Business News of Tuesday, 29 May 2018
Nigeria has signalled increasing shift towards the use of coal for the generation of electricity to power its economy as it invests N30 billion in the sector.
The West African country has coal reserves of about 25 billion tons and this, the government is eager to exploit.
Dr. Dauda Garuba, Technical Adviser at the Nigeria Extractive Industries Transparency Initiative, told the Ghana News Agency (GNA) in Abuja that the goal was to “complement the energy mix”.
This comes amid the enormous strain put on the nation’s weak electricity infrastructure by the huge growth of its population and businesses.
Participants at the recent United Kingdom (UK)-Nigeria Trade and Investment Forum in London, raised concern about the situation and asked that urgent steps were taken to tackle it.
About 98 million Nigerians are without electricity, while 65 per cent of schools lack access to power, according to the United Nations (UN).
The country has four major oil refineries with a capacity of 445,000 barrels per day but they are not working at optimum level and are delivering less than half of their capacity.
Dr. Garuba said “even if the refineries were to be working at the optimum capacity we still could not generate what we need to power the economy.”
He added that the electricity problem was having adverse effect on the manufacturing sector and “so, the new thinking is to explore the energy mix option”.
Nigeria, he said, had a long history of coal extraction and mentioned the Enugu coal mines.
“Oil was a later development that we latched on to and then neglected the coal sector.”
Reacting to climate change activists who decry the use of coal because of emissions, Dr. Garuba said, “The challenge for us now is how we get to power this huge economy until we reach a stage where we can make a choice regarding which energy sources to use.”
US President Donald Trump has called on multilateral development banks such as the World Bank to help developing nations make coal production cleaner through the use of the latest energy technology like carbon capture and storage (CCS).
This has been welcomed by countries such as Nigeria, India and Bangladesh.
Dr. Garuba spoke about technical cooperation, and said, that was needed “because energy security is capital intensive, both at the level of financial resources and human capacity.”
“So, we cannot go it alone, but with collaboration, this would present opportunities for experience sharing.
Nigeria will do everything to clean up coal production responsibly while mitigating the impact associated with its extraction.”
This was backed by Mr Sanusi Garba, of the Nigerian Electricity Regulatory Commission (NERC), who confirmed to the GNA that “there are several coal-powered independent power projects (IPPs) at various stages of development by investors.
“It is one of the objectives of the industry regulators to diversify the power generation mix of Nigeria by promoting [the use of] coal and renewables.”
He said “Nigeria will always explore the most environmentally friendly methodology for the mining and usage of coal.
“Where necessary, the IPP developers would partner with appropriate technical partners.”
Nigeria currently has installed capacity of about 7,000 megawatts (MW) but cannot distribute most of this because of poor infrastructure.
There were about eight million electricity consumers on the billing platform of the 11 electricity distribution companies, as of April 2018, and about 50 per cent were metered while the rest were on estimated billing.
“The base customer size for electricity consumers is expected to significantly increase as a result of the ongoing customer enumeration exercise prescribed by the regulator.”
This figure is put at between 10 and 15 million new customers on the billing metre.
Meanwhile, in Kenya, General Electric (GE) has signed a deal with Amu Power to supply its Ultra Super-Critical clean coal technology components and air quality controls systems to the 1,050 MW Lamu Coal Power Plant.
The Lamu plant will account for up to 30 per cent of power generation capacity in Kenya and is seen as a key player in the government’s plans to provide the manufacturing sector with steady, reliable and affordable power.