NNPC’s $4.5bn power plant project revives old worries
The Nigerian National Petroleum Corporation’s (NNPC) 3,150 megawatts (MW) gas-fired power plant underway in Abuja, Kaduna and Kano at the cost of $4.5billion has revived concerns about security of source of feed stock and ability of the national grid to evacuate energy produced.
While the national oil company along with some of its joint venture partners already intervenes in the power sector through the 1,000MW Afam (in Rivers state) and Okpai (in Delta state) with access to gas feedstock, this is not the same situation with the 3,150MW power plants planned for completion in 2019.
“This is nothing but a white elephant project,” says Chuks Nwani energy lawyer and vice president of PowerHouse International an energy consultancy.
He further said, “Generation is not the problem, the problem is liquidity in the market and once you get the framework right, generation will start springing up from direction.
“At the end of the day you must run the power plant as a business, otherwise it will not survive. What are the reasons in situating those power plants there when it is difficult getting gas from the Niger Delta? Where would the power go to? Apart from Abuja and Kano that can take over 1,000MW, the rest will be constrained,” Nwani said.
Kola Adeshina, chairman of Egbin Power Plc speaking on the challenges confronting the power station alluded to the shortage of natural gas.
“The situation is worsened by renewed militancy in the creeks of the Niger Delta region, where oil and gas pipelines are being blown up on regular basis. This is a more compelling reason why the federal government must get its acts right in ensuring that peace returns to the region,”
Recent engagements with the militants by the Federal Government has resulted in relative calm and has helped Nigeria ramp up crude production above 1.6 million barrels but the issues have not been fully resolved.
According to data obtained from the Nigerian Electricity System Operator the national grid can evacuate 7,000MW and generation hovers around 4,000MW. Reforms instituted by Babatunde Fashola, minister of Power, Works and Housing aims to push capacity to 7,000MW having already achieved over 5,0740MW in February last year, experts worry about what will happen to the additional energy generated by NNPC.
“Nigeria has estimated capacity of over 11,139MW and the Transmission Company of Nigeria claims it can wheel out 7000MW but the problem lies in the fact that there are significant losses along the lines because they are old,” says O’neal Lajuwomi, CEO of Wave-Length Integrated Power Services, an energy consultant.
He further said, “The way forward is looking into mini grids. Generate power at a location from any source, whether solar, hydro or gas, distributed locally and let them pay a cost reflective tariff.”
Maikanti Baru, NNPC group managing director, through a representative at the recently concluded Offshore Technology Conference (OTC) in Houston, United States of America, said that the gas-fired power plants will generate 3,150MW of power which will be built by the corporation and its joint venture partners will be completed by 2019.
ISAAC ANYAOGU