HERIOT-WATT UNIVERSITY

SCHOOL OF ENGINEERING AND PHYSICAL SCIENCES

MSC IN ENERGY / RENEWABLE ENERGY ENGINEERING

PROJECT PORTFOLIO

Title: EVALUATION OF EMBEDDED POWER GENERATION IN NIGERIA

Author: OLUWOLE ABDUL-JELIL ADEBANJI

Registration Number: 091607267

Date: 15TH AUGUST, 2011.

Supervisor: Dr. MOUNIF ABDALLAH

DECLARATION OF AUTHORSHIP
I, Oluwole Abdul-jelil Adebanji (091607267) confirm that the Project Proposal entitled
EVALUATION OF EMBEDDED POWER GENERATION IN NIGERIA is part of my assessment
for the Critical Analysis and Research Preparation Module
I declare that the report is my own work. I have not copied other material verbatim except
in explicit quotes, and I have identified the sources of the material clearly.

(Signature)

(Place and Date)

ACKNOWLEDGEMENT

I give glory to GOD almighty for good health and wisdom since the start of my
academic year till date, my profound gratitude also goes to my teachers and lecturers
within and outside my study department for their enormous support. Also I will like to
give honour to Mr. Kamal Habib and Mr. Olubunmi Obajuluwa for the necessary documents
and references, Miss Nonye for her relentless support, Miss Rukayat Balogun and Miss
Tosin Nurudeen who both showed me love, Miss Tosin Onabanjo for her numerous
corrections, Mr. Dipo Adewale (Dr. zaga) for topic analysis, Mr. kamaldeen Oluwole for
finances and support, Mr. Abubakre Bakare my reference coordinator, Dr. Mounif
Abdallah, for supervising this project and guiding me through, and others to whom I have
not acknowledged in here, I appreciate your prints in my life and wish you the very best in
your endeavour.
My final and utmost gratitude goes to my parents, Chief Mr. and Mrs. Oluwole, to
whom God have given the privilege to mould me up to this moment and care fore me. I
really appreciate you both and Im no one without you. Thanks and God bless.

TABLES OF CONTENT
CHAPTER 1
1.

Introduction

1.1.

Background

1.2.

Energy Resources in Nigeria

1.3.

Literature Review

1.4.

Aims and Objective

13

1.5.

Overview of Dissertation

14

CHAPTER 2
2.

Embedded Generation

15

2.1.

Current Available Technologies in Nigeria

17

2.2.

Recent Advancement, Research and Development

19

CHAPTER 3
3.

Problems of Electricity in Nigeria

22

3.1.

Generation-Supply Incapacity

22

3.2.

National Policy

31

3.3.

Management and Corruption Issues

32

3.4.

Inaccurate Data

33

CHAPTER 4
4.

Economic Analysis of Embedded Power Generation (EPG).

34

4.1.

Emission

34

4.2.

Cost of Technology

38

4.3.

Technical and non-technical loses

42

4.4.

Distribution and Adequacy

46

4.5.

Efficiency (sustainability)

48

4.6.

Environmental Impact

48

CHAPTER 5
5.

Making it Happen

51

5.1.

Funding

51

5.2.

Planning and Operation

53

5.3.

Regulatory policies for EG

56

CHAPTER 6
6.

Conclusion

59

6.1.

Contribution to the Knowledge

60

6.2.

Limitation to the Study

60

6.3.

Future work

61

Appendix

62

References

69

LIST OF FIGURES

Figure 1: The graphical representation of investment years in the electricity industry

Figure 2: Electricity generation in Nigeria from 1970 2005
Figure 3: Transmission and Distribution in Nigeria
Figure 4: Electricity consumption in Nigeria by sectors
Figure 5: Relationship of generation, transmission, distribution, and consumption pattern
in Nigeria
Figure 6: Costing per MWh of electricity produced from different plant types ($/MWh)
Figure 7: Cost per kWh (Nigerian naira)
Figure 8: Comparison Revenue Sales between Both Concepts-CP and EG
Figure 9: Relationship between functional economic parameters

LIST OF TABLES

Table 1: Analysis of the Potential Energy Resources in Nigeria

Table 2: Existing power generation capacity in Nigeria
Table 3: Emission conversion
Table 4: Cost comparison between CSP and EPG
Table 5: Technology costing per kWh
Table 6: Effect of transmission and distribution loses with projection plan (central stations)
Table 7: Effect of transmission and distribution loses with projection plan (Embedded
Generation)
Table 8: Comparison Revenue Sales between Both Concepts; CPS and EPG
Table 9: Potential impacts for CPS and EPG

DEFINATION OF TERMS

CP

Central Plant

CPS

Central Power Station

DOE

Department of Energy

ECN

Energy Commission of Nigeria

EG

Embedded generation

EPG

Embedded Power Generation

FCT

Federal Capital Territory

IAEA

International Atomic Energy Agency

IPP

Independent Power Producers

NARUC (US)

National Association of Regulatory Utility Commission

NERC

National Electricity Regulatory Commission

NEPA

National Electric Power Authority

PHCN

Power Holding Company of Nigeria

RT

Renewable technology

WEM

Wholesale Electricity Market

ABSTRACT
Electricity Issues have become the headline problem affecting growth within the Nigerian
economy over the last two decades. This has resulted in changes citizenry believes on the
ability of the government to provide adequate supply of electricity resulting in the nations
Self-power generation alternative. This dissertation focuses on concept that could enhance
adequate supply considering the proposed plan from the Nigerian Electricity Regulatory
Commission (NERC).
In particular, I analyzed the gap that exist between the present generation capacity to its
present and future demands based on the population growth and explained the potential
shortcomings in the electricity industry. I evaluate the present concept of Central Power
Station (CPS) to promote an efficient and effective electricity generation and supply to the
populace with reference to economic costing and environmental consideration.
I explored the different potentials available for electricity generation within the country
and established the need for policy changes to encourage sustainability of energy
consumption and utilization. I find that, Embedded Power Generation (EPG) could be a
practical solution to the problem of electricity shortages and the integration of different
energy sources into electricity generation with respect to population distribution in the
rural and sub-urban areas in Nigeria.
More broadly, this dissertation highlights the impact of the present policies of the country
in displacing other energy sources and concentrating on conventional sources-gas for
electricity generation. Because emission profile has not been considered limited for energy
consumption in Africa, many present practices and projects throughout the region are
implemented on the basis of need and not of environmental concern. Likewise, if an
economic data management board is established with a goal of making every Nigerian
count, the problem of projection and forecast on future needs and analysis will gradually
become history.

1. Introduction
Life is known to have a correlation between its energy availability and consumption. The
pressure on the available energy resources due to an increase in population of the world
over the years has resulted into a global issue across all sectors which is seemingly
dependant on energy. This effect is universal and the cumulative effect brought about by
the trending Global warming.
Nigeria is a country blessed with abundant energy resources with a large proven reserve of
oil, gas and other renewable energy resources which can make the country have excess
power production, but the growth of the industry still pose a problem to the decision
makers an the populace. The energy sector which is the life of every economy contributes
about 80% of the total income of the country mainly oil revenue. This industry also account
for the water and air pollution-a threat in various parts of the country.
The nation accommodates over 150 million people with an average demand of 20,000MW,
however its supply is below 4000MWe thus, a per-capita consumption 128KWh/capita of
electricity

[1].

The country is experiencing power poverty as, over 70% of the nation lacks

constant electricity supply; this accounts for the rural and rural-urban populace. This has
lead to a drag in the development of different sectors cutting across, Agriculture, Education,
Technology, Health, Economics and Management, and also an indirect impact on the
unemployment rate of the country. Over 60 million Nigerians now uses generators to
generate electricity which increases the demand for conventional oil and irrefutably
enhance global warming.
Environmental crises resulting from of increasing demand for conventional fuel that
cumulatively have cumulatively lead to increased awareness of global warming and recent
trends of sustainable power generation. This work focuses on the ways of mitigating the
excessive use of conventional fuel for power generation and increasing the adequacy of
electricity through sustainable means in generation, transmission, distribution and
consumption.

10

In view of this, the available resources in Nigeria will be presented to analyze the sources of
the Nigerias problem as well as the parameters which have not been considered in enabling
a developmental solution in the power sector.
1.1. Background
Nigeria is a country with over 150 million people with the majority of the populace in the
rural area. It covers a geographical area of 356,667 sq. miles with 98.6% of it being land (2).
From the Federal Government statistics, the nation is divided into 36 states, a Federal
capital territory (FCT) and six geo-political zones which leave Nigeria governance and
management issue in a complex situation. Just as power is important to the global
economy, electricity plays important role in Nigeria throughout the life and activities of its
people, with growing and important technological developments. Electricity was first
generated in Lagos, Nigeria dating far back to 1896, 15 years after it was introduced in
England. Since then, there have been series of legislative changes to the control and
management of electricity production and distribution in Nigeria (3),
Recently the economy of Nigeria has witnessed several drawbacks due to the epileptic
power supply in the country despite the abundance of energy resources. Electricity
production has been abundant in the country until the early 1980s when the power sector
experienced isolation with little or no infrastructural development, as well as lack of
maintenance. The growing population also is of great concern as this elevated the pressure
of the supply-demand structure that is recently experienced. In 2001, the installed capacity
of the nation drop to an unbearable 1,750MW from an initial installed capacity 5,600MW
with only 24% of the generating unit operating, as compared to its 6,000MW load demand
(4).

11

1.2. Energy Resources in Nigeria

Nigeria is the heart of Africa when it comes to energy resources, and its reserve, together
with Libya accounts for two-third of Africas crude oil reserve. It also has a huge gas
reserve and ranks second to Algeria

(4).

It has the greatest percentage of Africas bitumen

and lignite reserve and this make her unmatchable with other countries in the nation as
regards conventional energy sources. Below is a subjection of various resources and their
measures in the country.
1.2.1. Natural Gas
In 2005, Nigerias proven natural gas reserves assessed at about 187.44 trillion standard
cubic feet, which is larger than its oil resources in terms of energy. The discovery of gas was
as incidental as the discovery of oil in Nigeria and almost 75% of the gas produced was
being spread throughout the country after its discovery. Nevertheless, the spreading was
reduced to about 36% due to the harsh efforts made by the government to monetize
natural gas. In the domestic sector, 80% of the energy source is gotten from natural gas
which is mainly for power generation while the remaining 20% is used in the industrial
sector. The probable lifespan of Nigerian crude oil is about 44 years, looking at the current
reserves, misuse and, production capacity which is at 2million b/d productions. However,
for natural gas is about 88 years based on the 2005 production rate of 5.84bscf/day (5).

1.2.2. Oil
In recent years, the advent of oil in Nigeria has been given the upper hand to any other
source of energy, thus leading to its intense growth in the country. In 1999, Nigeria had a
verified reserve of 25 billion barrels of mostly low sulphur light crude, which considerably
increased to 34 billion barrels in 2004 and presently about 36.5 billion barrels

(5).

The

exploration of the reserves is a result of the aid of Joint Venture operations, an alternative
funding scheme, new production sharing plan and the opening of new frontier and
deepwater offshore blocks. Due to different oil potentials that have been detected, it is

12

forecasted that, reserves will reach about 68 billion barrels by year 2030. Although oil
production has increased gradually in Nigeria in recent years, this however depends on the
economics and geopolitics in other producing and consuming countries. The average daily
production of crude in Nigeria is 4million barrels per day and it is forecasted to increase to
5million barrels per day in year 2030. Nigeria has four refineries in the downstream oil
sub-sector with a size of 445,000 barrels per day and 5001 km network of pipeline from
the refineries to 22 oil depots (4).
1.2.3. Coal
This was first discovered in Nigeria in 1909 and mining began in 1916 with a recorded
output of 24,500 tons. Production rose to a peak of 905,000 tons in 1958/59 with a
contribution of over 70% to commercial energy consumption in the country. Available data
shows that, graded sub-bituminous coal occurs in about 22 coal fields around the old 13
States of the Federation. The proven reserves in the country are about 639 million tonnes
while the inferred reserves are about 2.74 billion tonnes. The consumption has dropped
drastically with the discovery of crude oil in 1958 and the general conversion of
mechanical engines to use oil. This dropped production to only 52,700 tonnes in 1983 and
contributed about 0.02% to commercial energy consumption in the country in 2001.
1.2.4. Hydropower
Hydropower structure depends on the different energy levels of water in a dam, lake or
reservoir and their discharged tail water level downstream.

Presently, the usage of

hydropower in the country is 29% of the total electrical power supply. The first major
hydropower supply station in the country which is situated at Kanji, Niger with capacity of
836MW. There are efforts to expand this to 1156MW. There is another hydropower station
at Jebba, on the Niger with an installed capacity of 540MW. An evaluation for rivers Benue,
Cross River (at Shiroro, Makurdi and Ikom), and Kaduna indicates their total size to be
about 4,650MW. The estimated hydropower resource that is potentially available for use in
Nigeria is 11,000MW. Small hydropower systems can be built in all the parts of the country.
This will enable the potential energy in the large network of rivers to be utilized and used

13

for electrical energy, which will help disperse energy to several parts of the rural
community.
1.2.5. Solar Radiation
Solar radiation is the radiant energy that is radiated from the sun from a nuclear fusion
reaction that creates electromagnetic energy. The amount of solar radiation in a specific
place is related to the solar energy potentials. Solar energy is the most promising of the
renewable energy sources if we look at its unlimited radiation of energy. The energy the
sun radiates is about 3.8 x 1023 kW per second. Research has shown that solar energy
resource in Nigeria is fully available for use. Nigeria receives 5.08 x 1012 kWh of energy per
day from the sun. This amount of electrical energy is equivalent to 4.66 million barrels of
oil per day (4).
1.2.6. Wind
Wind is associated with the movement of air masses caused primarily by the differential
solar heating of the earths surface. This could be harnessed with a wind turbine. Wind
energy has been used for centuries for domestic purposes such as water pumping, milling
and grinding of grains. A study carried out on wind energy in some states in Nigeria shows
that the annual wind speed ranges from 2.32 m/s to 3.89 m/s

(6).

Consequently, efforts

have been directed greatly towards the use of wind power for the generation of electricity.
Fast changes in technology has occurred and major wind powered generating plants have
been installed in many places for easier access of generating electricity.
1.2.7. Biomass
Biomass is the energy of biological systems generated from wood and wastes. Biomass
energy is an indirect form of solar energy due to its generation through photosynthesis.
The biomasses in Nigeria are wood biomass, residues and waste (forestry, agriculture,
municipal and industrial), forage grasses and shrubs, and aquatic biomass. Nigeria is using
80 million cubic meters (43.4 x 109 kg) of fuel wood yearly for cooking and other domestic
uses (7).

14

The potentials of energy resources in Nigeria are summarized in Table 1 below which
shows the various resources, its reserve and its utilization.
Table 1: Analysis of the Potential Energy Resources in Nigeria (8)
S/

Resource Type

No

Reserve

Production

Utilization

(Natural Units)

Level

(Natural Units)

(Natural
Units)
1
2

Crude Oil
Natural Gas

36.22

billion 2.06

million 445,000

barrels

barrels/day

187 trillion SCF

7.1

barrels/day

billion 3.4 billion SCF/day

SCF/day
3

Coal and lignite

2.734

billion insignificant

Insignificant

billion -

tones
4

Tar Sands

31
barrels

of

oil

equivalent
5

Large Hydropower

11,250 MW

1,938MW

167.4

Million

(167.4 Million MWh/day

MWh/day)
6

Small Hydropower

3,500 MW

30 MW (2.6 2.6
million

million

MWh/day

MWh/day)
7

Solar Radiation

3.5-7.0

Excess

of Excess

kWh/m2/day

240kWp

of million MWh/day

(485.1

0.01

million solar PV or of solar PV

MWh/day using 0.01

0.1%

of

million

Nigeria MWh/day

land area)
8

Wind

(2-4)m/s @ 10m -

15

height
9

Biomass

Fuel-wood

11million

0.110 million 0.120

hectares

of tonnes/day

forest

million

tonnes/day

and

woodland
Animal

245

million 0.781 million -

waste

assorted in 2001

tonnes

of

waste/day in
2001
Energy

72

million Excess

Drops and hectares

of -

of 0.256 million

Agric

Agric. land and tonnes

Residue

all waste lands

of

assorted
crops
residues/day
in 1996

10

Nuclear Element

Not

yet

quantified

Table 1 shows that, resources remain abundant in Nigeria but the lack of strategies,
techniques and investment to harness and utilize these resources coupled with the right
institutional policies for a lawful and environmental production has invariably caused it to
remain in its poor economic and infrastructural state. This remains evident in the power
sector and all other sectors of the nation.
Electricity supply in Nigeria has been stable until the mid 90s however, due to lack of
monitoring, maintenance, planning and investment in the power sector for more than two
decades despite the increasing demand capacity for energy, electricity in the nation and
other resources as a product of population growth vis-a-vis its need for technological
advancement.

16

The figure below shows the period of isolation in the sector which cumulatively caused the
present problem of electricity drought. There have been drop in investment from 1980 till
1983 where little investment was made into the sector by increasing the capacity of the
hydroelectric plants which spanned another two years and then a fluctuation in investment
throughout the military reign until the democratic regime where investment consideration
were made and implemented in 2000.

Figure 1: The graphical representation of investment years in the electricity industry

(9)

There has been lots of research related to the power industry in Nigeria with the aim of
identifying the problems and proffering a solution. The effort by different people is
presented in the literature review section and their relevance to the present development is
summarized in relation to the need of this work.

17

1.3. Literature Review

Several studies have been carried out in the past as regards sustainability in electricity
generation. Dating far back as 1990, research in renewable energy in Nigeria has
determined the potential of renewable energy sources available in Nigeria. It is brought to
light that the most appraised research done in the area of renewable energy in Nigeria is
dated far back as 1990. In view of this and other subsequent research, the future still seem
bright and reliant on conventional fuel with its forecasted rigid oil policy. In 2000, there was
appraisal of different research around the world on renewable technology. Subsequently,
different observation and recommendation were made by different vendors as regards the
potentials of resources available and the ways to which they could be harnessed.
Ayodele [10] evaluated the electricity problems in Nigeria and concluded that there is lack of
maintenance and that the electricity potential of the country is a multiple of the present
demand which have still not been met. He further stressed that there should be better
strategies to manage the present capacity before additional implementation with regards to
the demand, He also recommended that there should be policy regulations to maintain a
sustainable process of energy transmission that account for an average loss of 40% and
admitted that the privatization program will enhance development of the sector but there
should be greater chances given to indigenous investors. His publication was appraised both
home and abroad, the power sector has been privatized and several deregulation has been
done to enhance private generation of electricity for commercial purposes but the
management problem still persist.
Sambo (11) evaluated alternative energy generation and concluded that there has been lack
of finances to fast track the development, there is also lack of adequate expertise and even
the available ones are not empowered as expertise are mostly sourced from abroad. Others
include lack of awareness of renewable technologies, intermittency of resources, thus
problems of energy storage and system management in periods of no resources added to
the complexity of the problem. He recommended that, there should be deregulation and
liberalization of the energy sector so as to give room for appropriate tariffs which will boost
the competitiveness of the technology, intensify Research and Development (R&D) in

18

Renewable technology (RT) so as to reduce cost, enhance development and sustenance of a

renewable energy database, and also encourage huge investment in renewable sources from
the revenue of fossil resources. He has made a lot of contribution to the development of RT
in recent times which lead to the establishment of Nigerian Energy Commission, and his
research have been appraised in the power sectors, where some have been implemented
and other are awaiting approval, majorly RT due to the lack of favorable energy policy.
He also assessed the roles of energy in millennium development goals and concluded that
(12),

there is inability to pay for tariffs due to economic poverty, inability of private sector

contribution due to unfriendly policies, unfriendly community relation which incorporates

grievances in the public and debar implementation of developmental process. He
recommended there should be privatization of the energy sector to fund and strengthen it,
imploring diversified sources for energy generation and intensified R&D into the problems
of energy generation and distribution.
National Stakeholders Forum on Rural Industrialization and Development through
Renewable Energy Technologies

[10]

had also researched the development through

renewable technologies and recommended that;

There should be an institutionalized energy policy
The total renewable energy potential of the country should be analyzed and identify
local conditional priorities to different ecological zones
There should be a standard testing laboratory for renewable technology to assure the
quality of products
There should be an integration to renewable energy by taking global partnerships to
aid funding and growth
There should be an establishment of renewable energy funding program like the one in
India, IREDA.
There should be a participatory approach from other successfully developed project,
coordinator from other parts of the world to enable the implementation, and public

19

awareness programs to facilitate support from financiers, decision makers and the
public.
Aliyu and Elegba

(13).

evaluated the prospect of hydropower development for rural

applications in Nigeria and concluded that Integrating into renewable energy has been a
problem due to; the technological incapability, high cost of infrastructure, financial
constrain, low level of public awareness, and a general absence of a comprehensive energy
policy. They also recommended that there should be an assessment to determine the total
potential of renewable energy in Nigeria, encourage private investors, and develop training
and testing centres for this purpose. Implementation of energy conservation modules
should be introduced into the educational curriculum. Their works is appraised and many
of their recommendation have been put into practice as renewable technology is now
getting public awareness after a long time buy yet to have recognition in the nations
supply.
Akinbami

[14.]

carried out a research on renewable energy resources and technology in

Nigeria; he concluded that the future energy supply projected using MARKAL would
provide a large scale linear optimization level as opposed to the non-linear future models
of renewable energy. He also said that, due to the scale of economy, large scale hydropower
will take the greatest share in commercial renewable technology under CO2 emission
mitigation. He also suggested that there should be intensive effort towards energy supply
system in the country to adequately and efficiently harness renewable resources to enable
economic growth and development. This research did a lot of help analyzing the possible
plan of an energy mix economy but it has not been implemented.
Ojosu and Salawu,

[6]

evaluated the potentials of windmill utilization according to end use

and concluded that there are good locations with great potentials for energy generation
through wind power. This was a very good study to wind potential, however limited to most
part of the country but till now, the applications have been insignificant in all parts of the
country.

20

Ojosu and Salawu, [7] carried out a research and estimated the wind energy density from a
wind turbine at a height of 25m in different locations across the country and proved the
potentials of generating electricity through wind energy as shown in appendix VI. They
concluded that wind energy will help to substantiate the electricity generation in the
country. There is however a limitation for large scale implementation to this model, as cost
analysis and return on investment where not included in the research.
Akinbami et al [15.] evaluated the waste produced in Nigeria daily with their potentials for
biogas production. They concluded that, with intensified urbanization and industrialization,
the municipal solid waste will continue to grow and this can substantiate a production of 6.8
million m3 of biogas from fresh animal waste daily. This work also provided an overview of
waste potential and energy generation from the waste but wasnt able to statistically show
the daily volume of waste generation at different regions and the biogas value of this waste.
SELF organization

[16]

researched the potentials of Photovoltaic (PV) for distance villages

and showed that, the cost of PV electrification is less than getting power from the national
grid due to the transmission distance to the villages from sub-stations. They further showed
that PV require less operational expenses if adequate training is given to monitoring
personnel. It can be the most reliable source of power due to; the huge expenses of running
power generator, the availability of fuel at distant locations and the fluctuating nature of
conventional fuel supply. They concluded that there should be assistance from multinational
firms, non-governmental organization and government in order to enable the same project
across other rural communities. This work is a tactical development to the demand of a
rural area and it has the motive of making better living standards for rural areas. This was
implemented and it worked perfectly. Works like this should be done across other parts of
the country to enhance a significant impact of solar technologies in the nation, this has been
able to accommodate the villagers basic needs but increase in electricity demands will be a
detriment on the capacity of the solar PV.
Sambo

[17]

evaluated the challenges for a sustainable energy production by using the

information sourced from International Energy Agency (IEA) to stipulate the need for a
significant change on the energy production and concluded that, there is high energy

21

wastage in the country. The community relation problem in Niger-delta is also a major
hindrance to development, the demand for power is growing while supply is reducing due
to inefficient/old power plant. He recommended that, there should be emulation of the
developed countries by having a national energy plan and energy laws to enhance socioeconomic development.
Jekayinfa and Scholz [18.] carried out an assessment on the potential availability of selected
residue from available energy crops for possible conversion into renewable energy as
shown in appendix VII. It concluded that about 58 million tonnes of residue were available
for use by 2004 which have the energy equivalent of 20.8 million tonnes of oil. They also
projected the residue availability for 2010 to 80 million tonnes and concluded that when
these residues are converted into usable energy, they could supplement fossil energy by
80%. Their work was streamlined to energy crops but until now, commercial
implementation has not been done to put the work into practice.
All the above lead to the initiation of this work to delineate the parameters for a sustainable
and effective electricity generation, correlate the inter-dependency of all this parameters,
identify all the necessary changes to facilitate growth in this sector and to cater for the
needs of the growing population with her industrial and technological needs and provide a
recommendation

1.4. Aims and Objective

The aim of this project is the provision of adequate electricity to enhance growth and
development across all sectors of the economy. The objective of this research is in view
with the pressure on the nations needs for uninterrupted cheap electricity supply to enable
the growth of industries, local businesses and a good development across all sectors.

Analyze the present generation of electricity and compare with the demand of the
nation

Analyze the various shortcomings of electricity poverty in Nigeria in all the phases;
generation, transmission, distribution-sales and consumption,

22

Analyze the costing required to invest in the acute power structure,

Discuss the ways of realizing a sustainable power generation scheme to enhance

adequate supply with the available technologies.

Discuss the needs of mixed generation and the enabling policies.

1.5. Overview of Dissertation

This chapter has been able to give an introduction and a purpose which necessitated this
research. Chapter 2 will introduce the proposed concept of Embedded Power generation
(EPG) and circumnavigate its operations. Chapter 3 will present the methodology used in
this project and the result of the methodology. Chapter 4 will present an economic analysis
of both conventional-Central Power Station and the EPG concept. Chapters 5 will discuss
the necessary actions to be taken to achieve realities in the proposed concept. Chapter 6
will round up the project with a conclusion and a recommendation.

23

2. EMBEDDED GENERATION
As earlier discussed, the increasing gap between supply and demand continues to pose a
threat to the life of the sector and a great challenge to Nigerians, as a whole. This threat has
increased the percentage of the population on self generation using petrol and diesel
generators, all of which are very expensive and very harmful to the environment.
Traditionally, electric systems have been built with the Central Station Concept due to its
economies of scale in power generation and cost consideration. The larger generators
produce electric energy at a fraction of the cost of running smaller generators; the bigger it
is, the greater the economics of power production. In recent years, for various reasons
encapsulated in the need for growth and developments, the traditional economic margins
between the large and small units have virtually reduced (19).
Embedded generation (EG) could also be termed as distributed generation which involves
electricity generation through different sources, i.e; gas, wind, biomass, oil, PV, small
hydropower, e.t.c. which is directly connected to medium voltage distribution in a more
decentralized supply pattern to the consumers rather than been on the transmission
network (grid). This generation makes it possible to incorporate smaller plants of
generation capacity below 50MW directly into the distribution network without connecting
to the grid.
EG, involves the use of small generators and storage power system, located on the utility
system to provide adequate electricity according to demand and specification. It is
constructed as stand-alone (isolated from the grid), and it is a recent development to help
tackle the problem of power distribution and ease of maintenance.
Chapter 1 has been able to analyze the potential of generating electricity through the
various resources available in the country but until now, gas has been the major source of
national generation. Historically, hydropower used to have the larger take on the supply
network but many of the plant have been reported ineffective and working below expected
capacity due to lack of maintenance.

24

EG could be used by state or local government to generate electricity for private or

commercial purpose, also by multinational companies and Independent Power Producers
for industrial applications and commercial purpose respectively due to its medium capacity.
This idea is urged by the need of adequate supply of electricity which technically appears
too large for the public sector to handle.
EG could be classified into two major topics according to its application;
Traditional (convention) power generation

Low head hydro

Combined cycle turbine

Combustion turbine

Diesel generators

Co-generation units

Renewable Energy power generation (future use)

Fuel cell

Hybrid system

Tidal power

Ocean gradient

Wind

Solar thermal

Biomass

Geothermal

Photovoltaics

The above classification has various relationships and differences which make them fit for
Nigerian scenario. Both conventional and non-conventional could be used for;

25

Standby or emergency power generation,

Independent Power Producers (IPP)

Hybrid systems,

Dispersed storage and generation,

Dispersed energy system, e.t.c.

2.1. Current Available Technologies in Nigeria

Commercial electricity in Nigeria has been generated using coal, hydro and gas respectively
according to their age. The electricity produced has been distributed unevenly amongst the
population and cities due to demands management and revenue consideration. For most of
the populace who lives in the rural area, the available source of energy to them is the
biomass and traditional lanterns. This reduces the chance for developments and enhances a
vitalized environment for spreading of diseases as health technology cant be positively
driven without electricity. The urban areas also lack adequate and quality electricity supply
which aided the paralysis of several businesses and increased the market value of various
commodities.
The existing technologies used for commercial deployment are summarized in the table 2
below.

26

Table 2: Existing power generation capacity in Nigeria (20)

S/

Power

location

station/ Plant
type

Year

of Installed

commissionin

capacity

(MW)

Installed

Units

units

available

Lagos station - Egbin

Thermal

1984, 1987

1320

Sapele
station @
Ogorode, Delta

Thermal

1978 , 1990

1020

10

Egbin AES, Lagos

Thermal

2003

170

Afam

Thermal

1975 , 1982

710

20

1978

60

(gas)
6

Ijora Station Lagos

Thermal
(gas)

Lagos IPP
(Enron/AES) Egbin

Thermal

2003

170

Oji

Thermal

1956

30

None

832

18

12

1976, 760

(coal)
9

Delta TV @ Ughelli

Thermal

1966, 1990

10

Kainji

Hydro

1968,
1978

11

Jebba

Hydro

1986

540

12

Shiroro

Hydro

1990

600

6212

94

54

TOTAL

From table 2; In 2004, there is a total of 94 installed units with 6212MW installed capacity,
68.9% thermal, 30.59% hydro and <1% coal (now abandoned due to age). However, due to
lack of maintenance and funding in the power sector, the working units have been reduced
to 54 units which are 57.5% of the actual installed units.

27

Recently the lack of adequate supply made the populace source for self generation. This has
been done with the help of power generators with capacity ranging between 2.5-500KVA.
These generators uses petrol or diesel as their fuel and are very inefficient, expensive and
highly emissive constituting noise and air pollution to the prevailing unclean environment.
A newspaper blog reported recently that, over 60million Nigerians now own a generator (21)
which makes the generator industry better than the television industry.
Renewable technologies are available but have not been commercially deployed; it is still in
the research stage. Some of the technologies have been proven but the future of renewable
in the country is bleak irrespective of its potential because the present energy policy doesnt
by anyway encourage or actually enforce sustainability.

2.2. Recent Advancement, Research and Development

With reference to the prevailing situation, the government has decided to rescue the almost
dead power sector which could lead to the paralysis of the economy by establishing a
mandate through the federal constitution Act No. 62 of 1979, as amended by Act No. 32 of
1988 and Act No. 19 of 1989, with the statutory mandate for the field of energy in all its
ramifications.
The established bodies in the process of deregulation include;

Energy Commission of Nigeria (ECN); mandated to carry out overall energy sector
planning and policy implementation, promote the diversification of the energy
resources through the development and optimal utilization of all, including the
introduction of new and alternative Energy resources like Solar, Wind, Biomass and
Nuclear Energy.

National Electricity Regulatory Commission (NERC); mandated to enable

uninterrupted electricity supply, fluidize private sector participation, ascertain
consumer protection and a general fair regulation.

28

Wholesale Electricity Market (WEM); creation of a competitive market for

distribution companies to source for electricity from any of the available generating
market.

Rural Electrification; unbundling agency to manage the rural electrification funds,

with the objective of expanding access to electricity in rural communities.

Independent Power Producers (IPP); facilitating private companies to enable power

production through their generating plants and enter into bilateral agreements with
preferred customers or distribution companies.

As a popular saying-what cant be measured cant be managed. This has further helped to
measure the energy demand and strategies of supply by collaborating with the
International Atomic Energy Agency (IAEA) for a 30years planning period. This measure
employed the IAEA modeling tool;

Model for the Analysis of Energy Demand (MAED)

Model for the Energy Supply Strategy Alternatives and their General Environmental
Impact (MESSAGE).

The result enhanced incorporating private companies into the power sector through the
privatization program to qualitatively supplement the capacity of the present generation
and supply of electricity that the country craves for. In regards to this, several groups,
companies, bodies, state government have attempted to implement project in the past to
reduce the problem of inadequacy but most of their impact havent been visible due to the
great gap between the present demand and supply. Also 98% of commissioned and
proposed projects have not been able to address sustainability, but their main goal is
adequate and reliable supply which is still a reality of decades ahead with regards to the
present pace of growth.
This dissertation aims at providing adequate and sustainable electricity supply through EG
in a decentralized pattern to be able to; harness energy potential of different sources at
different locations, reduce the losses during transmission, reduced cost of connection,
enhance greater market and competition, and opportunities for private and local/state

29

government participation. This will open the market for indigenous and foreign investors
to utilize its assets and benefit hugely from the relatively untapped market while the
populace will get adequate supply and lower tariffs from the competitive market, also
greater employment opportunity and the dream of industrialization can be brought alive.
The summary of the reason for the privatization acts are enlisted below;

Sustainability

Inadequacy and quality of supply

Wastage

Environmental impact

Poverty

Economic decline

Lack of accountability and good management

In view of the situation of the country, the potential problems will be discussed and then,
the subsequent chapters will economically analyze a preferred solution to the present
structure.

30

3. PROBLEMS OF ELECTRICITY IN NIGERIA

In an attempt to decipher the problems of electricity supply inadequacy in the nation,
interviews were carried out to research and ascertain the main problems in the industry
and how they affects the country across all sectors. The area of focus included
industrialization, electricity usage, economic growth, environment sustainability, and
barriers to development. After several telephone and one on one interview from
government representatives, private organization and various individuals across different
sectors, responses could be summarized as;
Generation-Supply incapacity
National policy
Management and corruption issues
Inaccurate data
The above enlisted problems have unarguable been seeking amendment through the cry of
the people but each point is deepened and cannot be tackled from the surface; there is need
for reforms in different departments, responsible for managing the above problems by
using different strategic tools.

3.1. Generation-Supply Incapacity

This was tackled by most government representative in a forum discussion. It was stressed
that the people are expecting the government to provide adequate electricity supply which
isnt disputed as the government responsibility. They said effort have been concentrated on
this in recent years, unfortunately the actions hasnt been evident due to sabotage of
government effort and the deepened network problems.
Their problem was analyzed subjectively in the various phases of generation-supply as
discussed below.

31

3.1.1. Generation
It was stated that, the total installed capacity of the current generating plants is 7876MW
including IPP generation but, the available capacity is less than 4000MW as at December
2009. There are fourteen generating stations and seven of them are old enough to be
overhauled which generate an average daily capacity of 2700MW which is far below the
initial peak load forecast of 8900MW for the existing infrastructure. This resulted to load
shedding as a solution to help distribute electricity to all parts of the country.
The problems are summarized below;

Insufficient funding of the station to aid maintenance.

Lack of adequate human power and experienced personnel to handle and operate
the stations.

Old equipment and facilities to enable efficient and effective generation.

Concentration on few sources of energy for electricity generation

Inadequate capacity

Sabotage of government efforts

The above listed points have been summarized from the analysis from government
representatives. It is clear that there is lack of funding in the power sector as the present
capacity of the nation is far below the present demand of the nation. This resulted to the
problem the nation is facing now.
Figure 2 shows the electricity generation in Nigeria putting into consideration the installed
capacity and the total generation.

32

Figure 2: Electricity generation in Nigeria from 1970 2005 (22)

Figure 2 shows the gap between the installed capacity and the total generation. This is as a
result of the old plants which are still in use. Most likely, greater amount of energy is used
to power the old generating plants and a given lower output than its installation state due
to drop in efficiency and lack of maintenance. Some professionals proved that efficiency of
these plants sometimes dropped by 60% depending on the state of the plant.
Mr. Mohammed of the Energy Commission of Nigeria (ECN) discussed at length on the
effort of the commission to put online some new generation plants with the
institutionalized IPP, to enable abundance and quality electricity. He also said that, the
problem at hand now encompasses all the phases of production to consumption and more
effort will be focused on the transmission, distribution and marketing of electricity to
create a conducive atmosphere for investors, ease discharge of their objectives, and enable
them recoup interest on investment. The summarized future generation capacity of Nigeria
is in appendix I.
Appendix I shows the proposed power generation plan for the adequate supply of
electricity. We can conclude that, the plan is just to supplement the present energy
generation capacity but the problem of sustainability has been postponed to the future

33

with reflections of present action. Hydro-generation takes a share of 19.84% of the

proposed generation plan and 80.16% goes to thermal. From the share potentials of energy
resources available in the country (table 1), we know gas is abundant in the country
likewise other resources, so this doesnt give gas an edge in utilization or to forego other
potential resources as this sums up to wastage of resources. Environmental concern and
laws has been gaining acceptance across developed nation but until now it hasnt been
trending in Nigeria. Knowing this, any project that involves the environment and has a life
extending into the future should put sustainability into consideration. Gas is accepted to be
partly clean for generating electricity in terms of its pollution level but its not as clean as
renewable energy thus there is room for mixed generation due to the energy resources
available in the country.

3.1.2. Transmission
Technically, the problem of transmission has only been identified by the people in the
engineering department who are exposed to core activities which involves installing
transmission lines. Transmission loses over long distances have been estimated to be
8.05% of the total electricity production compared to the 6-7% of the developed world. The
issues of transmission cannot be ignored as the proposed generating plant needs
transmission medium to effectively convey its power.
Mr. Olubunmi Obajuluwa of Power Holding Company of Nigeria (PHCN) expressed the need
of replacing the old transmission lines as the capacity and efficiency of transmission has
reduced over the years due to heating and overloading, and most likely quality materials
were not used at the time of construction, and there wasnt any monitoring agency to verify
that on behalf of the government. This increased loss of voltage during transmission. He
also stressed that government properties havent been secured enough because, there have
been reported cases of destruction and theft of public infrastructures in new sites before
decommissioning.

34

Another Engr. Abdul of Energy Commission of Nigeria said the transmission system doesnt
cover all part of the country-the maximum current capacity is 4,000MW and also
summarized other problems as;

Overloading of transformers in service areas,

Lack of development in the sector to implement modern technologies for

communication and monitoring,

Vandalization of lines associated with lack of surveillance on electrical

infrastructure,

Lack of fund to regularly expand, update, modernize, and maintain the network as a
result of resource allocation,

It covers only the major parts of the country,

Inadequate tools and attendant/staffs for urgent maintenance,

Long process of funds allocation to maintenance needs,

Lack of technical know-how to implement the maintenance needs.

3.1.3. Distribution & Marketing

The problems of generation and transmission have been analyzed and the major
hindrances have been considered, it is fair to say present problem would exact an equal
reaction on the distribution network coupled with some marketing problems. Thus, we can
have a full problem profile of distribution and marketing. I spoke with the several
representatives of PHCN marketers and they all have a wide range of problems which need
to be tackled to stabilize the situation. The problems spanned across the problems of
generation and transmission and categorically stated that, many of the aggrieved
customers have displaced their grievance on their staffs as a result of inefficiency in the
generation and transmission stages. This problem faced across all states in Nigeria mostly
lead to their inability to perform. Like the popular saying to whom much is given, much is
expected, many of the populace expect constant supply from the government and the only
people to display their aggression with are the marketers. Some great clash has been

35

recorded in several states of staffs been maltreated, beaten, injured and sometimes killed in
the events of carrying out their jobs.
The problems were summarized thus,

Weak and inadequate network coverage,

Insufficient fund for mobilization and implementing task,

Poor billing system,

Inadequate logistics facilities (tools and vehicles),

Fraudulent practices by staff and very poor customer relations,

Low staff morale and lack of regular training,

Lack of access to remote places in the distribution plan.

Figure 3 below shows the transmission and distribution losses over the years due to lack of
maintenance coupled with the incompetent installed infrastructure to utilize the total
generation capacity.

Figure 3: Transmission and Distribution in Nigeria (23)

36

3.1.4. Consumption
This is virtually the end of the whole needs for generation. Electricity is a vital part of
development and human life but till now people have failed to respect its usage as a result
of many factors. Nigeria havent been able to generate enough to meet its demands thus, a
lot of regulations cannot be implemented on the needs to avoid wastage.
Wastage has been recorded high in various part of the country as a result of improper
billing system and low tariff on electricity aside the technical loses experienced. The
government has subsidized electricity to the extent that, a continuous subsidy will possibly
affect other sectors of the economy.
A group discussion between Nigerian living in western countries has shown that, the
attitude of fresh Nigerian immigrant towards electricity consumption tends to be wasteful;
they tend not to know the value of electricity by consuming electricity wastefully and
unknowingly. This is as a result of inaccurate billing; they have not been billed according to
their usage (fixed/ estimated billing system), no matter their consumption. This
differentiates them from people living in a technological-driven world where billing is
based on consumption coupled with service delivery to satisfy the customers needs.
On the contrary, some electricity customers also said that, they wont pay for electricity
even if its available and referenced that; they provide all the basic amenities by themselves
and they havent got a reason to uphold and hail their citizenry; they provide water for
their homes, generate electricity by themselves, self-construction of roads and drainages to
mention a few.
The summarized problems are,

Inaccurate billing system,

Old system of electricity distribution and monitoring,

Acute demand-supply level,

Increasing poverty level of the country,

Lack of education on the real value of electricity supply and,

37

The negative populace attitude towards electricity consumption.

Figure 4 shows the consumption of electricity according to sectors, this further interprets
that electricity wastage is high in residential as it accounts for the largest consumption. As
a result, its the same people that consumes electricity in residential building, goes to
offices and industries to apply the same wasteful orientation which makes them utilize full
load demand at other places which has an equal effect on the distribution network. The
demand load increases and this weakens and sometimes leads to burnout of some
electrical infrastructures. In view of several burnouts, its not advisable for continuous
replacement by the government if the situation remains the same and the consumers
remains unconscious of energy usage.

Figure 4: Electricity consumption in Nigeria by sectors (22)

Mr. Kamal Habib of the Ministry of Budget and Planning stated that, the population growth
of the country cant be under-estimated with its present population of over 150million and

38

has 70% of its population to be under the age of 30years and 47% are ladies willing and
able to make their own family. He analyzed that; each of the ladies will virtually give birth
to an average of three kids which will put the population of the country in the next decade
close to 340 million. This will put the country as the most populous black nation with great
population density, and with its present ill-economic growth and lack of planning, it could
be the most poverty driven nation in coming years. He stressed the need of the country to
encourage greater and strong planning network for all sectors with the implementation of
rigid laws and strategized approach to enable the citizen have confidence in the
government and future of the nation.
From the above outcomes from the interview with different people that are relevant to this
research, it is fair to summarize the most critical issues facing the power industry into the
subtopics of generation, transmission, distribution, and consumption attitudes. This could
be linked together in a cyclical orientation as represented in figure 5

Figure 5: Relationship of generation, transmission, distribution, and consumption

pattern in Nigeria
Figure 5 shows that all the processes dependent on one another. A given scenario is the
epileptic generation problem as a result of lack of funding and other criteria explained

39

above, this inevitably reduces the capacity of transmission coupled with poor transmission
facilities and other related problems; a resulting lesser voltage to be distributed. The
insufficient distributed voltage leads to a poor marketing ability based on inefficient
service and therefore a low revenue generation. The actual consumption is not billed
accurately and the customers are not keen on knowing the nature of their bills as a result of
fluctuating and unreliable electricity sector and also, most customers are on self electricity
generation.
This will affect the response of the customers to bill payments and then low revenue will be
generated. Thus, yearly accounting analysis sums up to great loses for the power sector
irrespective of its subsidies and then the effects goes on and on which finally leads to
damage of major infrastructure with no regular maintenance.

3.2. National Policy

The legal policies of the country has encouraged electricity generation through all available
potentials but it doesnt enforce sustainability which is the only edge renewable technology
has got over conventional technology outside economics. The summary of the main points
of the regulation mandated through the NERC are;

create, promote and preserve efficient industry and market structures, and to
ensure the optimal utilization of resources for the provision of electricity services;

maximize access to electricity services, by promoting and facilitating consumer

connections to distribution systems in both rural and urban areas;

ensure that an adequate supply of electricity is available to consumers;

ensure that the prices charged by licensees are fair to consumers and are sufficient
to allow the licensees to finance their activities and to allow for reasonable earnings
for efficient operations;

ensure the safety, security, reliability, and quality of service in the production and
delivery of electricity to consumers; and

ensure that regulation is fair and balanced for licensees, consumers, investors, and
other stakeholders.

40

Considering the above statements, various progresses have been made by the NERC on
implementing strategic project to enhance development in the power industry but the
sector has not been liberalized to enhance competition in its real sense. Many of the
projects and licenses are awarded not based on merit of the awardees, and policies arent
rigid enough to deal with defaulters. There is also need for national energy master-plan
that would efficiently manage each parts of the nation effectively by enhancing and
empowering states and local government into full time independent energy producers and
marketers if they so wish.
The problem of fuel sourcing should also be backed legally to avoid the fluctuation in
energy production as major consumers like power station wouldnt for any reason source
operation-fuel from the black market. The institutionalization of renewable energy funds
which will help promote local manufacturers, suppliers, and renewable energy users
through incentives should be considered in energy policies.
3.3. Management and Corruption Issues
This is the major of any organization and the government has suffered from this issue as
most of the workers arent dedicated to doing their jobs in the right way. Many factors are
responsible for this due to the country planning and organization pattern. It includes but
not limited to;

inconsistence in salary packages:

greed

monitoring and auditing issues

leadership qualities and characters

The workers have complained that the take home packages have not encouraged them to
devote all their abilities into the job as most of them have to look for additional jobs to
supplement their income and meet up with expenses they spend on the government job.
Also inflation occurs several times in a year but, there hardly have a salary review in four
years. Also some workers complained of salary delays for weeks after due time.

41

Greed is generally accepted to be ruining the state of economy in the country which occurs
deep into the system of governance and attempt to tackle it hasnt yielded any positive
result; thus younger generation are capitalizing on its continuity.
The issues of monitoring and auditing hasnt been tackled at all, no agency is responsible
for auditing or monitoring the potential problems and therefore create a complex scenario
after the situation has been abandoned for long. Most of the projects awarded are not
monitored and then a failed result will be the output

3.4. Inaccurate Data

This problem cuts across all sectors of the economy. The provision of adequate electricity
for the nation need some basic data like the actual population count which shouldnt be
politically influenced, the present generation, transmission and distribution capacity, the
structural capability of the environment compared to its actual demands and needs, e.t.c.
Most part of the nation is agreed to be under the rural communities and even the Local
Governments managing their environment is yet to include them on their planning map or
have a detailed statistics about them, how then would the State and Federal Government
access genuine information of these localities. This leads to inadequate provision for them
since the present amenities are only for the urban areas where records are known.
Historically, most estimate done to excess or surplus the actual budget in order to
incorporate un-recorded statistics have been falsified mostly due to under-estimation. This
shows that, the unrecorded values of any parameter in the country is greater than the
recorded value, thus any forecast based on inaccurate data will give an unrealistic future.

42

4. ECONOMIC ANALYSIS OF EMBEDDED POWER GENERATION (EPG).

As explained in earlier chapters, the urgent need for adequate electricity is the status of
Nigeria but, when structuring a solution, a lot of parameters need to be considered to avoid
implementing project that might be termed wasteful, uneconomical or unsustainable in the
nearest future. As a result of this, this chapter compares the proposed concept-Embedded
Power Generation (EPG) and the conventional concept-Central Plant System (CPS) under
economic and sustainable parameters to realize an ideal option for future electricity.
To do justice to the framework of this dissertation, all parameters have to be considered to
enable an effective performance of an ideal solution. These sums up to major parameters
for comparison of the two concepts as;
Emission,
Cost of technology;

Capital cost, Operation and maintenance

Cost of per kWh

Technical and non technical loses,

Distribution and coverage,
Efficiency (sustainability),
Environmental impact.
In view of these parameters, a summary will be extracted from the characteristic of the two
concepts. This is to present their potential effectiveness towards electricity structuring and
distribution in Nigeria.

4.1. Emission
This occurs as a result of the combustion of fuel in the power industry. Emission is a very
important factor when considering sustainability, thus energy and carbon conversion is
helpful to calculate the energy values in different units and its equivalent emission factor of

43

different fuel sources. The table 4 below shows the summary sourced from Department for
Environment, Food and Rural Affairs (DEFRA)-carbon trust.
Table 3: Emission conversion
FUEL

UNITS

Kg CO2 /unit

Grid electricity

KWh

0.537

Renewable electricity

KWh

Natural gas

KWh

0.185

Therms

5.421

KWh

0.214

Therms

6.277

Litres

1.495

Tonnes

3,190

KWh

0.252

Tonnes

2.674

Tonnes

3,223

KWh

0.268

Tonnes

3,150

KWh

0.245

Tonnes

3,164

KWh

0.250

Litres

2.630

Tonnes

3,135

KWh

0.240

Litres

2.315

Tonnes

2,457

KWh

0.330

Tonnes

132

KWh

0.025

LPG

Gas oil

Fuel oil
Burning oil
Diesel

Petrol

Industrial coal
Wood pellets

44

Having these values, it very easy to delineate the values of the carbon dioxide emitted from
the various technologies which is planned for electricity generation process. According to
appendix I, it shows a proposed plan of generating 17,887MW of electricity of which
80.16% is thermal (gas), and 19.84% hydropower. This gives us 14,338MW electricity from
gas and 3,549MW of hydropower,
Statistical representation:
For gas;
14338MW

= (14338 x 8760hours)

125.6 x 106MWh
125.6 x 109kWh
23.24 x 109Kg CO2

= 125.6 x 106MWh
= 125.6 x 109kWh

= (125.6 x 109 x 0.185)

= 23.24 x 109Kg CO2

=23.94 x 106 tonnes of CO2 Annually

For hydropower;
3,549MW

= 0Kg CO2 Annually

For EPG, which could use renewable energy or conventional fuel, the emission is zero for
renewable as seen with hydropower or other renewable sources and a measurable volume
with regards to the fuel technology used. In Nigeria, the present forms of embedded
generation available are PV, diesel, and petrol generators which are widely distributed in
the cities and sparsely available in the rural area. Availability of petrol and diesel
generators is due to cost of operating and availability of fuel in a close distances. These
generators are highly inefficient due to their standards and produces greater emission. The
smaller ones have a life span of 18months and the larger ones could work efficiently for
5years depending on its originality and maintenance.

45

Statistical representation of diesel and petrol generators:

Diesel generator;
1 litre of diesel

= 10.9kWh

10.9kWh of diesel (10.9kWh 0.250) 2.725kgCO2 per litre

10.9kWh of diesel

= (10.9kWh x 0.250)

= 2.725Kg CO2 per litre

Petrol generators;
1 litre of petrol
9.6kWh of petrol

= 9.6kWh
= (9.6kWh x 0.240)

= 2.3Kg CO2 per litre

Note: the emission standards all depends on the condition of the generators, capacity
factor, load factor and efficiency. The above calculation has been done based on a new
generator with efficiency of 90%, capacity factor 0.85 and operating under the load
capacity.
As earlier stated in previous chapter, an estimate of 60million Nigerian uses generators for
self power generation. Another newspaper blog says Nigerian using generators consumes
an average of four litres of fuel per day for electricity purpose (24).
It we assumed that, the minimum emissive fuel type is used for the generator which is
petrol.
Statistical representation:
60million x 4 litres
240 x 106 litres
240 x 106 litres

= 240 x 106 litres

= (240 x 106 litres x 9.6)

= 2304 x 106 kWh/day

= 552 x 106Kg of CO2 daily

46

The above statistics clearly shows that, the minimum inevitable emission is 552,000 tonnes
of CO2 daily. Its is clear that embedded self generation from petrol and diesel is not in
anyway good for the environment, as other sources of pollution like transportation which
produces a greater amount of greenhouse gases to the environment is also of major
concern. Thus any attempt to implement an energy intensive project, the emission
potentials of the project should be considered.
From table 4, we can conclude that, natural gas is the cleanest non-renewable energy due
its low emission level, and the proposed power plants will be fueled by natural gas.
Unfortunately, the huge investment required to build infrastructure such as gas pipelines
for an enabling environment is a barrier thats yet to be crossed. Also, natural gas could be
highly abundant in the country but, parameters such as local fuel security and vandalism of
government properties which could suspend the operation of the stations should be
considered which continues to pose a threat to the Nigerian oil industry, irrespective of its
abundance. It is also clear from earlier analysis in table 1 that the abundance of resources
in Nigeria creates an open option for mixed-generation. Any of these resources could be
tapped to enhance mixed-generation, avoid wastage of natural gas and enhance fuel
security for the future of the power industry.

4.2. Cost of Technology

This section compares both concept of EPG and CPS and discusses which is economically
viable per kWh or MWh of electricity produced. It shows cost comparison of the two
concepts under the different possible fuel technologies with references to;
Capital cost, operation and maintenance
Cost of per kWh
4.2.1. Capital cost, operation and maintenance
To analyze this part with the various fuel technologies available, we have to consider the
costing necessary for generation, transmission and distribution. We have to take note that
the cost incurred for transmission could vary depending on;

47

the style or technology adapted in the project,

the voltage to be transmitted and also

the terrain over which transmission companies build transmission lines also affects
cost, e.g. mountainous terrain far from roads and relatively flat plains with nearby
roads.

Thus, an assumption will be made from the National Association of Regulatory Utility
Commission (NARUC) in the United States of America. The NARUC stated according to
estimates from various project that, the cost of transmission ranges from $US 0.5
1.5million per mile (25).
It is generally accepted that the capital cost for electricity production varies with the type
of fuel technology and the types of plant, so the various expenses to be incurred in
generating a MWh of electricity through different technologies according to the United
States Department of Energy (DOE) is represented in Appendix II.
Appendix II, represents the cost for conventional plant system, thus if we assume that there
is no other variable or changes that is meant to occur with costing for the EPG except for
cost of transmission which is zero, then a resulting difference of just the transmission cost
will be represented in the table 5

Table 4: Cost comparison between CSP and EPG

Plant Type

Total System Levelized Cost $/megawatt-hour

CSP

EPG = CSP Transmission

Investment

Conventional coal

94.8

93.6

Advanced coal

109.4

108.2

Advanced coal with CCS

136.2

135.0

66.1

64.9

Natural gas-fired

Conventional

48

combined cycle

Advanced combined 63.1

61.9

cycle

Advanced

CC

with 89.3

88.1

CCS
124.5

121.0

103.5

100.0

Advanced nuclear

113.9

112.9

Wind

97.0

93.5

Wind- Offshore

243.2

237.3

Solar PV1

210.7

206.7

Solar thermal

311.8

306.0

Geothermal

101.7

100.7

Biomass

112.5

111.2

Hydro

86.4

84.5

Conventional
combustion turbine

Advanced
combustion turbine

Table 5 could be represented in a chat to graphically compare the differences.

49

$350.00
$300.00
$250.00
$200.00
$150.00
CSP

$100.00

EPG = CSP Transmission

Investment

$50.00
$0.00

Figure 6: Costing per MWh of electricity produced from different plant types
($/MWh)

From the above charts and figures from the tables, it is clear that, EPG is a better option
when economic costing is considered as the single parameter for project choice and
implementation.

4.2.2. Costing per kWh

The analysis in Table 6 shows the variation in the cost of different fuel technologies
adapted from the Canadian Energy Research Institute (CERI). This assumption is made to
suite Nigeria as there arent any available details for the costing per kilowatt of electricity
produced in Nigeria.

50

Table 5: Technology costing per kWh

TECHNOLOGY

COST

PER

KWh COST PER KWh (Nigerian

(Canadian cent)

Naira)

Coal

7.9

Gas

14.22

Biomass

12.64

Biomass co-firing

11

17.38

Micro hydro

27

42.66

Small hydro

19

30

Large hydro

10

15.8

Solar PV

79

124.84

Solar thermal

35

55.31

Wind

11

17.38

*exchange rate was adapted from www.xe.com which evaluates 1cent as 1.58naira (July
2011).
The above table is interpreted into a chart as shown below

NGN 140.00
NGN 120.00
NGN 100.00
NGN 80.00
NGN 60.00
NGN 40.00
NGN 20.00
NGN 0.00

Figure 7: Cost per kWh (Nigerian naira)

51

Solar PV is the most expensive technology to generate electricity as shown by figure 7. It

should be emphasized that as much as solar intensity is very much available in the
northern part of the country, the technology is still very much in its infancy and there are
ongoing research as to reduction in the price of the panel and increase in the conversion
efficiency. The cheapest technology is the coal followed by biomass and then the most
utilized in Nigeria which is thermal (Gas). Other technologies also could be harnessed but
they have not been incorporated due to strategic difficulties in managing and operating
them while most renewable technology hasnt been applied fully as a result of the
intermittency and historic uncertainty.

4.3. Technical and non-technical loses

This helps to compare the technical and non-technical loses associated with both concepts
of CPG and EPG. The table below shows the proposed plan of power generation with its
present loses and a projected reduction in loses for the upcoming years by the NERC and
the power planning committee.

Table 6: Effect of transmission and distribution loses with projection plan (central
stations)
Description

2011

2012

Out-going power(GWh)

97,131

109,272 115,829 122,778

130,145

Transmission loses

8.05%

8.05%

8.05%

Delivered to distribution(GWh)

89,312

100,476 106,504 112,895

119,668

Distribution loses

11%

11%

10%

10%

10%

Delivered to customers(GWh)

79,488

89,423

86,269

93,477

101,239

Non technical loses

14%

12%

10%

8%

6%

Billed to customers

68,359

78,693

86,269

93,477

101.239

Revenue collection loses

8%

6%

4%

2%

2%

73,971

82,818

91,607

99,215

Sales where revenue is collected 62,891

2013
8.05%

2014
8.05%

2015

52

(GWh)
Revenue based sales as % of out- 65%

68%

72%

75%

76%

going

The present transmission loses in Nigeria from the grid is a constant 8.05% of the outgoing
power from the central station, other loses recorded presently are the distribution loses,
non-technical loses, and revenue collection loses all of which are projected to reduce as the
year goes by with more effective management. From table 6, the percentage revenue of the
outgoing power from a central station is 65% for 2011 and 76% to be expected in 2015
considering greater management efforts across all phases of electricity generation to
consumption.
The next table shows a scenario of the losses that could be encountered from embedded
power generation using the same power generation techniques with the same power
output for the present and upcoming years ahead.

Table 7: Effect of transmission and distribution loses with projection plan

(Embedded Generation)
Conventional Embedded Generation
Plant
Description

2011

2012

2013

Out-going power(GWh)

97,131

109,272 115,829 122,778

130,145

Transmission loses

8.05%

2014
-

2015

Delivered to distribution(GWh) 89,312

109,272 115,829 122,778

130,145

Distribution loses

11%

7.33%

4.33%

Delivered to customers(GWh)

79,488

101,262 108,497 109,655

124,510

Non technical loses

14%

7%

5%

1%

Billed to customers

68,359

94,174

103,072 106,366

123,265

Revenue collection loses

8%

5%

4%

2%

6.33%

5.33%
3%
3%

53

Sales

where

revenue

is 62,891

89,465

98,949

103,175

120,800

82%

85.4%

89%

93%

collected (GWh)
Revenue based sales as % of 65%
out-going
*note; 2011, is the baseline for the calculation and the projection is made from 2012 for
EPG.
From tables 7 & 8, we could extract the revenue generated from both concepts as a product
of their encountered loses and simplify it into a table of revenue as shown below.
Table 8: Comparison Revenue Sales between Both Concepts; CPS and EPG
YEAR

CPS

EPG

Sales where revenue is

collected
Revenue based sales as
% of out-going
Sales where revenue is
collected
Revenue based sales as
% of out-going

2011
2012
2013
2014
2015
62,891
73,971
82,818
91,607
99,215
65%

68%

72%

75%

76%

62,891

89,465

98,949

103,175

120,800

65%

82%

85.4%

89%

93%

54

100.0%
95.0%
90.0%
85.0%
80.0%
CP

75.0%

EG

70.0%
65.0%
60.0%
55.0%
50.0%
2010.5 2011 2011.5 2012 2012.5 2013 2013.5 2014 2014.5 2015 2015.5

Figure 8: Comparison Revenue Sales between Both Concepts-CP and EG

From the chart, it is clear that EG has a reduced loses encountered in the medium of
electricity production to consumption and therefore a greater revenue due to its smaller
size, easier management and low maintenance requirement depending on the size of the
plant.

55

4.4. Distribution and adequacy

This part of the analysis helps to measure the extent of coverage between the traditional
CPS and the proposed EPG concept as a product of the historical relevance in Nigeria. The
numbers of people that benefits from the central station might be estimated huge but as a
matter of fact the grid supply electricity to approximately 4.7million customers which is
generated from central power station as at 2009

(26).

These numbers could be further

analyzed by comparing it with the demand of the business centre of Nigeria which is Lagos
state. The Governor of Lagos State in his annual economic briefing stated that; Lagos has
approximately 4million homes and each home accommodates an average of four people,
this puts the total number of its occupant to 16million people. Thus, we could assume that,
the numbers of people that benefits from the electricity supply of the whole nation is
optimally 20million people including ghost consumers (people who dont pay for electricity
and their usage isnt recorded).
However, as earlier introduced in chapter one that, most of the populace inhibits the rural
environment, and the inadequacy of electricity produced from the generation station and
economics of revenue generation makes it impossible and uneconomical to supply
electricity to the rural communities; if electricity infrastructures are extended into the rural
area, the expected revenue wont be achieved due to the poverty level and unemployment
rate. Thus the load and revenue managers prefer to distribute to cities where greater sales
could be achieved so as to meet their revenue target.
The PHCN also complimented this and stated in the last consumer protection forum that;
the cities are responsible for 90% of their revenue irrespective of its undercharged
electricity prices and most of the power supplied to the rural communities is mostly lost as
revenue collection hasnt been an easy task. This statement could be backed by the load
management scheme which made Lagos State benefit 1000MW from the staggering
4000MW national capacity.
Funds secured through electricity sales is also less than the cost of generating electricity
and the government has been subsidizing the cost of electricity over the years but the

56

inconsistency in subsidy keeps the IPPs running a negative account and also scares
potential investors.
All the above issues and concerns are due to the problem associated with central station
and the way the sector has been managed over the years. Thus, EPG could be a better
alternative for power generation if it could be available in all communities or in all the 776
Local Government to produce electricity according to their needs and tapping from the
available resources within 20-50Kilometers circumference distances around their
environment. This concept is sure to provide the country with easy access to electricity and
greater coverage of the rural areas. Greater revenue could be generated as microgeneration could be easily monitored, therefore, marketing activities could be directed to
target customers and management streamlined to plant capacities.
The EPG structure could also be likened to that of the rural water supply in Nigeria.
Historically, the central water distribution plan doesnt reach the rural communities due to
discontinuity in the infrastructural project or sometimes due to shortage in water level
from the District Water Corporation or sometimes distance of travel or sometimes no
electricity to power the pumps, or pressure drop encountered due to pipeline leakages
which arent monitored.
Since huge funding is necessary to implement major projects, Local and State Government
have resulted to financing micro project that will effectively cater for the small
communities and reduce their inaccessibility to basic amenities. Water supply has been
made available to them in varieties of ways, ranging from the hand powered surfaced water
pumps to a submersible pump depending on electricity availability in the different regions.
This project might not have helped so much due to the quantity decommissioned but it has
greatly helped the rural communities have access to quality and clean underground water.
From the above discussion, the distributed concept has worked for water supply, it could
also be applied to electricity supply to shed load pressure off the national grid, provide
basic electricity supply for the needs of the villages and communities, help Local and State
Government to cater for domestic loads and increase value and quality of life.

57

Efficiency (sustainability)

This is the measure of the competency of performance of a system or concept as regards

this dissertation. The efficiency of the two concept of electricity generation discussed in
this book could be estimated from the different stages of electricity production to
consumption. Several losses are measure at different stages according to table 7 & 8, EPG
concept increases the efficiency of the power that gets to the consumer by reducing loses
incurred during distribution, minimize cost of transmission and distribution, eliminating
bulk cost of transmission, reduces the non-technical loses, and increases the access of
effective power audit and management due to its small sizing.

4.5. Environmental impact

This section compares both concept as earlier introduced as regards their impact and risk
assesment on the environment. This will be represented comprehensively in table 9 and all
the criteria percieved to be necessary is shown below.

Table 9: Potential impacts for CPS and EPG

Parameters Description

Concept Geographical

Inpact

Nature Significane

Adverse

Lt, IR

Major

importance
I N R D L
Human

Disturbance

beigns

to

existing

CPS

EPG

Normal

Lt, R

Minor

Noise

and CPS

Adverse

Lt, IR

Major

traffic

EPG

Normal

St, R

Minor

Health

and CPS

Adverse

Lt,IR,R

Major

safety

EPG

Adverse

Lt, R

Minor

properties

58

Flora

and Loss of grass CPS

fauna

land

Adverse

Lt, IR

Major

Normal

Lt, IR

Minor

Beneficial Lt, IR

Major

Beneficial St, IR

Minor

Normal

Lt,!R

Major

Adverse

Lt, IR

Major

Adverse

Lt, IR

Major

Adverse

Lt, IR

Minor

Adverse

Lt, R

Adverse

Lt, R

of

conservation
value
Creation

EPG

of CPS

*
*

new habitat
EPG
Aesthetics

CPS

*
*

EPG
Soil

and Loss of great CPS

geology

agricutural
soil

Water

EPG

Reduction in CPS

*
*

groundwater
discharge

Keys:

EPG

Minor

I=INTERNATIONAL, N= NATIONAL, D= DISTRICT, R= REGIONAL, L= LOCAL

St=SHOR TERM, Lt= LONG TERM, IR=IRREVERSIBLE, R=REVERSIBLE
CPS= CENTRAL POWER STATION, EPG= EMBEDDED POWER GENERATION

From the overall potentials considered in the above table, it is clear that the negative
potential impact which arises from a CPS is greater than that of the EPG. Noise is dependant
on the type of fuel technology applied in the EPG. If renewable energy is utilized, then EPG
stand a better point with noise emission but if otherwise, then noise is surely a problem of
great consideration in locating the operating plants.
The only clear considerable impact from the EPG is the aesthetics. EPG will affect the
beauty of the environment and possibly affect serenity. Modern architectural designs could
be applied if EPG is to be considered a preferred option.

59

From all that has been explained from the beginning of this chapter, we have been able to
measure the characteristics of CPS and EPG against parameters like; emission, cost,
adequacy, efficiency and lastly the environmental impact, thus we have qualitatively seen
reasons why EPG concept should be chosen over the CPS concept.
It will be justified to delineate some more fact that, while we have known EPG as a better
option based on the parameters which we considered in this chapter, there are other
difficulties and shortcoming of EPG especially with renewable energy (non-hydro) which
are;

Energy density (compared to fossil fuel, nuclear, hydro power ),

Base load vs. special application

Incremental load

Practicality

Reliability and security of power systems (unproven technology, still in R&D mode)

The above listed points are the problems of renewable energy when considered for EPG, a
more satisfactory report need to be done based on the intermittency of resources at
different locations in Nigeria to enable its full application.

60

5. MAKING IT HAPPEN
The history and problems of electricity has been detailed in the above chapters followed by
the potential solution to help reduce the problem of adequacy and sustainability in Nigeria
as it wheels towards the direction of an industrialized economy for 2020. We have been
able to measure the viability of EPG considering the needs of Nigeria; this chapter aims at
analyzing the parameters to achieve realities through EPG.
From a techno-economic view, the ways forward have been itemized below and the way to
which they affect the proposed solution has been analyzed;
This includes;
Funding; poverty level, greed, e.t.c.
Planning and Operation; Distribution planning and transmission congestion,
Registration and licensing, Public enlightenment on the value of electricity,
Marketing, Technical knowhow and poor engineering, Privatization and enabling
environment, Corruption and management, Measurement and accuracy, and
Regulation and Policies.

5.1. Funding
As earlier discussed in previous chapters, the volume of funds to be incurred into the
power sector is huge and the Federal Government alone cannot comfortably handle this
investment. This huge task coupled with the urgent needs of other sectors of the economy
has made the government introduce private partnership which is yet to make a clear
impact in the industry. However, the funding of projects like this is achievable if the
environment is friendly enough to permit business growth and policy implementation to
enhance protection and consideration of investors interest without compromising the
interests and needs of the consumers and the populace at large.
Government has taken a bold step in sourcing for private partnership in the major sectors
due to lack of funds which affects development and hence a poverty driven economy is

61

experienced. Privatization has helped the power sector to records some huge investment
into the generation of power, but this is still very much at its infancy compared to the
actual need of the sector to meet the demand of the Nation.
All phases have been flagged with one problem or the other which contributes to the
general problem the sector faces. EPG is a measure to bridge the gap between supply and
demand at the same time an optimum option for including renewable technologies into the
energy supply mix of the country.
The need and urgency of funding into this sector is of high importance as electricity plays a
vital role in economic growth of any nation. While the interaction of a no constraints
economy depends on labour supply, raw materials, technology and energy as shown in
Figure 9 below, none of the flow variable and depending parameters is independent on
funding to have an effective and functional contribution to the economy.

Figure 9: Relationship between functional economic parameters

In view of the interaction of the above parameters, energy is seen to be capable of creating
a lapse in a functional economy, and thus need urgent attention.

62

As earlier said in chapter 1, energy is abundant in the country but unfortunately ignorance
and lack of investment into the power sector accounted for the present problem and the
only viable solution is creating a path to invest hugely in the power sector by sustainably
harnessing all the possible sources of energy, and by prioritizing electricity with its need to
technological development, raw material harnessing and domestic usage for the general
populace.
It can be estimated that; to actually supply 1MWe, a sum of US$1.5million needs to be
invested which shows the volume of investment needed to sustainably power any
industrialized Nation. Considering Nigeria, the present gap between demand and supply
exceeds 70,000MW in view of its population which leaves the country no choice but to
invest over US$100 billion to achieve its aim of an industrialized economy by 2020.

5.2. Planning and operation

This is the major of any organization to prove it competency and capability in achieving the
designated aims and objectives. The way an organization operates depends on various
structures and the operating parameters of the industry in which they operate. The power
industry in Nigeria is a complex industry that has a great flux of some smaller companies
charged with different responsibilities and management in order to achieve the goal of
effective and efficient supply. The different departments under the operation and
managements which needs attention are;

Distribution planning and transmission congestion: record has shown that up to

35% of outgoing power from the generation station is loss as a result of
transmission and distribution. This raise the concern of the technical team on
minimizing the percentage loses to the barest minimum. EPG is sure an option to
minimize this loses as the idea of transmission will be ignored from the generation
to consumption. Even though as this is an option for saving electricity, energy saving
measures such as electricity audit at both input point and discharge points should
be introduced to periodically monitor demands and potential loses. Technically,

63

strategies have to be put in place to achieve the stringent but achievable savings
needed which could help improve adequacy and increase consumers reliance on
public power supply. New technologies have to be implored to effectively and
efficiently distribute power without the grid.

Registration and licensing: EPG could effectively work if there is a scheduled pattern
of registering customers for electrical supply. This project could be tagged rural
electrification but this is not limited to the rural areas alone. The problem of data
security and management affects all sectors of the economy as no genuine
information is available as regards identification. Economy planning is a product of
grassroots development and empowerment which can only be done through
biometrics identification system and this is not available in Nigeria. This measure
could be used to introduce a database of record into the economy and the idea of tax
fraud/evasion will be reduced, hence greater income will be recorded for the
industry to wheel forward.

Public enlightenment on the value of electricity: this is a media and educational

assignment. Greatest population of the nation lies below the age of 30 years and
most of these people dont know the real value of electricity. Energy saving modules
should be introduced to elementary, secondary and tertiary schools to enable
incorporate energy values into the society. Electricity is subsidized in Nigeria to a
great extent due to huge loses, electricity theft and wastage but all this can be
minimized if people are enlightened on how useful it is and of course people know
the difference between darkness and light. People that fall above the age of 30 could
be patronized to be energy efficient by continuous television and radio adverts
coupled with billboards awareness, or by learning from their kids.

Marketing: is the all in one tool that economically ascertain growth within any
organization. Many of the people have a negative assumption towards getting any
reliable power supply and as a result, an increase in the population of self
generation. The present situation could make marketing a tough task; the
capabilities of the distribution companies have to be proven beyond fluctuation

64

before marketing option could be viable. Customer relation and satisfaction also
have to be guaranteed and the customers must be given priority to increase reliance
and reduce public condemnation.

Technical knowhow and poor engineering: in EG, this could be a problem if the right
engineering techniques is not implored. Due to its mini scale, EG is easy to maintain
but it requires some modern engineering capabilities to assume its efficiency. Huge
investment is required to equip the workers on the level of operation and
maintenance of the plant to avoid great damages. This could also be done by means
of automation and therefore a reduced labour force.

Privatization and enabling environment: the involvement of the private sector in the
generation of electricity is a great step but until now, investors have suffered a poor
business environment as they trade the power produced to PHCN and they get paid
for the value of electricity produced in an untimely manner. Electricity is traded
with a regulated margin from the NERC through its Multi Year Tariff Order (MYTO).
Although this is healthy for the consumers but the structure of payment of subsidies
isnt well organized as the huge sum of fund paid as subsidy from the government is
mostly delayed due to bureaucracy according to the investors and this makes them
source external funds for continuous operation and maintenance. The funds incur
interest depending on the loan period from their funding bodies which isnt
included in the payback from the regulatory bodies and thus, investors ends up in a
great loss. An institutional structure should be implemented with the Federal
Government as the central organ working in tandem with States and Local
Government through reporting and legalities which should considerably
incorporate the balanced interest of both producers and consumers.

Corruption and management: this occurs as the greatest of it all. To achieve a good
result across any industry, leadership should be seen as an opportunity to serve not
an avenue to misuse power. This is a greatest problem in Nigeria and it affects the
smallest of organizations. Management and audit should be the utmost in any of the
public functions to ascertain transparency and diligent services. People should be

65

charged with federal crimes in the event of funds misappropriation which is the
order of the day. Public office assumption and status should be re-instated and given
the branding which it deserves through quality leadership to reinstate trust and
confidence into the followers. Financial actions should be tagged with identities and
password to reduce financial crimes and mass tax fraud.

Measurement and accuracy: history of electricity and demand of the country has
shown that there isnt a detailed study of the load demand, hence estimate and
assumptions has been used to reach a figure on the needs of the country and which
most times isnt projected right. EG will help to provide electricity through the rural
and urban electrification program so as to reach the isolated communities and also
accurately measure the actual demand of every localities and state. This could be
done by effective operational surveys of a year or more to detail the power
requirement according to the departmental usage or application, and then a
futuristic forecast could be done considering population growth and other
parameters to enhance a federal power plan.

5.3. Regulatory policies for EG

The basic of the Power Sector Reform Act, 2005 has empowered NERC to maximize access
to electricity by promoting and facilitating consumers connection to distribution systems
in both rural and urban areas and ensure adequate supply of electricity is available to the
populace. It further emphasize on the safety, quality, security, and reliability of service in
the process of delivering electricity to consumers.
Also, the Act mandate any person engaging in the generation of power above 1MW to
obtain a license for operation, and the distribution of power could be evacuated through
the distribution network to the third party in order to maximize access to electricity for
every Nigerian.

66

5.3.1. Implication of the present legal framework

From the existing frame of policies and the various stages of power project
implementation, it is clear that; the plan to provide adequate electricity is on its way to
reality but this might end up like other project which has been earlier implemented in the
sector and proposed solutions turns out to be problem which will have to be tackled again.
The institutionalizing of a preferred regulatory framework for the betterment of the
present situation involves the full privatization practice of the generation, transmission,
distribution and marketing phases to enable competition and open market satisfaction for
the consumers, coupled with rigid government laws to punish law breaker and protect
power producers and consumers.
The first obligation of the regulation is to protect all parties- generators, distributors,
marketers, and consumers and enable them to know their rights as a means to satisfaction.
Active bodies could be created to implement this under the mandate of the regulations, and
to enable them fluidize relationship between the Generators and the Distributors, the
Distributors and Marketers, the Marketers and Consumers. This could be done by
contractual agreements between parties that will be ratified by designated agents.
The regulation should also be amended for Generators to incorporate sustainability; this is
the only viable way of making renewable energy a preferred and compulsory means of
power generation. The conventional power generation system utilizes thermal due to gas
abundance but the cost of enabling the environment for the structural satisfaction needs to
be considered. Its estimated by the Ministry of Power in Nigeria that, constructing new gas
pipelines for effective distribution, a sum of N1.23 Trillion (US$7.8 Billion) as at 2005 out
of which about N361 Billion was released from the excess crude account. This shows the
volume of money to be incurred to stabilize electricity in the nation. A clear advantage of
EPG is the ability to boycott excess and wasteful transmission cost from the substations to
remote areas, since it is possible to bring generation closer in the rural areas by harnessing
renewable energy, a tangible amount of the structural cost could be saved and diverted to
other pending projects of urgent needs.

67

Licenses have been issued to some generators to generate electricity but if the regulation
could be amended to include a 65-35% of non-renewable and renewable energy ratio
respectively, there will be a window for EPG and also enhance sustainability. This could be
backed up by friendly policies like tax holidays, or carrot and stick approach to promote
investors interest, moreover, the market in Nigeria is very large to tap from in terms of
electricity generation.
In view of the present policies, amendment should be done to enhance transparency and
sustainability in the power sector to effectively promote growth of the industry and
empowerment of the people.

68

6. CONCLUSION
Even though it is very disappointing and frustrating that earlier research outcomes havent
been appraised by the Government on the problems of electricity, this research has been
done to the effect of future needs. The problem of adequate electricity has been tagged
with; ineffective policies, poor management, great infrastructural need and majorly
funding.
Government policies are the only viable means of incorporating renewable energy into
Nigerian electricity mix. Carrot and stick approach should be incorporated into the legal
system to solemnly enable people abide by the law without compromising its effectiveness.
Management which remains a power house to the success of any economy is a capital error
in Nigerian public sector and this is the major problem that initiated the ongoing power
experience.
From the phase of this dissertation, EPG could be the next optimal solution to the problems
of electricity adequacy in Nigeria. However, more statistical research should be carried out
to qualitatively measure the degree of all the problems identified and a corresponding
tactical strategy on solving the problem. It should be stressed that mixed concept
application (EPG and CPS) will be highly effective if distant location from transmission
system are run off-grid with EPG while the cities stay on the CPS due to the problems of
retrofitting.
It should also be noted that, expanding the nation grid is key to the long term demands of
the country. This should be implemented with the appropriate technologies to avoid
substantial development in the nearest future. An energy master plan should be developed
to incorporate all the live parameters such as;

demographic and econometric data- customer base & classes, annual peak demand
& losses, tariff structure, outstanding connection & new connection rate, power
allocation, voltage profile, hourly and monthly load for 5years

69

historic and operational data- population breakdown, birthrate, mortality rate,

annual GDP, employment rate, housing, number of people per house, per capita
income e.t.c

weather data- average temperature, rainfall & humidity

6.1. Contribution to the Knowledge

It is accepted that limited work has been done to introduce this EPG concept in Nigeria and
the NERC has prepared a public consultation to enhance the concept of EPG but responses
have not been received much on it. This material has been able to do justice to the two
concepts of electricity generation by unbiased techno-economic comparison; this could
serve as a foundation for future and more technical works to be carried out to analyze all
other viable strategies to adequate provision of electricity to the Nation.

6.2. Limitation to the Study

It is important to note that, this study is only applicable to support rural electrification
program due to population density and distribution of settlement in Nigeria. There is great
concern for EPG suitability in the urban areas but to an extent EPG has been applied in
some developing cities and housing estates/schemes to help reduce power failure.
It is important to note the general limitation when taking the study as well which are listed
below;

Lack of strong communication with relevant agency to enable qualitative material

Inability of materials certification from regulatory bodies

Hardship in fixing up an appointment with executives

Ambiguous data presented by different organization.

70

6.3. Future work

Future work could be related to some strategic problem solving points from that was
discussed in chapter three which analyzes the major problems of electricity generation,
transmission and distribution.
Concentration should be made on;

infrastructural security

design and operation of future distribution systems to enable EPG towards a plugand-play system

synchronization of EPG with the present infrastructure

energy demand management and data accuracy

How can EPG be dispatched centrally (if wanted), and what data infrastructure is
needed to achieve this

71

APPENDIX
I: Planned total future electricity generation infrastructure in Nigeria (7)
S/N Power Station

Type

State

Capacity

Status

(MW)
1

Geregu

Thermal

Kogi

414

Ongoing

Papalanto

Thermal

Ogun

335

Ongoing

Omotosho

Thermal

Ondo

335

Ongoing

Alaoji

Thermal

Abia

504

Ongoing

Omoku

Thermal

Rivers

230

New IPP

Rain/Ube

Thermal

Balyesa

225

New IPP

Sapele

Thermal

Delta

451

New IPP

Eyaon

Thermal

Edo

451

New IPP

Egboma

Thermal

Imo

338

New IPP

10

Caliber

Thermal

Cross

561

New IPP

River
11

Mambilla

Hydro

Taraba

2600

New

12

Zungeru

Hydro

Niger

950

New

13

AES

Thermal

Lagos

300

Commissioned
IPP

14

AGIP Okpai

Thermal

Delta

480

Commissioned
IPP

15

Omoku

Thermal

Rivers

150

Approved IPP

16

Obajana

Thermal

Kogi

350

Approved IPP

17

Ibom power

Thermal

Akwa-

188

Approved IPP

Ibom
18

Ethiope Energy Ltd

2800

Approved
Licenses IPP

19

Farm Electric Supply Ltd

150

Approved
Licenses IPP

20

ICS Power

624

Approved

72

Licenses IPP
21

Supertek Ltd

1000

Approved
Licenses IPP

22

Mabon Ltd

39

Approved
Licenses IPP

23

Geometric Ltd

140

Approved
Licenses IPP

24

Aba Power Ltd

Licensed
Distributor

25

Westcom Tech & Energy

Service Ltd

1000

License
Granted IPP

26

Lotus & Bresson Nig Ltd

60

License
Granted IPP

27

Anita Energy Ltd

136

License
Granted IPP

28

First Independent Power Co

Ltd

95

License
Granted IPP

29

First Independent Power Co

Ltd

150

License
Granted IPP

30

Hudson Power Station Ltd

200

License
Granted IPP

31

Ibafo Power Station Ltd

640

License
Granted IPP

32

Shell Distribution Coy Ltd

100

License
Granted IPP

33

Agbara Shoeline Power Co

Ltd

1800

License
Granted IPP

34

Index thermal power Ltd

1800

License
Granted IPP

Total

17,887

73

II: Estimated Levelized Cost of New Generation Resources (27)

O&M = operation and maintenance.

CC = combined cycle.
CCS = carbon capture and sequestration.
PV = photovoltaics.

74

III: Regional Variation in Levelized Cost of New Generation Resources (27)

O&M = operation and maintenance.

CC = combined cycle.
CCS = carbon capture and sequestration.
PV = photovoltaics.

75

IV: Per-capita energy consumed in Nigeria (23)

Year

Energy

Consumed Population

(million toe)

(million)

Per

capita

Energy
consumed
(toe/capita)

2002

18.753

122.365

0.153

2003

19.106

126.153

0.151

2004

16.267

129.927

0.125

2005

17.707

133.702

0.132

2006

12.421

140.003

0.089

2007

11.387

144.203

0.079

V: Comparative Per capita energy consumed of African countries (1)

Continent/Country

Per

capita

energy

consumption

(KWh/capita)
World average

2596

African average

563

Nigeria

136

Kenya

144

Ghana

271

Gabon

932

Egypt

1226

Libya

3336

South Africa

4848

76

VI: Wind energy Density Estimates at 25m Height (6)

Station

Mean
Monthly
wind
mean
speed at Wind
25m
Energy
Level
KWh/yr.
(ms)

Annual
Wind
Energy
KWh/yr

Annual Wind energy from a

wind Energy turbine in KWh/
yr
Diameter=10 Diameter=25
m
m

Benin
Calabar
Enugu
Ibadan
Ilorin
Jos
Kaduna
Kanu
Lagos
Lokoja
Maiduguri
Minna
Makurdi
Nguru
Oshogbo
Portharcourt
Potiskum
Sokoto
Warri
Yelwa
Yola
Zaria

2.135

27.86
13.42
93.91
49.78
14.73
192.64
188.88
102.86
52.32
31.21
101.01
12.60
53.27
173.74
12.81
49.98

2,187.81
1,053.69
7,375.75
3,909.79
1,157.06
15,129.60
9,368.1
8,078.61
4,099.78
2,451.23
7,933.61
989.60
4,183.51
13,645.19
1,006.60
3,925.48

13,673.78
6,587.53
46,097.96
24,436.19
7,230.57
94,559.98
58,355.08
50,491.28
25,6852.52
15,320.17
49,583.17
6,185.01
26,148.85
85,284.42
6,288.09
24,533.88

113.25
197.68
24.20
93.13
17.34
63.88

8,894.35
15,525.75
1,900.66
7,314.88
1,361.88
5,017.26

55,591.46
97,035.94
11,879.15
45,714.59
8,511.75
31,357.02

2.32

77

VII: Agricultural Resources and residues in Nigeria for 1992 (7)

Resources

Production
tonnes)
Industrial wood + 214,250
fuel
Wood + charcoal
Cereals
12,403
Root and tubers
41,602
Sugar cane
Cotton
276
Coconut
135
Coffee (Green)
3

(103 Residue
tonnes)
85,700
16124
16,641
358.8
175.5
3.9

(103 Gigajoules
805,580
207,540
106,502
3,097
6,387
2,246
50

78

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