A Critical Study on the Prospect and Challenges of Effective Power Generation and Distribution in Nigeria

A Critical Study on the Prospect and Challenges of Effective Power Generation and Distribution in Nigeria (A Case Study of Ibom Power Plant Ikot Abasi)

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

Electricity generation constitute the generation of electric power from sources of primary energy. For electric utilities in the electric power industry, it is the first stage in the delivery of electricity to end users, the other stages being transmission, distribution, energy storage and recovery, using the pumped-storage method. A characteristic of electricity is that it is not a primary energy freely present in nature in remarkable amounts and it must be produced. Production is carried out in power stations (also called power plants). Electricity is most often generated at a power plant by electromechanical generators, primarily driven by heat engines fueled by combustion or nuclear fission but also by other means such as the kinetic energy of flowing water and wind. Other energy sources include solar photovoltaic and geothermal power. The Nigerian electrical power sector remains in need of significant investment as its utility-scale electricity generation capacity continues to fall short of meeting domestic demands. Currently, Nigeria has an installed electricity generation capacity for supply to the national grid of 12,522MW3, with available capacity of only approximately 4,500 MW4, to meet the needs of Nigeria’s population of more than 170 million and a country with a GDP growth rate of 7%5. In comparison, South Africa has an installed electricity generation capacity for supply to the national grid of approximately 50,000 MW with a population of only about one-third the size of Nigeria’s6. At the end of January 2016, the demand for electricity in Nigeria was estimated to be 12,800 MW7. The historic gap between the demand for power in Nigeria and the electricity available from the grid has led to widespread self-generation of power in the commercial, industrial and residential sectors; many individuals and businesses own their generators to compensate for lack of access to and supply of energy. Businesses’ reliance on self-generation via diesel-powered generators has resulted in not only environmental impacts that using cleaner fuels could reduce, but also in an increase of the price of goods and services. This is because, typically, self-generation accounts for a significant portion of most businesses’ recurrent expenditure; such significant overhead costs are clearly being passed onto consumers. The historically low level of investment in Nigeria’s power sector has been a significant barrier to private investment in the country. The National Electric Power Policy (2001) and the Electric Power Sector Reform Act, 2005 (the 2005 Reform Act) constitute the framework under which fundamental reforms to the power sector in Nigeria were enacted over a decade ago. The study seeks to proffer a critical study on the prospect and challenges of effective power generation and distribution in Nigeria. A case study of Ibom Power Plant Ikot Abasi.

1.2 STATEMENT OF THE PROBLEM

In Nigeria, the average annual per capita power consumption, only 155 kWh, is among the lowest in the world12. In 2015, much of Nigeria’s installed capacity was unavailable. Nigeria’s estimated available capacity from the grid of approximately 4,500 MW meets only approximately one-third of the estimated current demand for power from the grid. According to the Chairman of the Nigeria National Committee of the World Energy Council, planning experts estimate that for the Nigerian economy to grow at a rate of 10%, the country’s electricity requirement must reach 30,000 MW by 2020, and 78,000 MW by 203014. To therefore improve the economy’s current GDP growth and reduce the current electricity supply gap, market intervention and fundamental power sector reform are vital. The problem confronting the study is to proffer a critical study on the prospect and challenges of effective power generation and distribution in Nigeria. A case study of Ibom Power Plant Ikot Abasi.

1.3 OBJECTIVES OF THE STUDY

The Main Objective of the study is to proffer a critical study on the prospect and challenges of effective power generation and distribution in Nigeria. A case study of Ibom Power Plant Ikot Abasi. The specific objectives consist of the following:

i. To determine how effective power generation and distribution is in Nigeria.

ii. To understand the prospects of power generation and distribution in Nigeria.

iii. To examine the challenges power generation and distribution in Nigeria.

1.4 RESEARCH QUESTIONS

i. How effective is power generation and distribution in Nigeria?

ii. What are the prospects of power generation and distribution in Nigeria?

iii. What are the challenges of power generation and distribution in Nigeria?

1.5 STATEMENT OF THE HYPOTHESIS

Ho1: There is no significant effective power generation and distribution in Nigeria.

1.6 SIGNIFICANCE OF THE STUDY

The study proffers a critical study on the prospect and challenges of effective power generation and distribution in Nigeria. A case study of Ibom Power Plant Ikot Abasi.

1.7 LIMITATION OF THE STUDY

The study was confronted with logistics and geographical factors.

1.9 DEFINITION OF TERMS

INSTALLED CAPACITY DEFINED

Installed capacity is the production capacity of a power plant based on its rated (technically achievable or nameplate) capacity.

AVAILABLE CAPACITY DEFINED

Available capacity is the amount of electricity actually produced (practically determined) by a power station and made available for distribution. For example, a plant may have an installed capacity of 1000 MW, but due to fault equipment or shortage of labor, the plant may be able to produce an available capacity of only 200 MW.

NIGERIAN ELECTRICITY MANAGEMENT SERVICES AUTHORITY DEFINED

Nigerian Electricity Management Services Authority Enforce technical standards and regulations, technical inspection, testing and certification of electrical installations, electricity meters and instruments.

NATIONAL POWER TRAINING INSTITUTE DEFINED

National Power Training Institute of Nigeria Provide training for power sector personnel and coordinate training activities in the sector.

NATIONAL ELECTRICITY REGULATORY COMMISSION DEFINED

Promote power sector efficiency and improve access to electricity services. NERC issues licenses for on- and off-grid generation of power, as well as for distribution of electricity to end users. NERC manages price regulation.