The organisation responsible for electricity production and supply in Nigeria is the National Electric Power Authority, known as NEPA.
Nigeria has 5900 MW of installed generating capacity, however, the country is only able to generate 1600 MW because most facilities have been poorly maintained. The country has proven gas reserves and around 8 000 MW of hydro development has been planned. Nigeria has plans to increase access to electricity throughout the country to 85% by 2010. This would call for 16 new power plants, approximately 15 000km of transmission
lines, as well as distribution facilities.
Nigeria's power sector has high energy losses (30 - 35 % from generation to billing), a low collection rate (75 - 80 %) and low access to electricity by the population (36 %). There is insufficient cash generation because of these inefficiencies and NEPA is consequently reliant on fuel subsidies and funding of capital projects by the government.
At present only 10 % of rural households and 40 % of the country’s total population have access to electricity. The Nigerian Energy Commission and the Solar Energy Society of Nigeria have been tasked with generating a solar-powered solution for the remote rural dwellers not served by the national power grid.
Nigeria exports electricity to neighbouring Niger via a 132 kV interconnection constructed in 1976.
The Nigerian government is in the process of privatising existing facilities.
It has been reported that NEPA is to be split into 30 units to facilitate its privatisation. The current NEPA is to be broken into smaller units to make it more manageable and attractive to investors. The government is seeking independent power producers to generate and sell electricity to NEPA.
Declining electricity generation from a number of domestic power plants sent the country into an energy crisis during 2000/2001. President Obasanjo introduced a number of measures to ensure that a consistent supply of power was available by the end of 2001.
The country's electrical power demand is high but actual generation is considerably below demand. As a result, Nigeria has experienced an energy supply crisis in recent years. The country is looking towards further development of the country’s hydropower resources to curtail the crisis.
Nigeria holds proven gas reserves and around 8 000 MW of hydropower development has been planned. Nigeria hopes to increase access to electricity throughout the country to 85% by 2010. It has been estimated that this development would require 16 new power plants, approximately 15 000km of transmission lines, as well as distribution facilities. Nigeria regularly exports electrical power to neighbouring Niger, and though, the country experiences regular power failures, several large thermally fired power plants have been scheduled for retrofitting.
Phillips Oil Company (Nigeria), Nigerian Agip Oil Company and the Nigerian National Petroleum Company have 20, 20 and 60 % stakes in a new independent power project planned for Kwale. The project, called Oil Mining Lease (OML) 60, makes use of Nigeria's natural gas reserves and should help to eliminate gas flaring in the country. The total project cost is US$ 425 million and is planned for completion before 2004.
The World Bank agreed in principle in 1998 to finance a $30 million project to renovate the old 21 MW diesel power station near Port Harcourt. Additional funding is likely to be provided by NEPA.
The World Bank has also approved a US$100 million credit to Nigeria for its Transmission Development Project, aimed at addressing inefficiencies in the power transmission and dispatch sub-sectors. The project will involve the restructuring of NEPA, establishing a Transmission and System Operation Company with private sector participation, removing transmission network and system operations constraints to the provision of a stable power supply and developing an efficient wholesale power market. The World Bank's lending arm, the International Development Association has financed the US$100 million credit on standard terms of 35 years maturity, including 10 years grace.
The Transmission Development Project should help to ease immediate power supply constraint on economic growth and will contribute to a new restructured power sector, reversing the current drain on the national budget.
The government has entered into an estimated $800 milliondeal with US-based Enron and its Nigerian partners, Yinka Folawiyo Power Limited to build a 560 MW plant. In the first phase, Enron will generate 90 megawatts from two barges at Ijora. During the second phase, due to commence in October 1999, Enron will
finance, build, own and operate a new 560-megawatt gas turbine power plant to be located at Morogbo, near Agbara. Enron will also be expected to finance, build, own and operate a 280-km 24-inch offshore natural gas pipeline to supply Independent Power Plants (IPPs). It is expected that the project will be completed in 2001.
A subsidiary of AES Corporation has acquired a majority interest in a barge-mounted electric generating business in Lagos. The investment is US$ 225 million and will secure AES with majority share in the 290 MW plant. Power from the plant will be sold to NEPA.
Eskom Enterprises, the commercial arm of South African power utility Eskom, is to roll-out a 380 kilometer transmission line between three Nigerian towns. A deal has reportedly been signed between Eskom Enterprises and NEPA for the 330kV transmission line that will run between the towns of Gombe and Yola, and Yola and Jaling in Nigeria's western regions.
The Lagos State Independent Power Project (IPP) has injected 90 MW into the national grid through the commission of the project’s first phase in 2001. The second phase will add a further 270 MW of capacity. The project uses gas-powered barges moored at the station to generate power.
The southern Nigerian state of Akwa Ibom has signed a US$ 1.5 billion deal with China for the construction of an oil refinery and a power plant. Petroleum products from the refinery will be exported to other West African countries and to Europe. The power plant should also provide the state, which has experienced frequent outages in the past, with a reliable source of power. The refinery and power plant should both be complete by the end of 2003.
Part of the country’s plans to rehabilitate the electrical power sector has been to increase power production facilities. With this in mind, Agip of Italy is constructing a 450 MW plant in the town of Kwale at a cost of US$ 240 million. ENRON is constructing a 270 MW plant for US$ 800 million. Siemens of Germany have planned a 276 MW power plant. Finally, Exxon Mobil have been granted permission to construct and operate a 350 MW plant in Rivers State in the south.
Eskom Enterprises has also been awarded a contract by NEPA to install 1300 kilometres of fibre optic cable on Nigeria’s powerlines.
The Nigerian government awarded a US$ 110 million contract to Siemens Limited for the construction of a gas-turbine plant in Afam. The project will add 279 megawatts to NEPA's existing supply.
ENI, an Italian oil and energy company, signed an agreement with the NNPC to add 450 MW to the national grid. The new gas-fired power plant will be located in the area of Kwale, in the Niger Delta. The project will guarantee power to the southern part of Nigeria via a 330 000 volt aerial line, also constructed as part of the project, which will connect the station to the Onitcha electric hub. The project has an estimated cost of US$ 312 million and is expected to take 30 months to complete.
The Federal Government of Nigeria has approved the building of a number of open cycle gas turbine plants some of which have been co-financed by the Chinese Government. With the construction of Geregu (414MW), Omotosho (335MW), Papalanto (335MW) and Alaoji (346MW) power plants and additional electrical power generation expected from independent power producers (IPP), Nigeria has hoped to increase power generation to above 10,000 MW by 2007.
