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Tag: national grid

  • Seplat Energy Rising to Nigeria’s Energy Challenge

    Seplat Energy Rising to Nigeria’s Energy Challenge

    Seplat Energy Plc, foremost Nigerian independent energy company, says it is rising to the challenge of energy deficit in Nigeria through its new critical projects, which are capable of taking the company’s gas processing capacity to 850 Million standard cubic feet per day(MMscfd) consolidating the company’s position as a leading gas supplier to the Nigerian market.

    The Director New Energy, Seplat Energy, Mr. Okechukwu Mba, said this while delivering a keynote at the ongoing Society of Petroleum Engineers (SPE) Nigerian Council’s 47th Nigeria Annual International Conference & Exhibition (NAICE) in Lagos.

    Mr. Mba, who represented the CEO of Seplat Energy, Mr. Roger Brown, spoke on the Conference theme: “Petroleum Industry Value Chain Optimization: The Inevitability of Midstream and Downstream Development”.

    He said the company’ new $700m ANOH gas project in Imo State, with a capacity of 300MMscfd of gas in addition to Liquefied Petroleum Ga (LPG) will greatly boost domestic gas supply.

    “Also completing a new 85MMscfd gas plant in Sapele Delta state expected to come on stream by Q4 this year. These new projects bring Seplat Energy’s gas processing capacity to 850MMscfd consolidating our position as a leading gas supplier to the domestic market,” Mba noted.

    He said Seplat energy is also looking to invest in Compressed Natural gas (CNG) projects in support of the government’s CNG initiative, adding that: “When we receive approval for the MPNU transaction, we intend to promptly develop the significant gas resources in the asset to further enhance Nigeria’s energy security.”

    Currently, the country is experiencing insufficient supply of electricity from the national grid (about 4GW daily); very low electricity usage per-capita (with some Nigerians with no access to energy); insufficient supply of gas to some power plants; and with a bulk of electricity used in Nigeria generated off-grid at two or three times the cost of generation using gas turbines.

    To this end, Mba said: “We need to develop our abundant gas resources and deliver sufficient gas to the power sector for energy security. Gas is an affordable and reliable source of energy. Incentives provided in the recent Executive Orders as well as recent review of Domestic Gas Delivery Obligation (DGDO) gas prices are commendable.

    “Current reforms in the power sector need to be sustained like tariff increase, bilateral power trading between power generation company (GenCos) and power distribution companies (DisCos). Key gas infrastructure like the Obiafu-Obrikom-Oben (OB3), The Ajaokuta-Kaduna-Kano (AKK) gas pipelines, and so on, should be delivered.”

  • Feature: Can Our National Assembly Reimagine Nigeria of the Past?

    Feature: Can Our National Assembly Reimagine Nigeria of the Past?

    by Ayo Akinfe

    As our National Assembly appears keen to go back to the past and re-invent Nigeria, sometimes returning to the drawing board, maybe they should consider doing these 10 things too:

    [1] Pass a bill to bring back the 1958 Lancaster House Agreement under which the federating units will control all the resources within their domain, remitting 50% to the centre

    [2] Pass a bill compelling our states to meet their own running cost at the very minimum. In 1959 for instance, the Balewa government passed a federal budget of £50m but the Awolowo government in the old Western Region passed a budget of £55m

    [3] Pass a bill compelling the federal government to match the feats of the Gowon administration that achieved 25% annual GDP growth between 1967 and 1971

    [4] In 1960, our exclusive list had just four items on it. They were defence, foreign affairs, ports and railways. We need a new slimmed down exclusive list with no more than 10 items on it

    [5] Pass a bill abolishing the national grid, compelling all states to generate, distribute and transmit their own power

    [6] Pass a bill making it clear that in a federation, the centre owes its existence to the federating units and not the other way round

    [7] Pass a bill establishing regional security structures that will give birth to local police forces. However, this needs to be backed up with robust laws that prevent abuse and stop governors from using them as private armies

    [8] During the First Republic, every federating unit opened a university. A bill should be passed compellingly every state to own at least two universities, five polytechnics and 12 technical colleges in response to our current educational challenges

    [9] Back in the First Republic, remuneration packages for politicians were modest. What we now need is a bill tying the remuneration packages of governors, ministers, legislators, commissioners, etc, to those of grades within the federal civil service

    [10] Do you know that Yakubu Gowon once prevented his finance minister, Shehu Shagari, from presenting a budget proposal on behalf of his communications minister, Murtala Mohammed, who was away on hajj, saying it represented a conflict of interest. He told Shagari that he cannot present a proposal and then determine the validity of that same proposal. We need the National Assembly to pass a Nigerian Conflict of Interest Bill 2024

  • Feature: Let’s Change the Generator Republic Narrative

    Feature: Let’s Change the Generator Republic Narrative

    by Ayo Akinfe

    Given that this Nations Cup has led to South Africans nicknaming Nigeria Generator Republic, our government should be shamed into acting by coming up with an action plan that looks like this

    [1] As from October 1 2024, no building in Nigeria will be granted a Certificate of Occupancy (C of O) unless it has solar panels installed on its roof

    [2] As from 2026, all buildings in Nigeria must have solar panels installed on their roofs. Not having one will attract prosecution with the risk of the property being forfeited to the federal government

    [3] By the end of 2025, all public buildings in Nigeria must be fitted with solar panels

    [4] By the end of 2026, every local government area in Nigeria must have constructed and commissioned a micro-grid that can distribute enough electricity to power its territory

    [5] By the end of 2026, every state government in Nigeria must have constructed and commissioned a mini-grid that can distribute enough electricity to power its territory

    [6] By January 1 2027, each of Nigeria’s eight coastal states must have built an offshore wind farm

    [7] By January 1 2026, every state must have a minimum of one solar farm that measures at least 10 square kilometres

    [8] By January 1 2027, all street lights in Nigeria must be powered by solar energy

    [9] By January 1 2027, every industrial estate in Nigeria must generate its own power. All such industrial estates will be disconnected from the national grid by October 1 2027

    [10] As from January 1 2025, it will be illegal to import electricity generators into Nigeria

  • Manufacturers Association states position on Automotive Gas Oil (AGO)

    Manufacturers Association states position on Automotive Gas Oil (AGO)

    The Manufacturers Association of Nigeria (MAN) is the voice of manufacturers in Nigeria and the leading Business Membership Organization in West Africa and the African Continent. The Association represents the interests of over 3,000 manufacturers (small; medium; large and multinational industries) spread across 10 sectors, 76 sub-sectors and 16 industrial zones and currently leading the Federation of West African Manufacturers Association and Pan African Manufacturers Association. Manufacturers are heavy users of electricity in Nigeria and this naturally necessitates our keen interest in all electricity and alternative energy supply-related discourse and development. 

    The manufacturing sector in Nigeria employs over 5 million workers, directly and indirectly with 8.46% contribution to Gross Domestic Product. The sector also dominates export trade in the West African region, generate foreign exchange, and contributes substantially to revenue for Government and human capital development in Nigeria. It is therefore imperative that manufacturing be given priority attention and safeguarded against a steep deadline. This should be backed by a comprehensive and integrated support system during times of crisis. Its performance should be enhanced through a pro-manufacturing policy that will encourage scale and lower unit cost of production. 

    Over the years, the manufacturing sector has been battered by numerous familiar challenges that have plummeted the number of industries in Nigeria and converted industrial hubs in many parts of the country to warehouses of imported goods and event centres. Top on the list of challenges confronting the sector is high operating cost environment occasioned largely by inadequate electricity supply and the high cost of alternative sources, excessive regulation and taxation, and inadequate supply of foreign exchange for importation of raw materials, spare parts and machinery that are locally available. All these have culminated into the lacklustre performance of the sector. 

    2.0 THE RECENT OVER 200% INCREASE IN THE PRICE OF AGO

    Global events have shown that the world is like a village. The emergence of a challenge in one country can become a major constraint with spiral effects for the world. Often times when disruption occurs in any part of the global economy, only countries with functional institutions and strong internal economic mechanisms will be able to respond appropriately to such external shocks.

    The current increase in prices of crude oil and other refined petroleum products such as diesel is one of such disruptions occasioned by external shocks that confirms the interwovenness of economies in the world. No doubt, the recent short supply and over 200% increase in the price of AGO are part of the backlashes from the ongoing invasion of Ukraine by Russia. This resulted in numerous economic sanctions on Russia by the US and EU, which propped up the price of crude oil to $120 per barrel (now moderated to about $100) as Russia oil export is isolated.

    3.0 MANUFACTURERS’ CONCERNS

    The Manufacturers Association of Nigeria is greatly concerned about the implications of the over 200% increase in the price of AGO on the Nigerian economy and the manufacturing sector. More worrisome is the deafening silence from the public sector as regards the plight of manufacturers. Four obvious questions that readily come to mind that are seriously begging for answers are- What can we do as a nation to strengthen our economic absorbers from external shocks? Should manufacturing companies that are already battered with multiple taxes, poor access to foreign exchange, and now over 200% increase in the price of diesel be advised to shut down operations? should we fold our arms and allow the economy to slip into the valley of recession again? Is the nation well equipped to manage the resulting explosive inflation and unemployment rates?

    In the short term, the disruption occasioned by the invasion of Ukraine by Russia will continue to heavily ruffle the global energy space and upset the supply of petroleum products thereby causing a persistent increase in the price of refined petroleum products including AGO. In the long run, it will result in enormous increase in the prices of other manufacturing inputs like wheat, maize, fertilizers and the raw materials. By the time the current domestic reserve of manufacturing inputs is exhausted, in the face of acute shortfall in supply, we are afraid that the prices of manufactured products will soar. Ironically, the Nigerian economy is completely dependent on importation of refined petroleum products including diesel and other vital manufacturing raw materials and there are currently no sufficient alternatives.

    We are concerned about the implications of the sharp increase in the price of diesel on the manufacturing sector, which includes:

    • The exertion of untold hardship on the manufacturing sector leading to the closure of many industries, leading to reduction in capacity utilization, further decline in GDP, large-scale unemployment across 76 sub-sectors and increase in crime rate;
    • Further decrease in foreign exchange earnings from the manufacturing sector as high cost of production feeds into export commodity prices;
    • Sharp reduction in Government tax revenue occasioned by the drop in sales, lower profitability as lesser quantum of disposable income will be available to purchase manufactured goods;
    • Reverse-multiplier effect, as cost of production escalates and the headways already made in the sector are grossly eroded;
    • Negative spiral effects on every sector of the economy, resulting in hyperinflation, lower productivity and turnover;
    • Depressing trickle-down effects on productivity, unemployment and standard of living of the citizenry;
    • Uncontrollable incidences of insecurity with dangerous implications for economic and social wellbeing of over 200 million Nigerians.
    •  MANUFACTURERS’ EXPECTATIONS

    In light of the gravity of the precarious situation that we have found ourselves as a nation and the looming dangers ahead, the expectations of manufacturers in Nigeria are as follows: that Government should

    • As a matter of priority develop a National Response and Sustainability Strategy to address challenges emanating from the ongoing invasion of Ukraine by Russia;
    • Continue to support manufacturing to accelerate the process of recovery from the aftermath of COVID-19 and previous bouts of recession to avert the complete shutdown of factories nationwide with multiplier effect on the employment;
    • Issue licenses to manufacturing concerns and operators in the Aviation industry to import diesel and aviation fuel directly to avert the avoidable monumental paralysis of manufacturing activities arising from total shut down of production operations and movement of persons for business activities;
    • As a matter of urgency, address the  challenge of repeated collapse of the national grid (twice within a week), which is causing acute electricity shortage in the country, especially for manufacturers;
    • urgently allow manufacturers and independent petroleum products marketing companies to also import AGO from the Republic of Niger and Chad by immediately opening up border posts in that axis in order to cushion the effect of the supply gap driven high cost of AGO;
    • Remove VAT on AGO as instant stimulus for an immediate reduction in price and expedite action in reactivating or privatizing the petroleum products refineries in the country;
    • Restrict the export of maize, cassava, wheat, food related products and other manufacturing inputs available in the country; and
    • grant concessional forex allocation at the official rate to manufacturers for importing productive inputs that are not locally available.
  • Feature: No Presidential Aspirant has mentioned the Country’s Power Crisis

    Feature: No Presidential Aspirant has mentioned the Country’s Power Crisis

    by Ayo Akinfe

    I find it totally unacceptable that none of the presidential candidates has uttered one word about addressing the country’s power crisis

    [1] Elections are due in February and nobody has come up with a policy to address the thorny issue of power generation. It says a lot about the quality of our politics. It appears we actually believe that if we elect “good leaders” the problem will suddenly and miraculously go away

    [2] Nigeria currently has an embarrassing low installed power capacity of 7,000MW, which should shame all of us. Just to put it into context, these are comparable figures for other developing countries: South Africa – 51,000MW, Pakistan – 21,000MW, Indonesia- 55GW, Vietnam – 42GW, Egypt – 40GW. I can go on and on but the fact remains we are so far behind it is deeply embarrassing. It is naive to think that this can be resolved without doing something dramatic or revolutionary

    [3] Egypt opened the world’s three largest power plants recently with a combined 14,400MW capacity. These three stations are expected to supply 45m citizens and save the domestic budget about $1.3bn per year as the result of the subsequent reduction in fuel usage.

    [4] China is the largest solar provider in the world with an installed capacity of around 130GW. Solar and wind farms are just springing up everywhere in China now. In fact, connecting generated power to the national grid is now their biggest problem as the majority of that capacity has been added in areas that don’t need it

    [5] Known as curtailment, Nigeria also has this problem. Basically, curtailment is when you have stranded power that cannot be hooked up to the national grid. I believe that at least three companies went bust in Nigeria as a result of this

    [6] To resolve our problems we basically need a minister of power who is going to dedicate his or her life to this project. Someone prepared to have no life for four years and work on this matter 24/7. So far, Nuhu Ribadu and the late Professor Mrs. Dora Akunyili are the closest we have seen to this. Heads of parastatals who dedicated their lives to the cause

    [7] First of all, we need new construction regulations that make it mandatory to install solar panels on all new houses, schools, offices and buildings

    [8] We keep building bigger churches and mosques every day. Hmmmm. We need laws that prohibit the building of religious houses unless a solar or wind farm is built alongside it

    [9] Businesses must also be given tax relief if they build solar or wind farms. They must be encouraged to use the Atlantic coast to build massive farms. No new business or factory should be given a license unless it plans to generate at least 10MW of power

    [10] We then need a minister of state for distribution who will make transmission his or her life cause. Getting those distribution companies working is a totally new challenge. They need investment and equipment. This is no small challenge, ladies and gentlemen. Phew!

    Ayo is a London-based journalist who has worked as a magazine and newspaper editor for the last 31 years. He was the founding editor of Nigerian Watch, the UK-based paper for the Nigerian community in the UK.  

    He is the current president of Ondo Union UK, the chair of Uncelebrated Nigerian Awards UK and was the chairman of the Nigerian Centenary Awards UK organising committee. He was recently appointed as the Chairman of the Central Association of Nigerians in the UK

    He is also the author of two books on Nigeria. Fuelling the Delta Fires is an expose which reveals the depth of the challenges in the Niger Delta, while Black Ladder is a narrative about the life of a Nigerian immigrant in the UK. In addition, Ayo is a columnist for several publishing houses in both Nigeria and the UK.

    Ayo has a history degree from the University of Ibadan and he did his post-graduate studies in journalism at the University of Westminster.