Power & Energy | |
Power & Energy | |
2234 VIEWS | |
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Friday, November 03, 2017 9:48AM /FBNQuest Research
Power shortages
remain a primary challenge for businesses as well as households across Nigeria.
The cost of self-generation continues to erode household pockets and weighs
heavily on operational costs for businesses. The Transmission Company of
Nigeria (TCN) has recently estimated generation capability as high as 7,000
megawatts (MW). However, we
understand from industry sources that the national energy wheeling capacity
through the transmission grid is limited to a maximum of 6,000MW, which clearly
dilutes the impact of the headline.
The TCN has been
able to secure US$1.55bn in funding from multilateral donor agencies. This
should assist with building transmission capacity. Over the next four years,
the FGN targets a wheeling capacity of 20,000MW from the transmission grid.
Gas constraints
also contribute to the epileptic power supply. Data from Nigerian Electricity
Supply Industry (NESI) show that on one day in mid-October only 1,360MW were
generated. The reported gas constraint was 410MW while management constraints
resulted in a further loss of 1,994MW. The industry lost N1bn in consequence.
There has been
some traction in ramping up alternative sources of energy. Power generation
from the three hydropower generation companies (Kainji, Jebba and Shiroro) now
account for 26% of Nigeria’s daily power generation.
Given the
frequency of attacks on gas pipelines and assets last year, the FGN’s steps
towards diversifying the country’s energy sources are laudable. We note that
the FGN targets 30% of national energy to come from renewables by 2030.
The potential
impact on industrialisation in Nigeria of increased and steady power supplies
is immeasurable. The onus is on the FGN to attract private capital towards
infrastructural financing to explore the renewable energy segment so as to
accelerate the process of attaining power for all.
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