FEDERAL Government has moved to diversify its source of power generation in the country to shore up capacity and expand feed stock to the existing power plants in the country.
Dr. Lanre Babalola, Minister of Power made the disclosure while speaking with select journalists in Lagos recently, adding that government had to make the move in view of the growing power supply needs of the citizenry.
The minister explained that some of the existing power plants will now be configured to run on either Liquefied Petroleum gas (LPG) or Synthetic Natural Gas (SNG) instead of relying solely on natural gas that can only be supplied through pipelines.
He added that to run these plants on Low Pour Fuel (LPFO) is highly cost inefficient considering the low tariff rate in the country.
He said that power plants like Omotosho, Papalanto, Geregu will be listed in this conversion strategy so that government can overcome the current state of idle of the plants in the absence of natural gas.
The introduction of this other sources of feedstock he said will bring flexibility in the entire system such that PHCN or the power generation companies will not be helpless in a situation of pipeline vandalism.
Dr. Babalola said right now Power Holding Company of Nigeria (PHCN) is charging N6 per kilowatt while actual cost of generation per same level is N12.
The Power Minister also hinted that government in addition to exploring all mini hydro power stations across the country to increase output and localize supply chain will next year embark on the construction of a coal fired power plant in the east with a 200MW start up capacity.
â€œAt least about five states including Enugu, Kogi, Nasarawa, Gombe Benue are well endowed with coal and we can effectively run 200MW to 300MW coal plant in each of these states,â€ he said.
The Minister said there are idle plants now in the system because there is no gas to run them.
â€œThe machines are there, we have over 4000MW available machines but I am constrained by gas supply,â€ he said.
He also disclosed that a standard power purchase agreement frame work is being worked out in line with international standard agreements for all stakeholders coming into power business in Nigeria.
Babalola also hinted that a standard gas supply agreement frame work for power and gas producers is near completion stressing that all of these policy framework are essential to bring in investors as well as boost accessibility to external fund to enhance private sector participation in the power sector.
â€œReform is not just about existing structure but policy issues and framework that will stand the test of time and enhance private sector’s confidence to bring their money into the power sector,â€ he said.