Challenges of Coal to Power Challenges of Coal to Power and Prospects of Renewable and Prospects of Renewable

Energy in NigeriaEnergy in Nigeria

Low hanging fruits for government and private Low hanging fruits for government and private sector investmentsector investment

ByByDonald Ikenna Ofoegbu Donald Ikenna Ofoegbu

for the for the Centre for Social Justice Team Retreat, AbujaCentre for Social Justice Team Retreat, Abuja

INTRODUCTION; seeing the problem• Over 40% of the Nigerian population do not access to grid electricity• For the over 60% that are connected to the grid, more than 35% do not have steady

and affordable power supply. Invariably over 75% of Nigerians do not have access to regular power.

• Over centralized and dependency on Gas to power. 80% of Nigeria’s grid electricity comes from Gas thermals and 20% from Hydro.

• Gas thermals are faced with; (1) Insufficient gas supply, (2) poor gas infrastructure, (3) no cost reflective gas price and tariff, (4) pipeline vandalism and militancy., (5) No gas infrastructure investment (6) the corruption element

• Total electricity supply as at 2016 is 13,000Mw; 60% from Self Generators (running on fossil fuel) and an unstable 40% from public supply (the grid)

• Weak grid system; with high risk of collapse, breaking at 5000Mw• Privatization of the distribution network lead to more failure; forcing the

introduction of the stabilization fund ($213billion)• Ambitious target to generate 40,000 MW of electricity by 2020• Too much emphasis being paid on increasing power generation; with little

knowledge on how to increase and expand the grid capacity.• Zero competition; regional monopoly in generation and distribution.• Rising tariffs and more blackouts.

Source: Fed. Ministry of Power (June 22-23)

60% of total base load located in the southern part of Nigeria; appx. 70% of total generation also comes from the southern part. The northern part of the country has no generation system that feeds into the grid.

Part of the issues In implementing th e gas master plan, is that the gas infrastructure map, stretching from the SW-SE to the north, is highly capital intensive, require huge cost from security, creates more centralized

system and regional dependency.

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Hugely underserved market

2 ▪ 2nd largest energy access deficit globally (~100m people)

▪ Only ~40% of 170m population has access to grid electricity

▪ Demand massively exceeds available power supply of ~4.5 GW

▪ One of the largest markets for diesel/petrol power generators

Adverse economic impact

3 ▪ Power represents 40% of cost of operations to business owners

▪ 83% of Nigerian business owners consider power to be the biggest obstacle to business growth

Inefficient energy chain

▪ High aggregate technical and commercial losses in distribution (42%) and transmission networks (8%) in 2015

▪ Grid break at 5000MW +1000

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Strong strategic positioning

1▪ 7th largest crude oil exporter ▪ 8th largest natural gas reserves▪ Regional economic heavyweight▪ Enough gas reserves to power Nigeria and West

Africa▪ Rich renewable energy endowment

Nigerian Energy Sector: A Transformational Opportunity

Power Consumption: kWh / capita

• Within the discuss of SUSTAINABILITY, the definition and estimation of COST have gone beyond mere purchase face value. In the estimation of cost, more externalities, and futuristic variables are now put into the cost arrival model.

• SUSTAINBILITY is that activity, choice and action (s) taken by an society, individual, state or economy to meet the needs and optimize the potential of the present generation, while planning, preserving, protecting and acting to maintain a health environment, resources availability and ideas for the future generation.

• Energy cost , allocation and choices is now been estimated and made on the basis of sustainability.

HOW SUSTAINABLE IS COAL, WHAT IS COAL GOOD FOR?

PARADIGM SHIFT

PARADIGM SHIFT• The choice of coal or the proportion of coal in the Nigeria’s power mix must

not be guided on whether or not other countries have used coal for industrial development.

• As industrial development in the world history can hardly be ascribed majorly to the availability of coal or any energy source.

• Though energy serves as a major technological catalyst, real economic development is driven by good leadership/governance, fairly competitive market conditions, innovation, business openness, fair regulations, and research. If this is not true, so many third world; developing and underdeveloped country would today top the world not only in the energy market, but also in the council of ruling developed states. As beneath these countries not only walk on raw energy sources, but live in them.

• Nigeria plans to generate 30% of its total energy supply from Coal by 2020. There is however, no roadmap or plan on how this is suppose to come to reality. No working plan.

In 1999, the NCC lost its monopoly over the Nigerian coal industry.In 2002, work stopped at NCC-operated minesIn 2003, the Nigerian government announced plans to create a technical advisory committee to revive the coal industryBy 2004, the technical committee had still not issued their report, and the NCC found itself almost bankrupt.

NIGERIA’S COAL INDUSTRYNigeria still

holds large coal reserves,

estimated to be at least 2.8

billion metric tons

NIGERIA’S COAL INDUSTRY• As at 2014, there were 15 coal blocs in the country out of which 9 were

allotted to private investors while 6 were reserved for the coal-to-power programme.

• In the last attempt to privatise them, 3 of them were successfully bought. The remaining 12 are still available out of which 6 were taken out and dedicated to the coal-to-power programme and their development will be supervised by the Ministry of Power.

• Aside the short fall in initial investment, coal investment have been rather low in Nigeria, this also attributable to meeting environmental and social criteria's such as conduct of standard EIA for mining, compensation and reaching agreements with communities; as stipulated in the Nigeria Mineral and Mining Act 2007.

• Many mining companies just want to rape the ground really fast and run away. Thus the ministry must be strict and enforce 100% all requirements of the Act.

NIGERIA COAL MINING IN TONNES

NIGERIA’S KEY COAL LOCATIONLegend

Coal ore

Coal found in the North Eastern,

Central and South Eastern Part

FACT ON NIGERIA’S COAL• Nigeria still holds large coal reserves, estimated to be at least 2.8 billion metric

tons• Nigerian coal has been found suitable for boiler fuel, production of high calorific

gas, domestic heating, briquettes, formed coke and the manufacture of a wide range of chemicals including waxes, resins, adhesives and dyes. Their characteristic properties (low sulphur and ash content and low thermoplastic properties), make these sub-bituminous coals ideal for coal-fired electric plants. Some Nigerian coals can be used to produce formed-coke of metallurgical quality.

• On the face value, coal is cheap, and abundant.• Coal is very reliable for base load electricity; but has a slower switch system

compared to gas (which is a better base load system)• Nigeria plans to generate 30% of its total energy supply from Coal by 2020• The external cost of coal is very much on the high side considering its adverse

effect on the environment, human health, loss of water and pollution of water systems; another Niger Delta Militancy Saga

• The face value of coal in the nearest future will likely increase, as most countries are abandoning coal plans for cleaner energy sources.

Facts; The No Go Area of CoalDigging up coal and using it to generate electricity releases emissions that intensify the greenhouse effect. No Other Source Of Energy Contributes As Much To Greenhouse Gas Emissions As Coal. Therefore, Coal is one of the biggest sources of climate change.

Global coal consumption fell between 90 and 180 million tonnes in the first half of 2015, the largest drop on record. Driven by China, the global coal consumption dropped

In 2014 Coal was responsible for emitting 14.2 gigatonnes of CO2. That is 44% of all energy-related carbon dioxide emissions, and more than one-quarter of all greenhouse gas emissions.

Private companies, state-owned enterprises and government-run industries have made huge profits from producing and selling coal. But they have not been held accountable financially or legally for the loss and damage they have caused,

and continue to cause, around the world.

The coal industry no longer deny the harm coal production is causing.

• The majority of coal is burned to produce heat and electricity. That releases a lot of carbon dioxide, along with smaller quantities of methane (CH4) and nitrous oxide (N2O); that affect the humans and the environment differently.

• The amounts of CO2 and other greenhouse gases emitted for each kilowatt-hour of electricity produced depend on the carbon content of the coal and the efficiency and operations of the power station.

• Only about one-third (1/3) of the heat generated from burning is converted into electricity by turning water into steam that spins a turbine.

• Gas-powered plants emit only half as much CO2 as modern coal-fired power stations.

COAL FOOTPRINTCoal pollutants affect all major body organ systems and contribute to four of the five leading causes of mortality in USA; heart disease, cancer, stroke, and chronic lower respiratory diseases. Each step of the coal life cycle, mining, transportation, washing, combustion, and disposing of post combustion wastes impacts human health.

According to the reports issued by the WHO 2008 and by environmental groups in 2004, coal particulates pollution are estimated to shorten approximately 1,000,000 lives annually worldwide. The Environmental Defence Fund in a study estimate that between roughly 6,000 and 10,700 annual deaths from heart ailments, respiratory disease and lung cancer can be attributed to the 88 coal fired power plants. That is between 68 to 121 deaths per coal fired plan.

Real Health Effect and Actions Taken

Bandila: Close to 1,000 die from pollution caused by coal plants in PH: study - https://www.youtube.com/watch?v=D4enJ6Oi-iI

China: Every year, China's pollution causes an estimated 3.5 million deaths. January 2014 saw a fetid smog trap Beijing under pollutants from the region's 200 coal-fired power plants where concentration levels hit 40 times what the World Health Organization deems safe. Outside China's urban areas, disease rates in communities near chemical, pharmaceutical or power plants hit five times the national average. (See Video: The Human Price of Pollution- https://www.youtube.com/watch?v=D4enJ6Oi-iI

25 Of The Most Polluted Places In The World - YouTube https://www.youtube.com/watch?v=TX2vHu_IqZ8&spfreload=10

(HD)Fossil Fuel (Coal) Power Station on China air shoot - air pollution production - YouTube - https://www.youtube.com/watch?v=TX2vHu_IqZ8

Obama to announce new pollution targets for power plants – YouTube - https://www.youtube.com/watch?v=U4OZ6bNhCvI

Coal-fired power plant demolished in E China - YouTube - https://www.youtube.com/watch?v=4FaX7cPkA20

China: The Human Price of Pollution - YouTube - https://www.youtube.com/watch?v=8hHQX-ODKF4 Water in China, an environmental nightmare - YouTube

- https://www.youtube.com/watch?v=bJxDIBIX4rc

Beijing To Shut All Major Coal Power Plants - YouTube - https://www.youtube.com/watch?v=7Ri6ruKPsX8

Coal 101: What's Wrong with Coal? – YouTube -https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0ahUKEwiJ8ZvD_Y_OAhWLXBQKHa6xAG4QyCkIIDAA&url=https%3A%2F%2Fwww.youtube.com%2Fwatch%3Fv%3D9Wv2GKaukZU&usg=AFQjCNGVWEuwx0M4hNbcBCYjuSRXC4R6Bg

India: Coughing up Coal - YouTube - https://www.youtube.com/watch?v=V0YjtRcd61U

IF WE MUST GO THE WAY OF COAL1. If Nigeria must go towards coal, we must first of all accept that the health consequences of

coal-to-power are multiple and have widespread and damaging impact. In that light, efforts should me invested to review the readiness of our health sectors; medical centres especially in the coal states to attend and treat these cardiac and respiratory illnesses.

2. Nigeria need to debate and dialogue on the availability of water in the coal areas; not only need to feed the coal plants, but enough to substitute polluted streams, water beds and public need (especially with the now experiencing drought evidenced by the drying Lack Chad).

3. Bold debates needs to be initiated especially at the floor of the States and National Assembly on the ways to ensure that mined sites are recultivated and reclaimed by mining companies. The Ministry of Environment, NESREA, Solid Minerals and CSOs can push towards such responsible action.

4. While capping the coal megawatts in an attempt to phasing out coal in possible future, both federal and state governments should consider proactive incentives towards renewable energy technology, as a more decentralised renewable energy source is key to Nigeria’s unique energy growth path and should be prioritised.

5. The nation must develop its capacity to generate electricity from clean, safe, renewable sources so that existing coal-fired power plants maybe phased out without eliminating jobs or compromising the nation’s ability to meet its energy needs

If FG does not pay strict attention to hold mining companies accountable states and

their indigenes will have to bear the burden of pollution, reclamation and

recultivation in the future. Hence effort should be made to establish State MIREMCO. However, they need to

boarding the committee representation to involve CSOs and Community

representatives. NMMA2007 Pt2, Sec 19 allows this.

The Minister of Solid Mineral in accordance to the Nigerian Mineral and Mining Act 2007, must enforce allocate funds to provide mechanisms to ensure full compliance with the act. i.e Part 2, Section 16:

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Part 2, Section 18, The Fed Mines Environmental Compliance

Department should be established with autonomy to function

effectively. Review of reports esp environmental reports on proposed mining area needs to be public and

properly represented by key stakeholders CSOs, mining

community, and environmental experts.

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IF WE MUST GO THE WAY OF COAL

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To avoid the abuse of the Land Use act by State Governors, CSOs must have access to review the licenses and relative documents of licensed mine operator, so as to ensure due procedure and compensation of affected communities. PT 2, Sec 22 NMMA 2007

In accordance with Part 3, Sec 30 and 34 of the NMMA 2007, CSOs and State govt must demand for openness and public submission by the mining companies these tax deduction along with their profit books. The fraction of this tax also needs to be determined.

The minister must ensure public openness of this fund, to show accountability and transparency in its collection and report on its usage.

Where mining companies in the past have not being remitting this sums, they must be made to meet up with arrears.

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In line with part 4, Sect 61, State & LG as well as CSOs must play oversight role to ensure that all obligations are met by the licensed mining company. The same oversight is required to ensure that Part, 8, Chapter 4, is omitted; environmental safety, compensation, use of water, etc

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There is also a vital need to train and retrain the mine inspectors in each zones as well as the Fed Mines

Environmental Compliance Department.

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Coal can be put to other use;Despite of the weakening development condition of the coal industry, there stills exists a potential future for the coal briquetting machines. Coal briquetting plant gives a good answer to the question of easing the pollution pressure in the coal industry. We can limit the use of coal for cooking, coal briquetts

Coal briquettes are common green coal

resources with features of low cost, energy saving and simple production

and excellent performance, so

they are promoted all over the world.

POTENTIAL OF RENEWABLE ENERGY IN NIGERIA

Nigeria Economic Reality High Unemployment Rate at 23.9%

Inflation at 16.4%

2nd Highest Maternal and Infant Death Rate. Poor Health System/

Food Shortage and Ironically Wastage; poor agric system and Practice

Nigeria records the highest rate of deforestation in the world (FAO) 3.5%, approximately 350,000-400,000 hectares per year as at 2005.

Wide gender inequality

Highest out of school children in the world, and poor learning environment worsen by climate change and no electricity.

Epileptic infrastructure ,poor road, poor access to electricity, deficit housing

Persistent resource conflict induced from an over centralised systems and restricted markets.

Fossil dependent Economy

Disaster Vulnerability;Flood, Erosion, Drought, Desertification, Heat Waves

ENERGY MAPPING IN NIGERIA

• Renewable Energy technology best fits into the Nigerian Renewable Energy technology best fits into the Nigerian energy palaver i.e the poor national grid capacity, the huge energy palaver i.e the poor national grid capacity, the huge number of off-grid community lacking access to grid number of off-grid community lacking access to grid electricity, and the monopolistic structure of existing energy electricity, and the monopolistic structure of existing energy market (neither supplying energy nor making it affordable). market (neither supplying energy nor making it affordable). Adaptation of RE will speedily eliminate these challenges Adaptation of RE will speedily eliminate these challenges and force competition and efficiency in the energy market.and force competition and efficiency in the energy market.

Nigeria Electric Power Policy (NEPP) – 2002.....75% electricity supply coverage by

Y2020

National Energy Policy (NEP) – 2003.….The nation shall commercially develop its

renewable energy resource and ensure a balanced energy mix.Electric Power Sector Reform Act (EPSR) – 2005….Established the Regulator to

ensure an efficient and competitive electricity Industry

Rural Electrification Policy Paper – 2009….. at least 10% of renewable energy mix

by 2025

Power Sector Reform Roadmap – 2010…… Demand a National Energy Efficiency

and Conservation policy to be developed

National Renewable Energy & Energy Efficiency Policy - 2015 ….. Dedicated to

SustainableEnergy Development

National Determine Contribution (NDC)- 2015 ….. Require development of 13 GW

RE by 2030

RE & EE POLICY LANDSCAPE

POLICY INCENTIVES FOR PRIVATE BUSINESS SECTOR

• Tax incentives to manufacturers of RE & EE equipment and accessories of up to 5-7 years

• Tax holidays on dividend income from RE & EE domestic investments • Provision of soft loans with low interest• Free custom duties (2) years on RE & EE equipment importation and

materials projects• Federal Government and States assisting in allocation or grant of

lands• Provision of defined incentives for home owners to install RE & EE

appliances and lightening• Grant to communities-based RE & EE projects and processes• Sustain the 2012 fiscal policy of zero duty for power equipment and

devices.

Investment Opportunities for Renewable in NigeriaInvestment Opportunities for Renewable in Nigeria• SE4ALL AA Requires € 62 billion. Electricity Access & Renewable accounts for 78%

of the financing requirement. The annual financing requirement associated to SE4ALL varies from €2.5 to € 4 billion Annual. EE financing requirement is € 500 million.

• Power 4 All project; Scalling Off-Grid Energy $36million to power enterprenuers and investors to connect 20mn homes in SS-Africa – USAID + DFID. In Nigeria SMEs contribute over 45% to GDP contribution but suffer huge energy cost of over 40% biz overhead. Pay-As-You-Go Solar an instalment payment plan can be harnessed and financed by CBN, and FG, Clean Ovens to save trees from traditional ovens, Renewable for Extending Agricultural Value Chain, Solar for irrigation, solar for storage i.e. Milk collection, solar for processing cassava processing, tomatoes, etc.

• $2.5bn 14 solar firms and NBET in a Power Purchase Agreement (PPA). PanAfrican Solar (75mw katsina), Middle Band Solar (100mw kogi), Nig Solar Capital Partner (100mw Bauchi), Afrinergia Power (50mw Nasarawa), Motir Dusable (100mw Nasarawa), Nova Solar 5farm ltd (100mw katsina), KvK Power (100mw Sokoto), LR Aron Power (100mw FCT), Nova Scotia Power Dvt (80mw Jigawa), Cosmos (70mw Plateau), etc.

WHAT WE CAN DOEngage the Ministry on Solid Mineral and the Ministry of Environment on implementation of the NMMA 2007. Check the number of licensed companies, review their compliance to the act especially as regards environmental safety.

Organize State Governors, their environmental team, community leaders in the coal areas on their right as a coal host community and the dangers of coal mining and how if they do not put up proper sustainability mechanism, they would have to bear the burdens of pollution, soil degradation, community conflicts from resource curse and displacement, polluted waters.

Establish Regional and State government MIREMCO

Empower coal communities on the health and environmental hazards of coal and equip them on how to bargain again this losses.

Push for a health policy to provide special coverage for the health hazards that come from coal, in the coal host communities.

Track the solid mineral development fund, as well as funds from the GGW projects.

Engage the National Assembly on the need to have an act for Extended Producer Responsibility; identifying the pollution caused in the production process of coal, oil, batteries, etc; producers should be responsible to recycling, recultivation, reclamation, call-back, etc

MoPower, MoFinance: Advocate for a Renewable Energy Act; we have a policy document that is overridden by practice because it is not a low; i.e. Zero duties for Renewable equipment import not implemented, instead what is practiced is the ECOWAS common tariff… We need constitutional backing to open the boarders to RE.

MoInformation, Power, Science & Tech: To avoid substandard RE-products and change of public mindset, MoPower, MoEnvironment and MoScience & Tech need to finance public awareness to showcase the success of RE in various sector. Amplify the success of RE in Nigeria; this can be done using social and traditional media, as well as visual drama. For substandard RE , the ministries can also finance training workshops on RE production, installation, maintenance and repairs as well as checking for NAPTIN, SON, NEMA, NERC, Customs, etc on how to code and identify substandard products.

MoHealth and Education: Ministries can take up strategies especially for the Health and Education sector on ways to improve health services and Education; by financing Solar water projects for PHCs, Solar for Schools sanitation and toiletry (recall Ebola and schools without water). Evidences can be gotten by visiting and getting experiences from schools and hospitals with RE solution.

Compared to other Sub-Saharan countries, RE seem to be springing real fast, what are the barriers to RE inflow into Nigeria, and the energy market? We can have a study to gets the first hand testimonies from RE-investors in and outside Nigeria to identify the barrier experienced first hand. This study can also review the existing regulations and areas needing adjustment. Findings will go to NASS, MoPower, ECN, etc

WHAT WE CAN DO

Agriculture: Initiate research and proposals on how renewable can be used to improve agriculture. Showing various funding models for RE equipments. This can be done in collaboration with farmers cooperatives and renewable experts in the sector. Funding Renewable for agriculture in Nigeria; curbing the waste; coming up with business models. Identifying the regional problem of farm irrigation, especially in areas of droughts, we can initiate projects for provision of solar irrigation system . This can be done using Constituency Funds, CSR of Businesses, State Budgets, etc. We can target Women Cooperative Farmers, Solar investor, the MoAgric and Women Affairs as a pilot. MoAgric and MoWaater Resource should allocate more fund for solar irrigation to tackle food shortage.

SMEs, Youth Entrepreneurship & Women Empowerment: Ministry of Trade and Investment, Youth and Sports, Women affairs and the Federal Ministry of Finance, can create a purse for young entrepreneurs to access funds to go green with cheap affordable solar systems with minimal monthly installment payments with a 5% interest rate to improve their businesses.

Deficit Housing: To address deficit and affordable housing. MoWorks and Housing can look towards adaptation of climate friendly low cost housing estates. Ecofriendly Brick houses that are well ventilated and affordable to the poor Nigerians, with payments put on installment; briefs to the National Assembly and Ministry of Works and Housing can show how such housing schemes are not only green, affordable to the Nigerian people, but are also bankable. The Housing Scheme can be invested in this venture as well as the Pensions purse. Loans from International organizations can invested into green housing schemes. State governments need to tap into the wave of Renewable energy findings. Need for urban cities.

WHAT WE CAN DO

On Budget cost for fuel, generator maintenance: we can begin a campaign to induce MDAs to switch to RE for power generation, since they work during daylight.

Ministry of Science & Technology, Ministry of Labor and Productivity: MoPower need to financing into learning, research for RE technology in Nigeria. This will induce local content and socialization of RE knowledge. MoPower can also sponsor Nigerian Engineering students to study RE technology and their working.

Transport: there is need to invest massively in clean magnetic/electric speed trains. Campaign should be geared on removing high emitting vehicles from Nigerian roads as

they constitute major pollution especially in urban cities. As a measure of raising funds while reducing emission, Vehicle Inspection agency, road

safety in collaboration with the MoEnvironment can introduce CO2 emission devices for vehicles at set limit, where car owners with high emission either park their cars or get to paid fines when caught .

Need to develop marine transport in water areas, against the too much use of emitting vehicles

WHAT WE CAN DO

Final Note

• Yes there is clean coal; but why are nations like China, USA, Netherlands, Germany, etc not buying clean coal (at least from Nigeria); instead of spending money shutting down and abandoning their coal plants. It may be international political economics, but the result of the energy politicking shows that fossil fuel is loosing and we must key to the winning side

The Sustainability ClauseWe cannot walk against time and technology… you cannot beat change; its non longer just fact but reality that the world is going green.Whether propaganda or not; western conspiracy or not; the fact is stirring at us in the face; renewable energy is here to stay and expand; while fossil fuel is loosing its comparative advantage. Nations are investing heavily in renewable research and recording break through, the climate change reality have also supported the need for this energy shift. We cannot pretend, we must search for entry into RE

ThanThank k

you.you.