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Issues around energy demands in Nigeria, others

Energy demands in Nigeria and other African countries and the need to address the challenge have continued to attract the attention of prominent stakeholders in the oil and gas industry. SUCCESS NWOGU writes

 

Energy demand in Nigeria The Association of Nigerian Electricity Distributors (ANED) recently estimated that Nigeria needed 30,000 megawatts of electricity generation to meet its current demand of power.

 

ANED, which is the umbrella body of electricity distribution companies (DisCos) noted that Nigeria with a population of more than 200 million people was currently generating less than 5,000MW, which is grossly inadequate to ensure adequate power supply for the nation.

Mr. Sunday Oduntan, who is the Executive Director, Research and Advocacy of ANED, also lamented that since 1960, Nigeria had not generated up to 6,000 megawatts of electricity, therefore, created a huge gap in the energy service delivery. Statistics indicate that there are 32 million households in Nigeria.

 

This reveals that if Nigeria can generate 30,000MW today, there will be 24 hours of electricity in Nigeria, according to Oduntan, who also remarked that South Africa has a population of 67 million people and is generating 46,000MW which, according to him, is more than enough for her.

He disclosed these during his recent presentation at a one-day workshop on, “Building Consumer Awareness and Strengthening the Customer Service Capacity Of Electricity Distribution Companies” in Lagos. He said that the 28 power generation companies in Nigeria, consisting of three hydro-powered stations and 25 thermal stations, collectively generate an average of about 4,000 megawatts and operate below capacity.

The thermal (gas-powered plants), he lamented, were faced with challenges such as gas constraints and inadequate capacity utilization to the detriment of the country. “Even the power being generated cannot be effectively transmitted due to reliance on a single grid system.

“We have a National Grid still owned by the Federal Government against what was agreed on during the power sector privatization process,” Oduntana lamented. Energy challenges in Africa IEA, Africa Energy Outlook 2022 stated that currently, about 600 million people in Africa do not have access to electricity.

It stated that despite progress in several countries (e.g. Kenya, Ethiopia, Ghana, Senegal, Rwanda), current and planned efforts to provide access to modern energy services barely outpace population growth, adding that there is a critical task for policymakers to address the persistent lack of access to electricity.

It, however, opined that the momentum behind today’s policy and investment plans is not yet enough to meet the energy needs of Africa’s population in full. It said: “At present, 600 million people, or 43% of the total population, lack access to electricity, most of them in sub-Saharan Africa. Countries such as Ghana, Kenya, and Rwanda are on track for full access by 2030, offering success stories other countries can follow.

“Our detailed analysis shows that extending national grids is the least costly and most prudent option for almost 45 per cent of those gaining access to 2030. In rural areas, where over 80 per cent of the electricitydeprived live, mini-grids and standalone systems, mostly solar-based, are the most viable solutions. “Demand for energy services in Africa is set to grow rapidly; maintaining affordability remains an urgent priority.

Africa has the world’s lowest levels of per capita use of modern energy. As its population and incomes grow, the demand for modern energy expands by a third between 2020 and 2030 in the SAS. “However, under existing subsidy schemes, current price spikes risk doubling energy subsidy burdens in African countries in 2022 – an untenable outcome for many facing debt distress.

Some countries, including Egypt, Ethiopia, and Uganda, are being driven to halt or reduce subsidies, or reinstate fuel taxes due to growing financial burdens. “International support must play a role in the near term to manage prices, but better targeting of subsidies to the households most in need is essential. “Efficiency helps temper demand growth, reduces fuel imports, strain on existing infrastructure, and keeps consumer bills affordable.

 

Energy and material efficiency reduce electricity demand by 230 terawatthours in 2030 – 30 per cent of electricity demand today. Building codes and energy performance standards, which restrict the sale of the least efficient appliances and lighting, make up 60% of these savings.”

NNPC’s assessment

The Group Chief Executive Officer (GCEO) of the Nigerian National Petroleum Company Limited (NNPC), Mallam Mele Kyari, projected that energy demand in    Nigeria and other African countries would increase by between 30 to 35 percent in the next 20 years.

Speaking at the seventh edition of the sub-Saharan Africa International Petroleum Exhibition and Conference (SAIPEC), Kyari, who was represented by the Executive Vice President, Upstream, NNPC, Mr. Adokiye Tombomieye, said Nigeria needed to capitalise on the advancements made in the industry to meet its energy demand, being geographically situated in the sub-African region and as a leader in the oil and gas industry in sub-Saharan Africa.

According to him, Nigeria is also required to guarantee energy supply, expand its economies and overall, build a sustainable future for millions of people beyond its shores. He advocated for strong collaboration amongst oil and gas countries in the continent in order to share knowledge and help each other in critical areas, including technology, exploration and production, research and development, technical expertise, and human capacity development to spread wealth within the continent.

According to him, the projected increase in the continent’s energy demand would in turn support the projected increase in Africa’s population and industrialidation. Kyari said: “The need for partnership was reinforced as more African countries continue to make hydrocarbon discoveries.

“We should collaborate and share knowledge and help each other in critical areas, including technology, exploration and production, research and development, technical expertise, and human capacity development to spread the wealth within the continent.

“This would in no small measure assist in achieving energy independence and also aid the transition to cleaner energy sources such as gas to sustain the region.

“This presents an enormous opportunity for us to form partnerships across the continent and build a sustainable future, Kyari stated: “Ironically, our restructuring is happening at a time when the Energy transition discussion is gaining momentum, and major fund providers for petroleum upstream investment are now activists and anti-fossil fuel.

 

“Decreasing investments in hydrocarbon ventures cannot guarantee global energy security in the near  future.

“Rather, an inclusive policy that guarantees access to finance and low-carbon technologies are key to sustaining global energy security and equitable growth.” Chairman of PETAN, Mr. Nicolas Odinuwe, said energy was core to the economies of 55 member states that constitute Africa, adding that it was imperative to harness and sustain the continent’s energy market.

He said there is a need for Africa to have a local content business e-platform, a one-stop collation of available opportunities, capacities, and capabilities within the dub-Sahara. He said the e-platform was currently being developed by the local content associations and will be launched by the third quarter of 2023.

 

“It is an integrated one-skill passport for welding and related practices with TWF, African local content funding (coordinated by NCDMB), Odinuwe stated. With the African Continental Free Trade Area Agreement (AFCFTA), Odinuwe urged the African Union to consider a unified or integrated African certification and standard as practiced in America, European Union, Britain, and others.

NCDMB

The Executive Secretary of the Nigerian Content Development and Monitoring Board (NCDMB), Mr. Simbi Wabote, said Africa’s energy sector has its inherent challenges just like any other region.

He called for collaboration of all stakeholders and African countries and advised them to focus on research and development, with the intention of taking a critical look at the challenges and coming up with economical home-grown solutions that would address those challenges in a sustainable manner.

He stated that such solutions could even be exported to other parts of the world, adding that such collaborative strategies were underpinned by the fact that the continent of Africa was blessed with enormous human and natural resources, which together make the continent a preferred destination for investors.

He said the Dangote Integrated Refinery and Petrochemical Company, with an installed capacity of 650,000 barrels per day (bpd) which was expected to come on stream within the year, would afford Nigeria and other African countries the partnership opportunities for sourcing petroleum products and fertilizer.

Last line

Wabote said: “The African continent currently holds seven percent and 13 per cent of the world’s proven crude oil and gas reserves, respectively, which underscores the fact that Africa stands to play a major role as the world seeks energy security and stability.

 

“With crude oil reserves exceeding 125 billion barrels and gas reserves of more than 500 trillion cubic feet, there is still a lot of refining potential that remains untapped as the combined crude oil refining capacity in Africa is currently about 1.7 million barrels/day for a continent that requires refining capacity of at least 10 million barrels/day.”

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