The Labor Party presidential candidate, Peter Obi, has promised to give the country a strong national grid by the end of 2023.
This is in line with his campaign manifesto which was officially released on December 4. Peter Obi’s manifesto said that one of the party’s goals in the power sector is:
- “Achieving a renewed, upgraded, and stable national grid working with Siemens by the end of 2023.”
The process: In the manifesto, Peter Obi said he intends to build on the existing agreement of the Buhari administration with Siemens Energy under the presidential power initiative (PPI). According to the manifesto, Obi will successfully complete the $2.3b Nigeria-Siemens network improvement deal (technical upgrade and strengthening) to achieve 7,000 megawatts (MW) stable capacity by 2023, 11,000 megawatts by 2024, and 25,000 megawatts by 2025. .
According to the manifesto, OBI will focus on solving a number of current challenges in the entire power value chain (generation, transmission, distribution) as well as the use of natural gas and renewable energy to solve the problems of electricity in Nigeria. Some of the solutions provided include:
Transmission: The administration will retain top local and international financial advisors to transform the Transmission Company of Nigeria (TCN).
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- They will also improve the technical availability of the transmission network, and grid stability through bank performance contracts.
- TCN will be incentivized to take every/all step to prevent power grid collapse, while they will be compensated for grid stability and performance.
Generation: Obi will launch a solar power revolution across Nigeria, especially in the northern region, with a view to ensuring that all cities and industrial parks in the region have uninterrupted power by the end of 2024. This will be done through in the following steps:
- The immediate re-engagement of 14 Independent Power Producers (IPPs), which in 2016, initiated power purchase agreements (PPAs) worth $2.5 billion to build a total of 1,125 MW of installed solar capacity for delivery to the national grid.
- Removal of key structural barriers to achieving financial closure (mainly to do with Nigerian Bulk Electricity Trading’s bankability as counterparty).
- The negotiation of a win-win Power Purchase Agreement (PPA) with an excellent list of local and international investors, who have already demonstrated their capacity to finance these projects.
- Increase the capacity of some of the 14 plants to achieve 5,000MW of generation by expanding at least 10 of the projects, where the transmission capacity has been expanded or it has been proven that the local demand is sufficiently developed.
- Invite experienced local and international developers to sign new PPAs for 8,000MW of solar and wind plants, including offshore wind farms in Lagos, Warri, and Port-Harcourt coastal areas with mandatory latest commercial operation date in December 2025.
- Restructuring of the Niger Delta Power Holding Company, NDPHC to release its 4000MW generating capacity.
- Returning Gbarain, Ihovbor, Olorunsogo, Alaoji, Calabar, Sapele, Omoku, Alaoji, Omotosho II, Olorunsogo II, and Geregu II to the best state of capacity and performance
Natural gas power: Obi plans to fast track the Nigerian Gas Flare Commercialization Program (NGFCP) to secure the gas wasted through flaring. Other initiatives include:
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- Increasing the rate of gas use through a joint gas-to-power drive, strong enforcement of domestic gas supply obligations by oil and gas companies, and development of new gas infrastructure- to-power through fiscal incentives.
- Implementation of policies and measures to enable embedded power generation to access pipeline gas where available at input pricing equal to the current gas-to-power price plus transportation of $2.50 + 80 cents, or other cheaper price, as opposed to the current $7.00 – $8.00 per million standard cubic feet (mscf).
- Within 3 years, each of the southern states must develop and build embedded power plants with a capacity ranging from 5MW to 30MW up to a total of 300MW per state from local sources gas in and around the states.
- Natural gas power plants and mother stations will be built near gas lines and gas sources, to make gas inputs to embedded power plants as cheap as possible. , so that the electricity generated and fed into the networks of the local distribution company (DisCo) from them. available at current DisCo tariff.
Obi also plans to complete and commission the Mambilla hydroelectric power (HEP) project, which is planned to provide 3,050MW; the Kashimbila Dam project, planned to deliver 40MW; and the 40MW Dadinkowa HEP plant.
Distribution: Obi will work with the Nigerian Electricity Regulatory Commission (NERC) to provide stable, reliable, and adequate power to customers.
- Implement the removal of investors who do not demonstrate sufficient capacity to improve their network, reduce technical and commercial losses, improve service quality and customer satisfaction; and demonstrate sufficient capacity to continue operating their franchises satisfactorily, including investment in technology, human capacity, and customer offerings.
- Complete the National Mass Metering Program (NMMP) and require DisCos to replace all damaged and obsolete meters under the NMMP in strict compliance with the Metering Code and other existing regulations by the end of 2023.
- Support DisCos with distribution and transmission bottlenecks by the end of 2023, to cut technical and commercial losses in a single figure across the Nigerian Electricity Supply Industry (NESI).
Off-grid power: Obi plans to work with the Rural Electrification Agency (REA), through collaboration with the private sector and international development finance institutions (DFIs) to develop 100,000 mini-grids across the country by the end of 2024, which will provide a reliable supply of electricity to 750,000 rural small and medium enterprises (SMEs).
- The collaboration will provide uninterrupted power supply to all federal universities and teaching universities in hospitals; support the private sector to deploy 15 million solar standalone systems for residential and SMEs use by the end of 2025.
Nuclear power: According to the manifesto, Nigeria, with technical support and support from China, has been working on its nuclear energy project at the Ahmadu Bello University in Kaduna since the mid-1990s. The location opened in 2004, and is home to about 170 Nigerian workers, and operates its second reactor.
- Obi will support the ongoing efforts of the Nigerian Nuclear Regulatory Agency (NNRA) to secure build, own, operate, and transfer (BOOT) contracts for leading international nuclear companies to build nuclear power plants to generate 4,000 MW of electricity on acceptable PPA terms over 40 years.
Funding process: According to the manifesto, the financing plan for the reform of the electricity sector includes the following:
- Project finance and exports
- Trade finance advisory and insurance
- Development and multilateral institutions of long-term debt facilities and export credit insurance.
- Also, private sector participants are expected and encouraged to provide equity, expertise, governance, warranty, bonds, and other appropriate financial and performance guarantees as a condition of participation in the sector.
For the record: In summary, Peter Obi’s manifesto states that the reform of the power sector of the administration will lead to the following objectives:
- Provide 5,000 direct jobs and 100,000 indirect jobs in the Nigeria Electricity Supply Industry (NESI).
- Reforming and restructuring the Nigeria Electricity Supply Industry (NESI) to provide adequate, accessible, reliable, and affordable power for Nigerians
- Release financing of new power generation to 25 GW by 2030, including an additional 5,000 MW of new power generation by the end of 2024
- Achieve a renewed, upgraded, and stable national grid working with Siemens by the end of 2023
- Ensure financially sound, competent and customer service oriented DisCos
- Support local capacity to produce electricity technologies
- Encouragement and expansion of local Research and Development (R&D) in universities, training centers, and workshops