Nigeria Needs More Energy Service Operators; as Expert urged caution on Power Reform

A cross-section of participants at the Energy Service Workshop organised by the Nigerian Society of Engineers (NSE) Victoria Island Branch.

Energy Service is a big business that Nigerians should collaborate and thrive, so says Engr. Austyne DURU at the Energy Service workshop held on Saturday, 29 February, 2020.

The programme took place in the School of Engineering training room at the National Engineering Center Annex, Victoria Island, Lagos State, Nigeria. It was organised by MODULUS Resource Provision Limited in partnership and on behalf of the Nigerian Society of Engineers (NSE) Victoria Island Branch under the leadership of Engr John Audu.

In his presentation, Engr. Austyne DURU, an advocate of clean & affordable energy goal of UN’s SDG #7, emphasized his usual rhetoric that Energy Service is Big Business that can be implemented as add-on units or blocks. Anyone can operate an Energy Service by leveraging on existing Regulations like Mini-Grid Permit, Embedded Generation Licence, and Integrated Electricity Distribution Network (IEDN) Licence. There are also operations that don’t require any licence especially where the Electric Power capacity is less than 100kW which represents the peak power requirement of 100 homes in a typical rural area.

Engr. DURU advised that Government should thread softly while reviewing the Electric Power Sector Reform (ESPR) Act, ensuing regulations & orders, and the recent call for Restructuring of the Nigerian Electricity Supply Industry (NESI). An exercise built on sentiments could destroy the entire Power Sector with its attendant Cobra Effect – a situation where a perceived solution creates more problem.

Participants agreed that the industry requires massive investment and that all eleven (11) DisCos should liberalise their operation to allow for significant businesses for interested stakeholders. A further recommendation was that NERC should abolish the requirement of Tripartite Agreement which the DisCos have hitherto used to deny entry of investors in their distribution service areas.

While discussing the technology options available to Energy Service investors, the facilitator highlighted specific primary source of energy that is abundant in different climatic/geographic areas of Nigeria. Renewable Energy solutions like solar can be implemented anywhere in Nigeria since every structure becomes a potential energy source during the day. Although wind technology requires a cut-in wind speed of 10m/s to turn a typical 5MW turbine, smaller Vertical axis wind turbines (VAWT) can run at cut-in wind speed of 4m/s which is attainable in the windy North and coastal shores of Nigeria. Gas abundance in the Niger Delta means that many more Gas to Power projects are required down South.

Government must raise the penalty for flaring gas to an amount that is higher than deploying/operating a GtP turbine. In urban areas, conversion of waste to power should be explored. The United Nations encourages sustainable development including sustainable primary energy sources as defined in her SDG #7, and it is true that clean energy is cheaper in the long run even if the initial setup cost or capital requirement might be higher than traditional fossil-based sources.

“Government must raise the penalty for flaring gas to an amount that is higher than deploying/operating a GtP turbine”- Austyne Duru.

In concluding the workshop, the facilitator shared six (6) business cases which shows that Energy Service businesses break even after 5 years even when earning is based on the Multi Year Tariff Order 2015 and its minor review in 2020. There are more than 10,000 small unserved communities and under-served estates in Nigeria where the hunger for reliable energy service is in demand. The market is indeed a blue ocean for investors, and the time is now.

Nigeria Needs More Energy Service Operators; as Expert urged caution on Power Reform
Expert Highlights the On-going NERC Public Hearing on Major MYTO (Energy Tariff .)
Nigeria Needs More Energy Service Operators; as Expert urged caution on Power Reform
Participants at the Energy Service Workshop

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