Weighty crises crushing N1trn NIPPs as 4,800mw power hangs

Former Minister of Power, Prof. Chinedu Nebo in May 2015 during an exit dinner said, ‘There is power, power everywhere but none to supply for Nigerians’.

These strong words best describe the heavy weight crises that have befallen operations of the 10 National Integrated Power Projects (NIPPs) which should have been contributing 4,800 megawatts (mw) capacity to the national grid since 2013.
The NIPPs plan came up in 2004 as an intervention to combat power shortages. Located mostly in the South and North Central regions, the Gas Turbine (GT) plants and other assets are under the management of the Niger Delta Power Holding Company Limited (NDPHC), incorporated in 2005 and jointly owned by the three tier governments.
NIPP assets: Four plants have been commissioned, while six on the queue are pending after Goodluck Jonathan handed over on May 28, 2015 to President Muhammadu Buhari.
The 434mw Geregu – Kogi plant and the 500mw Omotosho-Ondo plant were commissioned in October 2013. Two others, the 750mw Olorunsogo-Ogun plant and 504mw Alaoji-Abia Phase I plant were commissioned in March 2015, resulting in 2,188mw available capacity.
The NDPHC said the others are 90 per cent ready. These are the 563mw Calabar-Cross River plant, 508mw Ogorode-Delta plant, 508mw Ihovbor-Edo plant,  252mw Gbarain-Bayelsaý plant, 381mw Egbema-Imo plant and 381mw Omoku-Rivers plant. The NDPHC is also doing over 110 transmission projects and about 250 distribution projects that are expected to improve power efficiency in the 36 states and Abuja.
Four gas projects are being handled to ensure gas supply to the 10 NIPP plants. Recent update from the NDPHC said the Generation segment is 90 per cent complete, Transmission remains at 80 per cent; Distribution is 90 per cent while Gas assets stay at 80 percent completion level.
The 10 plants from schedules on the NDPHC website should have been ready by late 2013 and should have since been privatised and contributing a total of 4,774mw installed capacity to the grid. But the herculean task of completing the projects has been marred by weighty crises of gas supply constraints, many court injunctions blocking the transmission segments, theft and sabotage of constructed infrastructures.
While a reported Federal Government’s delegation continues its tour of the NIPP plants, it is imperative to highlight the areas of likely intervention by President Buhari if his planned overhaul of the power sector would bear any fruit.
Gas supply constraints: Gas reserves by the end of 2011 were approximately 180.5 trillion cubic feet, far surpassing the 92 billion cubit feet in oil reserve. The medium power plants have been designed to use natural gas with a high ratio of gas-to-power plants than the 20 per cent hydropower utilities in Nigeria.
Although it is no news that there is enough quantum of gas, major problems of the NIPPs have revolved around vandalism and gas pricing policy. The 10 plants would require roughly 1,295 million standard cubic feet per day (mmscufd) to operate efficiently. But it was gathered that 50 per cent of the gas flow cannot be guaranteed now even when some the plants’ gas pipelines assets are ready.
At the World Bank’s Powering Africa summit in Abuja early September, Ransome Owan, the Group Managing Director on Power for AITEO Group said the idle state of the NIPP electricity stations was due to lack of concrete gas supply terms.
He said, “Even with over $5bn invested in the NIPPs, they have remained down as gas is not there to power them. The projects cannot come to a financial close because there is not enough gas for the plants.”
Other implications of this, Owan said, is that the Nigerian Bulk Electricity Trading Plc (NBET) cannot sign the Power Purchase Agreements (PPAs) for the NIPPs, which would have completely allowed them to sell power for distribution. He said they need to have gas and ready to evacuate power before the PPAs can work.
More so, gas pricing has been an issue as many gas suppliers felt it was not competitive. The Nigerian Electricity Regulatory Commission (NERC), along with oil-related agencies, however, reviewed the gas price to $3.30, starting early this year.
Beside the move, an energy expert, Mrs Audrey Joe-Ezigbo, Executive Director, Falcon Petroleum said government should harmonise regulations and agencies for gas pricing and supply.
Transmission – Encroachments and assets’ vandalism: The NDPHC Executive Director on Networks, Dr. Albert Okorogu, after an assessment tour in June disclosed there were encroachments on transmission facilities across Imo, Enugu, Abia, Akwa-Ibom and Cross River states, which have hindered the delivery of power from 563mw Calabar power and 330mw Egbema plants.
Okorogu said, “These powers are stocked in our generation plants with people frustrating its evacuation and distribution to the nation.”
On encroachments, the NDPHC Head, Environment, Mr. Ben Iruoha noted, “To allow construction of transmission lines, we had to create a corridor of Right of Way (RoW) to build the two level transmission lines of 330KV and 132KV voltage levels with 50 metres and 30 metres space requiring the acquisition of land and due payment of compensation, but some people has obtained court injunctions that stopped our works as they demand another compensation round.
“These encroachments and court injunctions have delayed transmission of electricity supply from the 330mw Egbema NIPP, Afam Power in Port Harcourt and 563mw Calabar plant in Odukpani,” Iruoha said.
The NDPHC Managing Director, Mr James Olotu recently wrote to the Inspector-General of Police seeking for interventions and protection of its threatened assets.
Olotu listed the criminal acts in Abia State alone to include vandalism of national assets of the 330KVA Alaoji-Calabar line in the Ugwunagbo Local government area on May 28 and stealing of 10 drums of transmission conductors weighing over 40 tonnes and valued at N45m at Umuahia in May.
Legal constraints – Many court injunctions stall site works Dr Okorogu said most of the transmission lines should have been completed since two years before the power plants should be ready for firing but it has taken over four years. The implication is that the plants are ready but cannot transmit power.
He appealed for accelerated adjudication and the stoppage of acts of sabotage saying, “We have a lot of stranded power in the completed stations but we need to evacuate them to the grid through the transmission stations.”
Most residents who spoke on the issue said they were not duly compensated, and that had triggered the erection of new structures along the lines. One of them who said he knows the builders, Mr. Onwe Godwin in Amoji village, Nenwe community in Enugu state said some persons were not captured in the compensation in his village.
NDPHC officials, however, refuted the claims, saying that all affected persons have been duly compensated. “All parties are present, including the Police and SSS. Papers were given and pictures taken,” Iruoha maintained.
Officials also lamented the erection of structures at a vast Federal Ministry of Agriculture silos premises ýdirectly under double circuit transmission lines at Obonarie Okigwe along Umuahia road in Abia state. The silos were built with the people clearly ignoring the dangers the electricity lines posed.
Delay in transaction process: The privatisation transaction of the 10 NIPPs is currently stalled since there is no adequate gas for full commercial operation. The NDPHC has shifted the transaction completion to January 2016 when it hopes it would have solved these bottlenecks. The three tier governments are expected to get over $5.73bn (about N1.14tn), which would be ploughed in for the Phase II hydro-power projects, with concentration in northern Nigeria.
NIPPs’ current assets are valued at $11bn (about N2.189tn). The 10 plants are valued at $7.1bn (N1.412tn), gas assets at $0.5bn (N99.5bn), transmission assets at $2bn (N398bn) and the Distribution assets at $1.5bn (N298.5bn), NDPHC record showed.
The federal government, after its ongoing tour, would need to swing into action fast to immediately tackle the many constraints hampering these 4,800mw intervention projects.


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