Due to the recent privatisation of the power sector, opportunities has extended in the whole value chain of the Nigerian electricity supply industry, the festering challenges of fragile transmission network and gas supply are pulling the plug on several Independent Power Projects.
With the national generation capacity of 8,644 megawatts, the actual current generation is less than 3,849MW. The country was able to achieve an all-time peak generation of 4,517.6MW in December 2012.
According to the Managing Director, Eko Electricity Distribution Company, Mr. Oladele Amode, the universal yardstick on power is one megawatt per 1,000 people. Nigeria needs 160,000MW to sustain its 160 million populations for the achievement of optimal industrial, economic and technological development.
The IPPs are privately financed Greenfield invention projects which are supported by non-recourse or limited recourse loans backed by long-term power purchase agreements with the state utility or another off-taker.
With the successful privatisation of the successor creation and distribution companies unbundled from the Power Holding Company of Nigeria, a favourable environment is set for new IPPs for at least 10,000MW by 2015, a new report by Terrapinn said.
According to source, there are still some challenges like the grid and gas supply. Investors and potential investors also say they still oblige more support from the bulk trader and the electricity regulators.
The Chairman and Chief Executive Officer, Nigerian Electricity Regulatory Commission, Dr. Sam Amadi, said the transmission network, a critical link in the electricity value chain under the government ownership and control, was in dire need of attention.
The Chairman and Chief Executive Officer, Nigeria Electricity Regulatory Commission, Dr Sam Amadi said the network is feeble, radial and lacks redundancy facility. In the event of significant boost in actual generation, the transmission network will not be competent of supporting such output, noting that currently, the state of the national electricity transmission network capacity was at about 4,500MW.
He said the thermal generation capacity, as was long expected, had improved significantly with the completion of more National Integrated Power Projects, but the negative side of this otherwise impressive development in generation capability is that for almost all turbines in all the gas-fired thermal generation plants, there is no gas or very little gas is available for use as generating feedstock.