Historical Overview
Electricity generation in Nigeria began in 1896. The Nigeria Electricity Supply Company
(NESCO) commenced operations as an electric utility company in Nigeria in 1929 with
the construction of a hydroelectric power station at Kurra near Jos.
The Electricity Corporation of Nigeria (ECN) was established in 1951, while the first
132KV line was constructed in 1962, linking Ijora Power Station to Ibadan Power
Station.
The Niger Dams Authority (NDA) was established in 1962 with a mandate to develop the
hydropower potentials of the country. However, ECN and NDA were merged in 1972 to
form the National Electric Power Authority (NEPA). In 1998, NEPA ceased to have an
exclusive monopoly over electricity generation, transmission, distribution and sales.
Present Status of the Electricity Supply Infrastructure
The National electricity grid presently consists of nine generating stations (3 hydro and 6
thermal ) with a total installed generating capacity of 5906 MW. The details of the power
generation stations are in appendix 1.
Supply and Demand
The demand for electricity is estimated to be about 4500MW. However, the present
generation level is about 1500MW. There is about 2400 MW of self generation in the
form of small diesel and petrol generating sets. The estimated percentage of Nigerians
having access to electricity from NEPA is only 36%. The estimated demand for power in
2005 is about 9780MW. This will require a generating capacity of about 12700MW.
Thus it is necessary to fully rehabilitate the existing power stations (which will provide a
maximum of 5400MW generating capacity) rehabilitate some critical transmission and
distribution lines and their associated substations and add new generating, transmission
and distribution capacity to the grid, in the immediate and foreseeable future.
Need for Reform
The power sector is very capital intensive and government can not fund its development
as outlined above .In line with their objective the following bodies will be set up.
Nigeria Electricity Regulation Commission
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This will be an independent regulation agency for electricity in the form of a
regulatory commission. It shall have many functions inter alia:
Electricity regulator for grid connected services.
It will issue licenses to the companies operating in the Nigeria Electricity Supply
Industry.
Structure of the Electric Power Industry
The objective will be met by the introduction of competition and the appropriate
regulatory framework. The unbundling of NEPA will be into:
i.
ii.
iii.
a number of competing, privatized generation companies;
a number of privatized distribution and retail sales (marketing) companies; and
a company responsible for transmission and dispatch.
Strategy for Unbundling NEPA
A. Creation of 100% state - owned holding company and subsidiary generation and
distribution companies within it.
B. Incorporation of subsidiary companies vested with their assets and liabilities by
2002.
C. Privatizing the subsidiary companies leaving a transmission and dispatch
company plus a residual 100% state - owned holding company by 2003.
D. Development of trading arrangements among these companies which will evolve
into a bulk power market.
E. Employing the Rehabilitate, Operate and Transfer (ROT) and similar schemes as
early privatisation options, with transfers going back to the Bureau of Public
Enterprises and not NEPA;
F. Commissioning of a restructuring study to provide the details of the transition
from the current structure to the privatisation of the subsidiary companies.
Priority Actions and Opportunities in the Unbundling and Privatisation of NEPA
1. Improvement in electricity supply through the conclusion of Emergency Power
Programme (EPP) contracts;
2. Putting out to tender some of NEPA'S existing generation as Rehabilitate, Operate
and Transfer (ROT) projects;
3. Carrying out essential investments as proposed in NEPA'S Action Plan, with
agreement on essential priorities and on what is to be financed by the
Government, as opposed to what is to be financed by the new owners;
4. Contracting out NEPA'S billing and collections;
5. Repairing and upgrading the system control and communication facilities;
6. Priority strengthening of the transmission network to the able to support the new
contract markets for bulk power;
7. Developing a strategy for the equitable treatment of NEPA's employees during the
reform process, and
8. Developing a Public awareness and public relations strategy.
Negotiating Principles for IPP Contracts
There will be a need to negotiate short-term increases in generation capacity under
Emergency Power Project (EPP) agreements.Guidelines for Independent Power Projects
(IPP):
1. NEPA shall only conclude contracts, before the establishment of corporatised
transmission and distribution companies, if explicit reassignment clauses to the
future inheritor of the contract (prior to majority privatization of distribution
companies ) and to future distribution companies ( after their majority
privatization) are provided;
2. All Independent Power Projects (IPP), EPP, ROT and other large projects must be
competitively tendered;
3. Consultations and discussions on proposed regulatory framework will be made
with potential IPP partners as well as all Nigerian partners with an interest in the
reforms;
4. Government shall not provide guarantees against commercial risks
For more information on the process and timetable visit http://www.bpeng.com/
Electricity-Natural Gas inteface for Power Generation
Fuel Mix
Natural gas (and the use of currently flared and created gas) represents the major likely
fuel for the future expansion of generation. In addition, gas powered electricity
generation is the most obvious growth market for the commercial development of gas
markets and will be explored by the IPP.
Thus there will be opportunities in expanding the natural gas pipeline network, the
electricity transmission grid and the location of new generation stations.
Details of the Power Generation Stations (Appendix 1)
The Authority has nine (9) power stations, nationwide, as follows:(1) Kainji Hydro Power Station
This Station located in Niger State along the River Niger is the first Hydro Power Station
in the country. The 8 generating units were commissioned thus:
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4x80MW 1968
2x10MW 1976
2x120MW 1978
(2) Jebba Hydro Power Station
This Station is located in Kwara State down stream of the Kainji Hydro Power Station. It
has 6 units which were commissioned thus:
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6x95MW 1986
(3) Shiroro Hydro Power Station
This Station is located in Niger State on the Shiroro Gorge along the Kaduna river. It has
four generating units, which were commissioned thus:
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1x150MW 1989
3x150MW 1990
(4) Afam Thermal Power Station
This Station uses natural gas and is located in the outskirts of Port Harcourt in Rivers
State. The Station started operation in 1965. The 18 units were commissioned thus:
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2x10.5MW 1965
2x17.5MW 1965
4x23.9MW 1976
4x27MW 1978
6x75MW 1982
(5) Delta Thermal Power Station
This Station also uses natural gas and is located in Ughelli, Delta State. The Station
started operation in 1966. The 20 units were commissioned thus:
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2x36MW 1966
6x20MW 1975
6x20MW 1978
1x100MW 1989
5x100MW 1990
(6) Egbin Thermal Power Station
This Station is located in the outskirts of Lagos State. The Station is the largest Thermal
Power Station in the country. Its units were commissioned thus:
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2x220MW 1985
2x220MW 1986
2x220MW 1987
(7) Sapele Thermal Power Station
This Station is located in Ogorode, Delta State. The Station uses both steam and gas
turbines. These were commissioned thus:
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6x120MW 1978
4x75MW 1981
(8) Ijora Thermal Power Station
This Station which is located in Lagos uses AGO fuel and has 3 units which were
commissioned thus:
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3x20MW 1978
(9) Oji Thermal Power Station
This Station is located on the Oji River, Oji , in Enugu State. Though presently non –
functional, it’s the only coal- powered station in the country. Its four were commissioned
as follows:
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2x5MW 1956
2x10MW 1956