directors have approved South Africa’s request for $497 million (about R9 billion) to decommission and repower the Komati coal-fired power plant using renewables and batteries.

    On October 31, the last Komati unit was shut down at midday, heralding the beginning of what Eskom described as a repowering and repurposing of the site into a renewables, storage, manufacturing and training hub.

    The company in charge of the power station, Eskom, said the concessional loan facility was approved after successful meetings over the past two months in Washington DC, USA, between the firm and World Bank executives.

    According to Eskom, “The loan facility will cover three main components: decommissioning of the Komati power station, repurposing and repowering of the station and other elements of the just energy transition, including provision for the training of Eskom employees, community development and stakeholder initiatives.”

    Read also: USA, Japan Partner With Ghana On Nuclear Energy

    In a statement by the World Bank, the financing of the ‘Komati Just Energy Transition Project’ would be collaboratively achieved through a $439.5-million World Bank loan, a $47.5-million concessional loan from the Canadian Clean Energy and Forest Climate Facility, as well as a $10-million grant provided by the Energy Sector Management Assistance Program.

    Repowering the plant would involve the installation of 220 MW of clean energy solutions, including 150 MW of solar photovoltaic and 70 MW of wind, supported by 150 MW of batteries.

    The global body notated that this initiative also creates opportunities for affected workers and communities. This it said, would be made possible through Eskom’s establishment of a containerised micro-grid assembly factory at Komati, alongside the recent signing of a partnership agreement with the South African Renewable Energy Technology Centre of the Cape Peninsula University of Technology and the Global Energy Alliance for People and Planet to develop a Komati Training Facility.

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    World Bank’s Report on South Africa

    The financing announcement follows closely on the World Bank’s ‘South Africa Country Climate and Development Report’.

    The report projects that South Africa’s transition to net zero will require total incremental financing of R8.5-trillion by 2050 and that the funding gap could be closed only with the support of external resources.

    The report also reiterated that renewable energy represented the quickest and cheapest pathway out of South Africa’s long-running electricity crisis and that two to three more jobs would be created by pursuing such a pathway when compared with the 300 000 jobs that are likely to be shed in high-emitting sectors. 

    However, the World Bank did alert of a timing and spatial mismatch in the labour market and indicated that government interventions would be required to assist vulnerable workers.