A holistic solution for Nigeria’s power sector

Nigeria

Chiedu Ugbo, managing director and CEO of the Niger Delta Power Holding Company (NDPHC), talks to The Energy Year about gaps in the Nigerian electricity system the company is seeking to remedy and its progress so far in the areas of generation, transmission and distribution. NDPHC is a limited liability company with government stakeholders that was formed to implement the National Integrated Power Projects (NIPP) scheme.

What major power gaps does the Presidential Power Initiative (PPI) aim to remedy across the nation?
The Presidential Power Initiative presents a holistic solution to the challenges present in Nigeria’s power sector today. For the past few years, the average available generation capacity has been around 7,500 MW, out of a total installed capacity of about 28,000 MW. Yet less than 5,000 MW gets to the end user, meaning a major discrepancy between what we actually generate and what reaches the average Nigerian. The problem is our network system – the interface between transmission and distribution systems – which involves major ATC&C [Aggregate Technical, Commercial and Collection] losses.
Collection challenges are largely due to inefficiencies which can be reduced through metering. To this end, the government has rolled out the National Mass Metering Programme (NMMP), which is a major step in the right direction. But there are also technical and commercial losses that require huge investments in our distribution and transmission networks.
Other challenges we have witnessed revolve around revenue, liquidity and cashflow issues. DisCos (distribution companies) are unable to reinvest in improving their distribution networks because electricity prices are too low to obtain margins – and also due to the lack of metering systems. This is bound to change thanks to the implementation of more cost-reflective tariffs and the NMMP rollout. In addition, the PPI addresses all these systemic hurdles, aiming to bridge the gaps found in the power sector and to bring on stream additional generating capacity of up to 25,000 MW by 2025.

Tell us about the advances made by NDPHC across the power value chain in the course of implementing the NIPP scheme.
NDPHC is a private limited liability company whose shareholding is fully subscribed to by the federal, state and local governments. and which has a mandate to manage NIPP power projects. Under this programme we are involved in the whole power value chain, from generation to transmission and distribution, across the nation.
First, when it comes to power generation, we are Nigeria’s largest electricity generating company, producing about 35% of the country’s power. The first phase of the NIPP is designed to hit 5,000 MW of installed power generation capacity and, thus far, we have installed 4,000 MW through eight different power plants. We plan to operate 10 power plants, but two have not been completed yet. The 10 are the Olorunsogo, Geregu, Gbarain II, Ihovbor, Alaoji, Omoku, Egbema, Sapele, Omotosho and Calabar power plants. These are scattered across the Ogun, Kogi, Bayelsa, Edo, Abia, River, Imo, Delta, Ondo and Cross River states.
Despite having 4,000 MW of installed capacity – of which 2,500 MW is mechanically available – we are able to get less than 1,000 MW dispatched due to transmission and distribution constraints. We are now trying to improve the offtake of our power and our short-term goal is to ensure that at least 3,000 MW of electricity is dispatched, consumed and paid for by Nigerians.
Second, we have invested heavily in the transmission network. We have installed multiple transformers of 1×150 MVA (330/132-kV) capacity. We have also done a total of 2,800 MVA, within the transmission network. Furthermore, in the last six years we have rolled out 22 substations and installed close to 3,000 kilometres of 330-kV lines and 745 kilometres of 132-kV lines. Not only have we helped the transmission company by expanding the services of the existing substations, but we have also carried out intervention projects within the transmission network.
Lastly, in distribution, we have been involved in over 85 large-scale distribution projects including injection substations and 32-kV and 11-kV distribution lines, as well as low-voltage lines. Over the years we’ve completed close to 400 distribution projects and we are doing more. In May 2021, we began the construction of a 1×7.5 MVA, 33/11-kV injection distribution substation in Orogun, in Delta State, to boost electricity supply. We have recently also signed agreements with both Eko Electricity Distribution Company and Benin Electricity Company for the improvement of electricity supply.

How successful was your intervention with GE to rehabilitate three of your power plants?
In September 2020, in collaboration with GE, we successfully rehabilitated three 9E.03 gas turbines at our power plants in Calabar and Sapele. These operations reduced the risk of unplanned downtime for power generation equipment, enabling the plants to reliably secure and restore the supply of up to 360 MW to the national grid – equivalent to the electricity needed to power approximately 2 million Nigerian homes.
We have eight power stations in operation using GE technology. Three of them have long-term service agreements with GE for maintaining the plants and carrying out capacity recovery – that is, shutdown and maintenance when the equipment has exceeded the recommended hours of usage.

How much of an issue is power vandalism for NDPHC and how is it tackling it?
One of the major issues we encounter across the entire power value chain is power vandalism. We have had serious cases of theft in the course of building high-voltage transmission networks. When building the transmission towers, we have had thieves stripping off the conductors if the power was not switched on. We have even seen cases where vandals actually cut down the towers and took the conductors. To tackle the issue, we have enlisted security agencies which are working tirelessly to monitor, surveil and secure the networks. The last case we had was in Q1 of 2021 on one of our major lines that was under construction. It turns out that the investment made in security is just a fraction of the losses we suffer through vandalism and power theft.

How committed is NDPHC to incentivising solar and renewable solutions in the country?
As a part of NDPHC’s mandate, we have worked over the years to provide solar home systems for communities without access to electricity. Until now, we have deployed 20,000 of these, but the government is pushing this initiative even further through the Economic Sustainability Plan that was passed in June 2020. On the basis of this plan, we are determined to deploy another 100,000 standalone solar home systems in the country. We have already started by installing 1,000 in Jigawa, in northwest Nigeria.
Moreover, we recently set up a renewable energy department at NDPHC, which is focused on developing more renewable energy solutions – some of them utility-scale. We are in discussions with potential partners, especially in the solar sector, about increasing activities in this area. We are also working on mini-grids and stand-alone projects, in addition to mini-hydro projects which could bring 10-20 MW to the grid at multiple sites. This is a new area but we are committed to being part of the energy transition Nigeria needs.

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