THE NIGERIAN ELECTRIFICATION ROADMAP- THE DEAL WITH SIEMENS

The Federal Government (FG) of Nigeria, in a Government-to-Government deal, recently entered into a pact with the German Government, asking industry giants, Siemens, to implement the power sector roadmap towards providing incremental, stable and uninterrupted power supply to consumers while increasing investor confidence in the Nigerian Electricity Supply Industry (NESI). The news of the deal elicited mixed reactions from stakeholders especially because the actual details of the deal remained sketchy, only known to the President and some members of his kitchen cabinet who are non-experts of power systems.

Also, because the NESI is largely privatized, with generation and distribution segments of the electricity value chain in the hands of private investors, it is obvious that this kind of deal will impact on existing technical, commercial and legal frameworks.

Although the total installed generation capacity in the power sector is about 13GW, only 7GW of operational capacity is available for transmission and worse still, available power to consumers connected to the national grid hovers around 3.5GW due to a number of constraints including lack of gas supply, illiquidity, and high levels of Aggregate Technical, Commercial, and Collection (ATC&C) losses on the power network to mention but a few. Thus, there is an urgent need, not only to ensure the total available operating capacity of 7GW is made available to consumers in the short term, but also, that the total installed capacity of 13GW reaches end users in the medium term. For this to take place, significant investment and network reinforcement works are required.

The deal with Siemens will be executed in three phases. Phase 1 involves projects that will ensure 7GW of electricity can be supplied to consumers within two years of signing the contract. This will be achieved by reinforcing the weak transmission and distribution networks in a manner that unlocks 7GW of operating capacity throughout the electricity value chain and made available to consumers. Phase 2 of this agreement aims to carry out further network improvement activities to realize up to 11GW of distributed power to consumers aside from a project to install 40MW of Combined Cycle Gas Turbine (CCGT) embedded generation in Abuja. Phase 3 hopes to achieve an increase in generation capacity from 11GW to 25GW through large scale power generation projects in Abuja, Kaduna, Kano and Lagos.

With the plethora of loans and investment programmes in the power sector, it is important to ensure due diligence, project management, and synergy of purpose to avoid duplication of project scope or the implementation of white elephant projects. Thus, it is expedient to review the details of the proposed contract between Siemens and the FG.

A 3-PHASE POWER SYSTEM UPGRADE

NETWORK INFRASTRUCTURE UPGRADE

The immediate requirements of the NESI are network investment and the metering of all consumers of electricity. As such, in phase 1 of the deal, Siemens is expected to carry out targeted upgrade of distribution and transmission network assets as turn-key EPC (Engineer, Procure, and Commission) contracts. In addition, grid automation, protection and control will be a key feature in this phase, especially at the transmission level.

NATIONAL METERING INFRASTRUCTURE

To assist with transparency and security of cash flow within the NESI, Siemens will facilitate a National Metering Infrastructure which aims to use a technology driven solution (software, hardware, services etc) for centralized multi-tenanted system which links Meter Asset Providers (MAPs), and other key stakeholders who require visibility of customer payments and data in the NESI.

POWER SYSTEM STUDIES

An important aspect of the deal is the introduction of the need to carry out power systems studies while determining network gaps on which load and non-load related investment in the NESI will be based. In this deal, Siemens will provide Power System Simulation for the NESI which aims to provide tools for network modelling, analysis, planning and optimization so that network rehabilitation and expansion projects will be based on actual power system studies rather than on non-scientific and hap-hazard approaches. This will enhance asset management and total cost of ownership.

The objective of Phase 2 of this deal is to increase the available capacity to consumers from 7GW to be realized in phase 1 to 11GW. To achieve this objective, a degree of automation will be introduced at distribution voltages in addition to further network investments based on enhanced simulation of the power system. To secure the availability of gas to 40MW embedded generation in Abuja, the deal provides for a dedicated gas processing facility.

In the third and final phase, grid capacity is expected to leapfrog from 11GW to 25GW by investing in four (4) large power projects in Abuja, Kaduna, Kano, and Lagos while focusing on transmission and distribution network upgrades based on demand forecast and network studies. Independent Power Producers (IPPs) are also required to close the capacity gap to 25GW.

Idowu Oyebanjo is a UK Chartered Power System Professional

NB: 1GW=1000MW