investment implication for the projected electricity demand and supply

8/8/2019 Investment Implication for the Projected Electricity Demand and Supply

1/28

Investment Implication for the

Projected Electricity Demand andSupply

Dr. A. S. Ahmed

Energy Commission of Nigeria, Plot 701C Central Area, Abuja

Email: [email protected]

Presented at the Energy Commission of Nigeria (ECN) & Nigerian Electricity Commission (NERC)Joint National Workshop

on State Government Participations in Power Sector: Matching Supply with Demand. Sheraton Hotel & Towers, 29-30 th

July, 2008


2/28

Content

Introduction

Status of Electricity Generation

Electricity Demand

Electricity SupplyElectricity Generation

Electricity Transmission

Electricity DistributionConclusion


3/28

Introduction

Nigeria is a large country both in physical size andpopulation, and endowed with huge natural resource.

The country can boast of being the most recognizedpotential African economic giant

This attribute gave the Nigerias leaders since

independence, the confidence to steer the country onthe platform of high-level economic growth, throughnotable programmes like: Investment in the steel development

Large project for agricultural development Large Solid Mineral development project

Investment into development of infrastructure to open-upmodernization of the country


4/28

Introduction

Resources Type Reserves

Crude Oil 36.5 billion barrels

Natural Gas 187.4 trillion SCF

Coal & lignite Over 4 billion tonnes

Tar Sand 31 billion barrel of oil equivalent

Hydropower (Large) 11,250MW

Hydropower (Small) 3,500MW

Fuelwood 13 million Hectares

Animal Waste 61 million tonnes/yr

Crop residual 83 million tonnes/yr

Solar Radiation 3.5-7.0 kWh/m2 -day

Wind 2-4 m/s (annual average)

Source: National Energy Master Plan (NEMP), 2007


5/28

Introduction

Availability of electricity is a sine qua nonfor the

economic and industrial development of any nationThe capita consumption of electricity determines thelevel of industrial activity and hence the developmentcum standard of living of any nation

Inadequate electricity supply is one of the criticalproblems confronting Nigeria for a long time

Consequently, the country cannot take off industrially

until the power supply problem is resolved.


6/28

Introduction

The attribute of being potential economic power has

encouraged the present administration to pronouncethe 20-2020 vision, through the effective and adhereimplementation of the prioritised 7-point agenda

Studies indicated to achieved that the economy and

indeed its infrastructure must grow at an average of13% per annum

The Energy Commission of Nigeria (ECN) developedthe energy projections for four economic growthscenarios, 7%, 10%, 11.5% & 13%.


7/28

IntroductionRanking Countries 2007 GDP

(billion US$)

2007Population(million)

Installed Generation(MW)

Per capiaElectricity(Watts)

1 USA 13,811 305 990,567 1,460

2 China 7,055 1,325 771,512 248

3 Japan 4,283 128 280,716 868

4 India 3,092 1,135 157,786 50

5 Germany 2,551 82 130,204 753

6 Russia 2,088 148 242,879 785

7 United Kingdom 2,081 61 85,088 667

8 France 2,053 64 117,653 851

9 Brazil 1,833 187 103,495 226

10 Italy 1,780 60 90,897 603

11 Spain 1,462 46 80,735 644

12 Mexico 1,345 107 54,485 195

13 South Korea 1,199 49 79,109 879

14 Canada 1,178 33 127,426 1,910

15 Turkey 902 71 45,081 201

16 Indonesia 841 232 48,317 55

17 Iran 776 70 46,572 224

18 Australia 733 21 52,645 1,244

19 Netherlands 642 16 22,306 757

20 Poland 554 38 32,991 35637 Nigeria 292 148 6,862 15


8/28


Nigeria currently has 14 generating plants

Total installed capacity of the currently generatingplant is 7,876MW

Installed available capacity is 4,361.5MW as at Dec.

20074,889.2km of 330kV and 6,319.33km of 132kV linewith a 6,098MVA transformer capacity at 330132kVand 8,090MVA transformer capacity at 13233kV.


9/28


S/N Plant Age InstalledCapacity (MW)

InstalledUnits (no)

AvailableCapacity (MW)

AvailableUnits (no)

1 Kainji 38 760 8 440 6

2 Sapele 29 1020 10 90 13 Afam 25 702 20 300 3

4 Jebba 24 540 6 540 6

5 Shiroro 22 600 4 600 4

6 Egbin 22 1320 6 880 4

7 Delta 17 840 18 540 12

8 Egbin AES 6 270 9 270 9

9 Okpai 2 480 3 480 3

10 Omoku 2 150 6 100 4

11 Geregu 1 414 3 414 3

12 Ajaokuta N/A 110 2 110 2

13 Omotosho New 335 8 80 2

14 Papalanto/Olorunsogo New 335 8 80 2

Total 7876 111 4924 61

Source: Federal Ministry of Energy (Power) Publication, March 2008

Existing Power Generation Capacity in Nigeria


10/28


Generators Amount

per day(litre)

Amount per

annum(litre)

Cost per

annum

Petrol @ N70Litre

5 million 2 3,650 million N255.5 billion

Diesel @ N120per Litre

500,000

(Small)

20 3,650 million N438 billion

3,500(Medium)

100 127 million N15.3 billion

10,000

(Large)

200 730 million N87.6 Billion

N255.5 billion was spend on petrol

N540.9 billion was spend on diesel

Self Generation


11/28

Peak Power Demand in MWhr for the Four Economic GrowthScenarios

Generation

Scenario 2005 2010 2015 2020 2025 2030

Reference (7%) 5,746 15,730 28,360 50,820 77,450 119,200

High Growth(10%)

5,746 15,920 30,210 58,180 107,220 192,000

Optimistic(11.5%)

5,746 16,000 31,240 70,760 137,370 250,000

Optimistic II(13%)

5,746 33,250 64,200 107,600 172,900 297,900

Source: Energy Commission of Nigeria (ECN), 2008


12/28

Generation

Scenario 2010 2015 2020 2025 2030

Reference (7%) 17,303 31,196 55,902 85,195 131,120

High Growth (10%) 17,512 33,231 63,998 117,442 211,200

Optimistic (11.5%) 17,600 34,364 77,836 151,107 275,000

Optimistic II (13%) 36,575 70,620 118,836 190,190 327,690

Power Supply Projection in MW for the Four Economic GrowthScenarios



13/28

Periodic Addition of Power Plant in MWGeneration

Scenario 2010 2015 2020 2025 2030

Annual

AverageIncrement

Reference(7%)

12,941 13,893 24,706 29,232 45,925 5,070

High Growth(10%)

13,150 15,719 36,767 53,444 93,758 8,274

Optimistic(11.5%)

13,238 16,764 43,472 73,271 123,893 10,826

Optimistic II(13%)

32,213 34,045 48,216 71,354 137,500 12,933



14/28

Generation

Percentage contribution of electricity by fuel

Optimistic Scenario Optimistic II Scenario

Reference Scenario High Growth Scenario

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%100%

2010 2015 2020 2025 2030

Coal Gas Hydro Nuclear Small Hydro Solar Wind

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%100%

2010 2015 2020 2025 2030

Coal Gas Hydro Nuclear Small Hydro Solar Wind

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2010 2015 2020 2025 2030

Coal Natural Gas Hydro Nuclear Small Hydro Solar Wind

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2010 2015 2020 2025 2030

Coal Natural Gas Hydro Nuclear Small Hydro Solar Wind


15/28

Investment

(US$)

O&M (US$)

per annum

Coal 1,500 40

Gas 800 14

Nuclear 2,500 75

Hydro 2,000 40

SHP 2,000 45

Solar 3,000 10

Wind 2,000 30

Investment Requirement per kWe

Generation


16/28

Generation

Undiscounted Investment Cost

0

50

100

150

200

250

300

350

400

450

Inv

esmentCost(billionUS$)

2010 2015 2020 2025 2030 Cumulative

Reference Scenario High Grow th Scenario Optimistic Scenario Optimistic II Scenario


17/28

Generation

0

10

20

30

40

50

60

O&M(

billion

US$)

2010 2015 2020 2025 2030

Reference Scenario High Grow th Scenario

Optimistic Scenario Optimistic II Scenario

Undiscounted Annual O&M Cost


18/28

Cost of Generating Electricity per MWhGeneration

0

20

40

60

80

100

120

140

160

GenerationCost(US$)

Coal Gas Nuclear Hydro SHP Solar Wind

Inv O&M Fuel

10,500 scf of gas will produce 1MWh of electricity at US$3.5 per1000 scf

36.6kg of coal will produce 1MWh of electricity at US$ 0.3 per kg


19/28

Generation

There is need for the expansion of gas pipelines for

the supply of gas

Construction of pipeline at the cost of US$3 million

per kilometer

Expansion of gas network to supply for thegeneration of gas for the Optimistic II Scenario isestimated to cost about US$5 billion

Expansion of gas network


20/28

Development of gas infrastructure for production of16 billion scf of Gas per day is estimated to costabout US$16 billion (US$1 million per 1 million scf)

GenerationDevelopment of Gas Infrastructure

15,797,267,193Optimistic II

14,126,595,321Optimistic

10,867,147,257High Growth

7,008,959,877ReferenceGas (scf) per dayScenario

scf=Standard Cubic Feet


21/28

Development of coal mine to supply 60 million tonnes

of coal to the coal power plant is estimated to costUS$6 billion by 2030 (US$100 per tonne of coal)

Construction of railway for transportation of the coalto the coal plant is estimated to cost US$10 billion

GenerationDevelopment of coal mine

55,017,943Optimistic II

49,199,410Optimistic

37,847,565High Growth

24,410,460Reference

Coal (Tonnes) per dayScenario


22/28

Transmission/Distribution

Pre 2000 2006 Post NIPP

330132 kV Trx cap (MVA) 5,300 6,008 11,590

132/33 kV Trx cap (MVA) 5,700 7,805 11,118

330 kV line length (km) 4,495 4,738 6,932

132 kV line length (km) 5,430 6,227 7,036


Transmission


23/28


2006 Post NIPP

33 kV route length (km) 45,252 47,538

11 kV route length (km) 31,973 36,648

0.415 kV route length (km) 232,862 245,905

33/11 kV substation (MVA) 8,149 11,649

33 & 11/0.415 kV substation

(MVA)

11,810 14,878

33/11 kV substation (no.) 1,048 1,311

33 & 11/0.415 kV substation (no.) 32,000 84,170


Distribution


24/28


Nigerias current Transmission and distribution

system capacity is 4,000MW

To expand the current grid and ensure at least30,000MW by 2015 we need about US$7 billion

To expand to 110,000MW by 2020 US$17 billion

Total expansion by 2030 for the 13% growth isabout US$35 billion


25/28

511Total

35Transmission & Distribution

10Coal Transport (Railways)

6Coal Exploration & Extraction5Natural Gas Transportation (Pipelines)

16Natural Gas

439Power Generation

Investment in billion US$Sub-Sector

Conclusion


26/28

The undiscounted total investment need to achieved

the industrial growth by 2030 (Optimistic Scenario II)is about US$511 billion

The undiscounted Operational and Maintenance cost

for the Optimistic Scenario II per annum by 2030 isabout US$53 billion

The financial requirement for Nigeria to achievesustainable energy supply may not be possible for

the Federal Government alone to fund.

Conclusion


27/28

Conclusion

There is need for State Government and private

sector participationViable projects that may suit the immediateparticipation of State Government includes:

Small Hydro Project

Small Thermal Plants using heavy oil Renewable Sources of Energy

Private sector participation includes:

Gas Thermal Plant

Coal Plant

Nuclear Plant

Hydropower Plant


28/28

investment implication for the projected electricity demand and supply

Documents