A Review of the Nigerian Energy Industry

Electricity generation: FG shifts Focus to coal

Geometric-power11 July 2013, Abuja – Nigeria, a country with an estimated 167 million people, currently generates an abysmal less than 5,000 megawatts, MW, of electricity for domestic and industrial consumption, a situation that has resulted in mass exodus of industries to other countries with better power supply.

Although the government is currently engaged in a privatisation exercise for the power sector, which traditionally consists of mainly thermal and hydro energy sources, with the objective of turning around the fortunes of the sector, it is obvious that this alone cannot effectively address the challenge, hence serious thoughts is now being given to diversifying the energy mix.

The Minister of Power, Prof Chinedu Nebo, has harped on the need to diversify the nation’s energy mix as part of ways to resolving its energy crisis. Presently, the country’s generation energy mix consists of 70 per cent thermal plants, which are entirely based on natural gas as fuel, and 30 per cent hydropower.

Consequently, Nebo stated that in line with global practice, there was an urgent need to diversify the fuel for power generation, stressing that a developing economy like Nigeria needs to have a well-balanced energy mix, while pointing out that coal provides an efficient source of fuel for base-load power plants. To this end, an eight-man Committee was inaugurated in Abuja last week, to develop workable framework that will galvanise the use of abundant coal resources for power generation. The nation’s proven coal reserve amount to about 639 million tons and inferred reserves are in the region of 2.75 billion tons, regrettably however, the coal is underutilised.

Despite the fact that Nigeria is abundantly blessed with coal, with deposits spreading across 19 states with significant commercial quantities in Enugu, Benue, Kogi, Nasarawa and Gombe states, the sector has received very little attention in past efforts at ensuring reliable power supply to Nigerians.

Statistics of the world’s average generation mix show that coal is most embraced, accounting for 41 per cent, gas, 21 per cent while hydro accounts for 16 per cent, with nuclear and oil accounting for 13 and 5 per cent respectively. In South Africa for instance, Coal is said to account for an estimated 93 per cent of power generation, while it accounts for 79 per cent in China. Yet, the resources have been overlooked in Nigeria which is in dire need of power supply.

Speaking at the inauguration of the committee, which is headed by the director of power, ministry of Power, Mr Garba Sanusi, Nebo described the committee’s assignment as very important, expressing optimism that it would bring back to life coal-to-power, which has been in comatose for a long time. “For a nation desirous of the right energy mix, we must change from the current 70 per cent thermal and 30 per cent hydro to embrace other energy sources. It is therefore imperative to have a balanced energy mix,” Nebo insisted.

To this end, the Garba Sanusi-led committee was given a five item terms of reference underpinned by the urgent need for Nigeria to effectively utilise coal for power generation. Top on its term of reference is to review the status and adequacy of available studies and project documents relating to the establishment of coal-fired power plants. It is also to examine the impediments and challenges to the development of coal-fired power plants in the country and make recommendations towards facilitating investment in the coal to power generation.

Other terms contained in the reference include liaising with other stakeholder agencies to review current initiatives of private investors on coal-to-power and advice on areas of possible support and collaboration with the ministry. The committee was also tasked to examine the status of bankable feasibility studies initiated by the ministry of power and advice on the strategy of completing the initiative.

Nebo who assured that the Minister of Mines and Steel Development, Mr Mohammed Sada, was already working to ensure that not only is coal mined, but that it is used for power generation, informed thatan additional 4,000MW of electricity is expected from coal to power. He maintained that the mines ministry is working to ensure that the parameters needed for coal to power are put in place.

Ju;iet Alohan, Leadership.

In this article

Join the Conversation