Investment Implication for the

Projected Electricity Demand and

Supply

Dr. A. S. Ahmed
Energy Commission of Nigeria, Plot 701C Central Area, Abuja
Email: calcu70@yahoo.co.uk

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, 29-30th
July, 2008
Content

Introduction
Status of Electricity Generation
Electricity Demand
Electricity Supply
Electricity Generation
Electricity Transmission
Electricity Distribution
Conclusion
Introduction

Nigeria is a large country both in physical size and

population, and endowed with huge natural resource.
The country can boast of being the most recognized
potential African economic giant
This attribute gave the Nigeria’s leaders since
independence, the confidence to steer the country on
the platform of high-level economic growth, through
notable programmes like:

Investment in the steel development

Large project for agricultural development

Large Solid Mineral development project

Investment into development of infrastructure to open-up
modernization of the country
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

Introduction…

Availability of electricity is a sine qua non for the

economic and industrial development of any nation
The capita consumption of electricity determines the
level of industrial activity and hence the development
cum standard of living of any nation
Inadequate electricity supply is one of the critical
problems confronting Nigeria for a long time
Consequently, the country cannot take off industrially
until the power supply problem is resolved.
Introduction…

The attribute of being potential economic power has

encouraged the present administration to pronounce
the 20-2020 vision, through the effective and adhere
implementation of the prioritised 7-point agenda
Studies indicated to achieved that the economy and
indeed its infrastructure must grow at an average of
13% per annum
The Energy Commission of Nigeria (ECN) developed
the energy projections for four economic growth
scenarios, 7%, 10%, 11.5% & 13%.
 Introduction…
Ranking Countries 2007 GDP 2007 Installed Generation Per capia
(billion US$) Population (MW) Electricity
(million) (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 32,991 356
37 Nigeria 292 148 6,862 15
Status of Electricity Generation

Nigeria currently has 14 generating plants

Total installed capacity of the currently generating
plant is 7,876MW
Installed available capacity is 4,361.5MW as at Dec.
2007
4,889.2km of 330kV and 6,319.33km of 132kV line
with a 6,098MVA transformer capacity at 330132kV
and 8,090MVA transformer capacity at 13233kV.
Status of Electricity Generation…
Existing Power Generation Capacity in Nigeria
S/N Plant Age Installed Installed Available Available
Capacity (MW) Units (no) Capacity (MW) Units (no)
1 Kainji 38 760 8 440 6
2 Sapele 29 1020 10 90 1
3 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

Status of Electricity Generation…
Self Generation

Generators Amount Amount per Cost per

per day annum annum
(litre) (litre)
Petrol @ N70 5 million 2 3,650 million N255.5 billion
Litre
500,000 20 3,650 million N438 billion
Diesel @ N120 (Small)
per Litre 3,500 100 127 million N15.3 billion
(Medium)
10,000 200 730 million N87.6 Billion
(Large)

•N255.5 billion was spend on petrol

•N540.9 billion was spend on diesel
Generation
Peak Power Demand in MWhr for the Four Economic Growth
Scenarios

Scenario 2005 2010 2015 2020 2025 2030

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

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

(10%)

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

(11.5%)
Optimistic II 5,746 33,250 64,200 107,600 172,900 297,900
(13%)

Source: Energy Commission of Nigeria (ECN), 2008

Generation…
Power Supply Projection in MW for the Four Economic Growth
Scenarios

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

Source: Energy Commission of Nigeria (ECN), 2008

Generation…
Periodic Addition of Power Plant in MW

Annual
Scenario 2010 2015 2020 2025 2030 Average
Increment
Reference 12,941 13,893 24,706 29,232 45,925 5,070
(7%)
High Growth 13,150 15,719 36,767 53,444 93,758 8,274
(10%)
Optimistic 13,238 16,764 43,472 73,271 123,893 10,826
(11.5%)
Optimistic II 32,213 34,045 48,216 71,354 137,500 12,933
(13%)

Source: Energy Commission of Nigeria (ECN), 2008

Generation…
Percentage contribution of electricity by fuel
Reference Scenario High Growth Scenario
Coal Gas Hydro Nuclear Small Hydro Solar Wind Coal Gas Hydro Nuclear Small Hydro Solar Wind

100% 100%
90% 90%
80% 80%
70% 70%
60% 60%
50% 50%
40% 40%
30% 30%
20% 20%
10% 10%
0% 0%
2010 2015 2020 2025 2030 2010 2015 2020 2025 2030

Optimistic Scenario Optimistic II Scenario

Coal Natural Gas Hydro Nuclear Small Hydro Solar Wind Coal Natural Gas Hydro Nuclear Small Hydro Solar Wind

100% 100%
90% 90%
80% 80%
70% 70%
60% 60%
50% 50%
40% 40%
30% 30%
20% 20%
10% 10%
0% 0%
2010 2015 2020 2025 2030 2010 2015 2020 2025 2030
Generation…
Investment Requirement per kWe

Investment O&M (US$)

(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
Generation…
Undiscounted Investment Cost

Reference Scenario High Grow th Scenario Optimistic Scenario Optimistic II Scenario

450
400
Invesment Cost (billion US$)

350
300
250
200

150
100
50
0
2010 2015 2020 2025 2030 Cumulative
Generation…
Undiscounted Annual O&M Cost

Reference Scenario High Grow th Scenario

Optimistic Scenario Optimistic II Scenario

60

50
O&M (billion US$)

40

30

20

10

0
2010 2015 2020 2025 2030
Generation…
Cost of Generating Electricity per MWh
Inv O&M Fuel
160

140
Generation Cost (US$)

120

100

80

60

40

20

0
Coal Gas Nuclear Hydro SHP Solar Wind

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

1000 scf
• 36.6kg of coal will produce 1MWh of electricity at US$ 0.3 per kg
Generation…
Expansion of gas network

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 the

generation of gas for the Optimistic II Scenario is
estimated to cost about US$5 billion
Generation…
Development of Gas Infrastructure

Development of gas infrastructure for production of

16 billion scf of Gas per day is estimated to cost
about US$16 billion (US$1 million per 1 million scf)

Scenario Gas (scf) per day

Reference 7,008,959,877
High Growth 10,867,147,257
Optimistic 14,126,595,321
Optimistic II 15,797,267,193

scf=Standard Cubic Feet

Generation…
Development of coal mine

Development of coal mine to supply 60 million tonnes

of coal to the coal power plant is estimated to cost
US$6 billion by 2030 (US$100 per tonne of coal)
Construction of railway for transportation of the coal
to the coal plant is estimated to cost US$10 billion

Scenario Coal (Tonnes) per day

Reference 24,410,460
High Growth 37,847,565
Optimistic 49,199,410
Optimistic II 55,017,943
Transmission/Distribution
Transmission

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

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

Transmission/Distribution…
Distribution

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 11,810 14,878

(MVA)
33/11 kV substation (no.) 1,048 1,311
33 & 11/0.415 kV substation (no.) 32,000 84,170

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

Transmission/Distribution…

Nigeria’s current Transmission and distribution

system capacity is 4,000MW

To expand the current grid and ensure at least

30,000MW 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 is

about US$35 billion
Conclusion

Sub-Sector Investment in billion US$

Power Generation 439
Natural Gas 16
Natural Gas Transportation (Pipelines) 5
Coal Exploration & Extraction 6
Coal Transport (Railways) 10
Transmission & Distribution 35
Total 511
Conclusion…

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 is
about US$53 billion
The financial requirement for Nigeria to achieve
sustainable energy supply may not be possible for
the Federal Government alone to fund.
Conclusion…

There is need for State Government and private

sector participation
Viable projects that may suit the immediate
participation 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