A Review of the Nigerian Energy Industry

Five Discos in talks with Scottish firm on embedded generation

ERERA Power lines22 July 2014, Abuja – Five electricity distribution companies have commenced negotiations with Aggreko, a Scottish business company that specialises in providing temporal power solution and temperature control across the globe, for the provision of electricity supply by embedded generation.

Under embedded power generation, smaller or modular generators that use a variety of generation technologies, such as solar, wind, biomass, diesel, fuel oils, crude oil and small hydro, is directly connected to the distribution network.

Embedded generation is also a useful means of dedicating power to a state or a local government, eligible customers and others.

Aggreko’s Regional Managing Director, Mr. David Taylor-Smith said in Lagos at the weekend that the company was desirous to negotiate with all the 11 electricity distribution companies in the country on embedded power solution, describing it as an exciting opportunity.

Taylor-Smith, who did not disclose the identities of the five Discos, explained that Aggreko, which has its manufacturing company in Scotland, has operations in 28 African countries, including Nigeria.

According to him, the company is providing about 1.3 gigawatts of electricity across the continent.

“There are three markets in Africa where we have set up permanent businesses with our team of engineers and they are Nigeria, South Africa and Kenyan. We chose these countries because their economies are big and also we think that there is huge demand for power in these countries.

“We think that the most exciting opportunities in the whole of Africa is Nigeria because there is a big demand for power and also because we provide power in the oil and gas industry, which is the main revenue earner for the country,” he said.

He added: “We have been working here for a number of years but we have been doing it on a project basis. The important thing now is that all of our team got equipment in-country. We have Nigerian engineers and any time they need more equipment it is quite easy because they keep those equipment mobile anywhere in the world.

“So if there is a need for more power and there is an emergency, we put the power on quickly. Like next door country, Benin we are about to put 15megawatts on and they ask for it two months ago and we are going to put it on next month,” Taylor Smith said.

Aside from embedded power solution, Taylor Smith noted that there are a lot of opportunities in Nigeria to also provide captive power.

“We think there are lots of opportunities to provide captive power and this happens when a company comes to us and tell us they have been using power from the national grid but they want reliable power,  then we put on power on site which could be 10 or 20 megawatts.”

Aggreko’s Regional Managing Director added that there is no quick fix to power problem in Nigeria but reforming the sector is the way forward which he admitted that President Jonathan administration has put in place.

Smith also explained that the successful power reform must be backed up with the right regulatory frame work so that people will know the prices they are charged for.

He noted that Africa with special focus in Nigeria is a potential market but the regulated tariffs are less than the cost of production.

“No business is going to go there if the tariff is less than the cost of production, so there has to be the right regulatory environment,” he said.

Aggreko Nigeria’s Managing Director, Mr. Alaba Owoyemi, disclosed that the company has executed some projects in Nigeria, which were successful though with some challenges.

“In 2005 we have about 20 megawatts in Abuja which was in partnership with Geometric Power. We have also done some jobs with oil companies like Shell and Mobil. At present we are supporting the manufacturing sector; most of the manufacturing companies are depending on us. In the area of challenges, what we are facing is not different from what other multinationals are facing. We are having some complex issues with our import processes,” he added.


– This Day

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