Nigeria Needs Coal-Fired Generation: Minister

Nigeria’s power minister Babatunde Fashola has said that coal should form a large part of the country's future electricity mix, because gas alone cannot tackle the decline in power generation.

"I am pleased to say that the Nigerian Bulk Electricity Trading (NBET) is working on a suitable tariff for coal-to-power that will form the basis of a Power Purchase Agreement (PPA),” he told the 2016 Annual Conference of the National Association of Energy Correspondents in Lagos state, August 18.

Chinedu Ugbo, acting chairman of Niger Delta Power Holding Company (NDPHC), told the same event: "Gas is our most reliable source of power, yes, but it is only one solution among many other under-utilised solutions.”

Nigeria has no coal-fired power plants and negligible coal production, according to recent data, but does have coal reserves in the Kogi, Benue and Enugu states of central Nigeria. The country’s solid minerals minister Kayode Fayemi said in March that coal is expected to generate 1,000 MW of power by 2020 to supplement other fuels currently used in power generation. At least two projects have been proposed in Enugu state by Nigerian and Chinese investors of 500-1000 MW in size, both of which would require locally-mined coal.

The reasons why government is looking to bolster and diversify the country’s power mix are evident. Security analysts in June said that foreign investors in new gas-fired power plants in Nigeria, the largest gas market in sub-Saharan Africa, are being deterred by the militant attacks; it means that official 2015 forecasts of Nigerian gas consumption reaching 103bn m³ in 2020, from some 21bn m³ in 2014, look unlikely to be achieved. 

A month ago Fashola himself said 23 gas pipelines across the Niger Delta had been destroyed by militants in the five months since February 2016. Last week, following pipeline damage, Shell declared force majeure on the bulk of its feed gas supplies to Nigeria LNG, the country’s principal gas exporter. And the US Energy Information Adminstration said August 18 that shut-in crude oil reached 750,000 b/d in May 2016, its highest in over seven years.

Nigeria's minister of power Babatunde Fashola (Photo credit: Fashola/LinkedIn)

Fashola said August 18 that the Mambila hydro-electric plant in Taraba state in eastern Nigeria is likely to be the defining option for incremental power, as it will add 3,000 MW to the national grid.

"People may not see it now, but it is at the point of negotiating tariff with power providers that government through NBET and NERC begins to protect the interest of consumers," he said.

He also said the ministry of power recently signed 14 PPAs for the delivery of 1,125 MW of solar power: “Our renewable energy projects such as the 10MW wind plant in Katsina are also in various stages of completion.” Fashola was Lagos state governor from 2007 to 2015 when he was appointed power minister by President Muhammadu Buhari.

Omono Okonkwo