Akinwole Omoboriowo II Chief Executive Officer(CEO) · Akinwole Omoboriowo II Chief Executive Officer(CEO) Genesis Electricity Limited(GEL ... Hybrid •COSTING/PRICING – MYTO vs

Akinwole Omoboriowo II Chief Executive Officer(CEO)

Genesis Electricity

Limited(GEL) Africa

Hybrid Power Solution for Large

Industrial Customers

DISCUSSION TOPICS

• Electric power availability in Nigeria

• Off-grid Power Generation defined

• Off-grid Power Generation and Grid Generation Hybrid

• COSTING/PRICING – MYTO vs off-grid supply

• Advantages of off-grid hybrid power solution

• Government policies and hybrid power solution

• Government financial support and hybrid power solution.

• Conclusion

ELECTRIC POWER AVAILABILITY IN NIGERIA

Electrical power production has increased from less than 1.8 GWh in 1971 to over 24 GWh in 2010.

80 60 40 20 0

Energy from

Combustible Waste (%)

0 20 40 60 80

SSA

India

Brazil

Egypt

World…

% Without Electricity

Source: International Energy Agency

ELECTRIC POWER AVAILABILITY IN NIGERIA Cont’d

• Electrical power production has increased from less than 1.8 GWh in 1971 to over 24 GWh in 2010.

• Hydro electric continues to play a significant role, although it has dropped from accounting for 84% of power produced in 1971 to just 27% today.


Yet, despite the growth in power production, more

than 70 million Nigerians (about 46% of the

population) are estimated to be without any electricity.

-

5.00

10.00

15.00

20.00

25.00

30.00

1971 1981 1991 2001

GW

H

Nigeria Total Electricity Consumption

Oil Sources Coal Hydroelectric Natural Gas



0 2000 4000 6000 8000

Nigeria

India

SSA

Brazil

China

South Africa

Russia

Per Capita Power Consumption At about 4,000MW of generating capacity, Nigeria’s per capita power consumption of 84kwh is one of the lowest in the world and lags behind the average for Sub-Saharan Africa.


Going by the average per capita consumption for

SSA of 4,000Kwh, power generating capacity in Nigeria should exceed 9,000MW while using the average 6,317Kwh per capita for Russia will predict 100,000MW of generating capacity for Nigeria.

The U.S is estimated to have 12,000Kwh of Per capita

consumption


10%

35%

60%

1970 1995 2010

Industry Share of Power Consumption

0% 20% 40% 60% 80%

Nigeria

World

Africa

BRIC

Industry Share of Power Consumption

Inadequate power supply has had significant impact on economy as industries use of electrical power has dropped from over 60% to less than 20%, as most industries have resorted to self generation of power.



Less than 50% of electrical energy consumption comes from public utility, implying major reliance on self generation Yet, self generated power is costing Nigerian's approximately 4x current Average Utility Tariff of N23/Kwh across Nigeria

0

5000

10000

15000

20000

25000

30000

Sources of Power In Nigeria

9

18

3

0

5

10

15

20

25

30

35

N/kwh

10x

At estimated N80/KWh, Industries pay 4x the current

tariff for power while getting 1/10th of the power they need

from public utility

Source: International Energy Agency, Proglobal estimates


0%

25%

50%

75%

100%

Sources of Power By Consumer Type

Public Electricity Oil Products Gas


Assuming 20% of energy consumed from combustible waste can be substituted with electricity, current pent-up demand for power in Nigeria will exceed 30,000MW, approximately 10x current consumption.

WHAT LED TO THIS DIRE SITUATION?

-$2,000

-$1,500

-$1,000

-$500

$0

2002 2006 2010

PHCN Cumulative Operating Loss $15

$40

$65

$90

$0

$100

$200

$300

$400

$500

1974197919841989199419992004

millions

Power Sector Investment

Investment in Power

Inflation Adjusted Oil Prices

Private, 1484, 29%

Hydro, 2206, 43%

Thermal, 1402, 28%

Government, 3608,

71%

Available Generation Capacity

Significant under investment over the last 30 years as a result of declining revenues from oil, decades of military rule and massive corruption.

Significant government presence – all discos and 71% of generation capacity are government owned – leading to inefficiencies and waste

Years of continued operational losses implied power company unable to generate capital to become financially sustainable

Source: Nigeria Ministry of Finance, fintrend.com

Source: Nigeria Bureau for Public Enterprises

Source: Africa Finance Corporation

OFF-GRID POWER: The Nigerian Example

• Captive Power generation is the generation of electricity exceeding 1MW for the purpose of consumption by the generator, and which is consumed by the generator itself, and not sold to a third party.

• Off-Grid Generation is power supply to a collection of off-takers within a defined area, such as Industrial Park or Housing Estate, via a single source

Source: Nigerian Electricity Regulatory Commission

POWER GENERATION HYBRID FOR INDUSTRIAL CONSUMERS

It is a know fact that the grid cannot sufficiently meet the electricity demand of the industrial activities in the country hence; the need for hybrid power generation. Factors necessitating hybrid power generation: • Limited Generation capacity • Limited Transmission capacity • Limited and degrading Distribution capacity • Poor maintenance of existing infrastructure.

COSTING/PRICING – MYTO vs OFF-GRID SUPPLY

27.1

24.8 25.0 25.5 26.8

0

5

10

15

20

25

30

2012 2013 2014 2015 2016

(NG

N/k

Wh

- n

om

inal

)

Generation Tariff Transmission Tariff

Distribution Tariff Transmission Losses

Distribution Losses Non-Tech Losses

5-Year Projected MYTO Average Tariff

• MYTO is expected to stay above N25 per KWH for the next 5 years.

• Compare this to the possibility of having OFF-GRID power delivered to an Industrial Zone at circa N30 per KWH.


ADVANTAGES OF OFF GRID – GRID HYBRID POWER SOLUTION

• Complete elimination of over 40% of MYTO tariffs attributable to transmission, distribution and generation inefficiencies in grid;

• Ability to control generation costs depending fuel type, efficient power plants and efficiency of operation;

ADVANTAGES OF OFF GRID – GRID HYBRID POWER SOLUTION CONT’D

• Clean and qualitative power generation for industrial application;

• Uninterrupted Electric Power availability; and

• Less pressure on existing grid infrastructure hence, freeing up capacity for other users

GOVERNMENT POLICIES AND HYBRID POWER SOLUTION

The Nigerian Electricity Regulatory Commission (NERC) is empowered to regulate Off-grid power supply through licensing.

GOVERNMENT FINANCIAL SUPPORT

FOR HYBRID POWER SOLUTION.

The Federal Government of Nigeria through the Central bank of Nigeria (CBN) has provided financial support for potential off-Grid and Grid connected Power system via the establishment of a Power Intervention Fund. This fund is constantly accessed for the establishment of Off-Grid and hybrid power system.

CONCLUSION

• Hybrid of Off-grid and Grid power supply is competitive to public utility and industrial power supply

• The EPSR Act protects Off-grid power supply

through licensing • Deployment of off-grid generation can be done

on fast-track basis (6months or less) • The Nigerian Model can be replicated across

West Africa, with modifications where relevant

QUESTIONS?

THANK YOU!

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Akinwole Omoboriowo II Chief Executive Officer(CEO) · Akinwole Omoboriowo II Chief Executive Officer(CEO) Genesis Electricity Limited(GEL ... Hybrid •COSTING/PRICING – MYTO vs