All over the world, renewable
generation of electricity has not made a
convincing economic case in the market, although
politically it has the upper hand. Coal and
nuclear continue to take a political battering
at the hands of the renewables advocates while
the politics of energy is being upended by new
implications for natural gas. To this end, the
Presidential Advisory
Committee on Power should focus on policy
decisions that hinges around what we have in
abundance – natural gas and hydro.
The
blacksmith who does know how to forge a metal
gong should look at the tail of a kite. When Mr.
President was in South Africa to watch the
opening ceremony of the 2010 World Cup, he and
is hundreds of aids should have taken some time
of to find out why and how the government owned
power company – Eskom – is forward looking,
efficiently managed and free from corruption.
That should be the starting point for answers to
the questions in Nigerian electricity woes. For
Eskom, coal was the answer; it is thus
reasonable to believe that the future path of
fuel-based power generation in Nigeria should be
gas.
Natural
Gas as Fuel of Choice
When it comes to generating
power, natural gas is more appealing than its
main competitor, coal. Gas burns cleaner,
without spewing lung-damaging particulates and
contributing to acid rain and climate change.
Gas plants are much cheaper and faster to
construct than coal- burning plants— important
considerations for private investors— and can be
used for base load or peak power. And, of
crucial importance to the topic at hand, a
modern gas combined- cycle turbine power plant
emits only about half as much CO2 per
kilowatt- hour as a coal plant.
There is an enormous opportunity
cost in failing to convert this gas to reliable
electricity in Nigeria. The gas lost through
flaring could more than half-fill Nigeria's
electricity needs. Very often mitigation actions
against flaring are seen as strategies to reduce
emissions of green house gases alone. However,
in Nigeria several of the actions needed to
reduce these harmful gases are the same that
would be needed to generate more electricity,
create more jobs and reduce local environmental
problems. The benefits of greenhouse gas
emissions reductions becomes an added bonus.
Nigeria’s best opportunity to
reduce these gases is from ending gas flaring.
Latest available statistics show that gas
flaring accounts for 31.4 percent of a total
54.9 percent of emissions from Nigeria’s energy
sector. Making this currently flared gas
available for electricity production will be the
needed tonic for solving our current power
crisis. The inability of the government to
firmly enforce a ban remains a puzzle. Also,
investments in abundant sources of renewable
energy, stipulated in the Renewable Energy
Master Plan would assist in addressing energy
security.
End to restiveness in Niger
delta
The signing of the Gas Supply
and Purchase Agreement, GSPA, between the
Nigerian National Petroleum Corporation, NNPC,
its Joint Ventures, for the supply of 65 million
cubic feet, mmcf/d, of gas from Pan Ocean’s
Ogharafe Gas Plant to the Egbin Power plant is
another welcome development. But what happens
when militants’ starts attacking oil facilities
due to non implementation of the agreement in
the ‘amnesty’ deal?
To guarantee uninterrupted gas to
these plants, the federal government must
comprehensively resolve the Niger delta crisis.
And who other than President Jonathan could
understand better the plight and agitations of
the people of the oil rich delta. As it stands,
President Jonathan has not taken any concrete
step to seal the fragile truce brokered by
Yaradua. That’s what he should be doing. Failure
to do so will be like building on quick sand.
Hydro
The committee tagged
Inter-Ministerial Committee on Small and Medium
Scale Hydroelectric Power Development in Nigeria
should take a look at the
Three Gorges Dam Project (TGP) in
China. It is the world's largest hydropower
complex project located in one of the three
gorges of the Yangtze River, Xilingxia gorge in
Hubei province. It is expected to generate
150,000GWh excess power than the initially
planned 224,400GWh for a total of 370,000GWh.
Nigeria can generate more that 6000 Megawatts
from hydro alone only if we can change our way
of planning and executing projects
The point
here is that until renewable energy alternatives
are readily available and accessible both in
terms of cost and capacity, any power project
that has less short and long term impact on the
environment in Nigeria should be encouraged.
Cost,
subsidy and privatization
Nigeria is
an energy exporter; the ample earnings from
crude oil have perhaps contributed to the
liberal largeness from the government. However,
subsidies work against efficiency of resource
burden on the government. But at the same time,
subsidies are a political issue and it is hard
to eliminate them. A thorough cost benefit
analysis of subsidies can go a long way in
reducing the political resistance to reducing
subsidies. The reported increase in the price of
gas supplied to power generating industry should
be seen as a welcome development but more is
needed.
The goal of
power generation is to deliver a reliable
electricity supply at a reasonable cost. Any
increase in reliability however involves a cost
that has to be balanced against the benefits
associated with the resulting reduction in the
frequency of power outages. The good news is
that consumer’s willingness to pay for
reliability enhancement in power generation in
Nigeria is very high and will make any power
project economically viable. The results from
some published research indicated that most
businesses and households are willing to pay
more to improve quality of supply. They are
willing to pay to reduce the frequency of
outages. All we need is governments’ willingness
to sell the decentralized power sector to right
firms to manage.
The
Bottom Line: What You See Is What You Get
Electric
utilities around the world are increasingly
showing an ‘overwhelming’ preference for
building natural gas–fueled plants, a trend that
is expected to drive gas past coal as the
dominant North American fuel for on-peak power
production by 2011. Given that gas is less
polluting than coal (by any measure), produces
half as much carbon dioxide (CO2) per unit of
energy output, and requires plants that are
quick to build and not capital-intensive, new
gas reserves appear to position the fuel as a
winner in generating markets.
There exists
an urgent need for action that would address the
enormous challenges faced by most metropolitan
cities and rural dwellers in Nigeria. Action
that will lead to cheaper power sources while
minimizing environmental hazards is the only way
forward. This we can only do by falling in line
with the rest of developed countries in
exploring low carbon energy resources and
greening our economies.
Nigerians
need
abundant, affordable, modern energy,
and this points to private property and free
markets–and adaptation in the face of
uncertainties–and not government ownership and
control of energy resources as is currently
being pursued. The role of government should
start and end with regulation.
Churchill
Okonkwo writes from Washington DC
Churchill.okonkwo@gmail.com
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Published
July 3rd, 2010
