Siemens to deliver 10 mobile substations, 10 mobile transformers in 2022 lPower minister to provide technical direction lInitiative to develop over 200 projects for execution lAdditional 2,000MW delivery in 18 months at $2.3bn lAfrica Finance Corporation emerges transaction advisor lAttack on TotalEnergies’ pipeline forces shutdown of 504MW Alaoji power plant
By Udeme Akpan, Energy Editor, & Obas Esiedesa
LAGOS — The Federal Government and Siemens Energy have identified over 200 power transmission and distribution projects for execution in all parts of the nation, under the Presidential Power Initiative, PPI.
This came as the Niger Delta Power Holding Company, NDPHC Limited, yesterday disclosed it has been forced to shut down its 504 MW Alaoji Power Plant in Imo State following an attack on the gas pipeline of Total Energies EP Nigeria Limited.
The PPI is designed to increase power supply to 7,000MW by December 2022, from the current average of 5,000MW, with an additional increase to 11,000MW and 25,000MW thereafter.
The flagship project was formed between Nigeria and Germany during a visit by the German Chancellor, Angela Merkel, and her business delegation which included Joe Kaeser, Siemens’ boss, to President Muhammadu Buhari, on August 31, 2018.
The two nations had agreed to explore cooperation targeted at resolving the challenges in the power sector and expand the capacity for future power needs in Nigeria.
The project could, however, not go beyond the pre-engineering stage due to reasons, including the outbreak of the coronavirus pandemic, which scuttled its execution.
But an investigation by Vanguard, weekend, showed that the project had been reviewed and placed under the supervision of Board of FGN Power Company, chaired by the Minister of Finance, Budget and National Planning, Zainab Ahmed, with the company as the special purpose vehicle, SPV, established in August 2020 by the Buhari administration.
AFC appointed transaction advisors
Government has also appointed Africa Finance Corporation, AFC, a multilateral financial institution, created by African sovereign states to provide pragmatic solutions to Africa’s infrastructure deficit and challenging operating environment, as transaction advisors, to enhance discussions with financiers who will provide 85 per cent of the EU2.3 billion for the first phase.
The remaining 15 per cent counterpart funding is to be provided by the Federal Government.
Already, the pre-engineering contract for distribution systems were executed between FGN Power Company and Siemens in February 2021, which was completed in December, 2021.
Vanguard gathered that the Network Development Studies meant to provide the engineers working for the utility companies and the Transmission Company of Nigeria, TCN, with capacity building on power system simulation, network studies, and system planning skills will commence in the first quarter (January – March) of this year, while the simulation software has been deployed to all utilities.
It was also learned that FGN Power Company has conducted a scope validation exercise with Electricity Distribution Companies, DISCOs and TCN to align viable projects, with a view to avoiding duplication and redundancy, while ensuring that set targets are achieved in record time.
The Managing Director/CEO, FGN Power Company, Mr. Kenny Anuwe, who confirmed the development to Vanguard, said: “The FGN Power Company was incorporated in August 2020 as a special purpose vehicle by President Muhammadu Buhari to execute the PPI Mandate.
“Mr. President also appointed the executive management team to lead the process of securing the contractual and financial agreements necessary to coordinate the PPI delivery.
“FGN Power Company and Siemens Energy have made significant progress towards implementation of the PPI. The pre-engineering contract for distribution systems that were executed between FGN Power Company and Siemens in February 2021 was completed in December 2021.”
Noting that Network Development Studies had started, Anuwe said: “This is meant to provide the engineers working for the utility companies and TCN with capacity building on power system simulation, network studies, and system planning skills. FGN Power Company has already deployed the simulation software to all utilities. The training commences in Q1, 2022.
“FGN Power Company has conducted a scope validation exercise with DISCOs and TCN. This is aimed at aligning viable projects, to avoid duplication of projects and redundancy while also ensuring that the target 2GW will be unlocked from the selected projects. The scope of work has been approved by the Regulator, NERC.
“Procurement of Mobile Units (Transmission Substations and Power Transformers): The Federal Executive Council, FEC, on December 16, 2021, approved the procurement of Mobile Units (Transmission Substations and Power Transformers) for early works of Phase 1 of PPI.
‘’The contract of award for the procurement of 10 mobile transformers and 10 mobile substations was awarded to Siemens in December 2021 by FGN Power Company.
“Africa Finance Corporation was appointed transaction advisor for the PPI in December 2021. Through their support, the discussions with financiers for the PPI are now in advanced stages in tandem with commercial discussions with Siemens.
“FGN Power Company was incorporated in August 2020 and is mandated to coordinate the implementation of the PPI, with Phase 1 delivering 2,000MW in the first two years by focusing on “quick wins” measures to increase end-to-end operational capacity to 7,000MW from the current capacity of about 5GW. Phase 2 aims at expanding the capacity of the transmission and distribution system to enable evacuation up to 11,000MW, whilst Phase 3 targets power grid expansion up to 25,000MW through further expansion of generation, transmission, and distribution systems.
“The pandemic caused delays and it was necessary to set up the FGN Power Company as means to ensure the sustainability of the project, which took some time. However, the implementation arrangements are well underway and Nigerians can rest assured that from 2022, and over the next 18 months, they will be enjoying additional 2,000 Megawatts and much more thereafter.
“The PPI is a complex and large project, with over 200 projects across distribution and transmission. If anything, we are working with our stakeholders to align on requirements and to expedite the various arrangements to successfully deliver on the PPI without compromising the objectives, statutory requirements and standards expected of such a monumental initiative.
“There are some critical things that have been put in place to achieve success. First, the President has appointed African Finance Corporation, AFC, as transaction advisors for FGN Power Company. A world-class Project Management Office, PMO, management office has been constituted across multiple disciplines and agencies of government to ensure there is a clear alignment to avoid delays. ‘’Moreover, the FGN Power Company ensures engagement and alignment with key stakeholders necessary to drive the PPI forward as seamlessly as possible.
“A unique end-to-end power project like the PPI will have notable impacts across the country for consumers.
‘’The PPI will deliver incremental power to Nigerians, improve investors’ confidence, create jobs, reduce the cost of doing business and enhance economic activities in Nigeria.”
Experts told Vanguard yesterday that with this development, the problem of getting to electricity consumers power generated by the Transmission Company of Nigeria, TCN, would have been overcome.
It will be recalled that much of the less than 5,000MW currently generated by the TCN doesn’t get to consumers because of DISCOs’ inability to absorb such power.
PPI important to power delivery — Analyst
Commenting on the development, a Port Harcourt-based energy analyst, Dr. Bala Zaka, said: “The PPI is important as it aims at enhancing delivery to consumers, who have over the years been denied of supply mainly to inadequate infrastructure.
“It is our hope that the important project will be delivered on schedule to stimulate economic and other activities in the different sectors of the nation’s economy.”
Similarly, the National President, Oil and Gas Service Providers Association of Nigeria, Mazi Colman Obasi, said: “Many businesses have suffered in the country because of some factors, especially inadequate supply. Indeed, a project of this nature stands to make significant impact on Nigeria and its economy.”
Attack on gas pipeline forced shutdown of Alaoji plant — NDPHC
Meanwhile, the Niger Delta Power Holding Company, NDPHC Limited, has disclosed that it has been forced to shut down its 504 Mega Watts Alaoji Power Plant in Imo State following an attack on the gas pipeline of TotalEnergies EP Nigeria Limited.
A statement by Head, Communication & Public Relations, NDPHC, Emmanuel Ojor, in Abuja yesterday, stated that TotalEnergies declared a Force Majeure as a result of the vandalism of NOPL Line at KP41 on January 7, 2022.
Ojor explained that the oil and gas giant in a letter to the Niger Delta Power Holding Company Limited (NDPHC), stated: “NOPL pipeline was vandalized on 7th January 2022 at KP41 Alaoma Etche Cluster. The Line Block Valve at KP38 was closed to isolate the sabotage point and depressurization of the line, this will affect gas supply to Alaoji (Power Plant) until further notice.”
As a result of this development, TotalEnergies EP Nigeria Limited stated that “gas supply to Alaoji Power Plant was suspended due to this unfortunate event.
‘’Preliminary investigation to determine the extent of the damage is ongoing, and repair works shall commence as soon as feasible.”
Without gas supply NDPHC announced “the shutdown of 504MW Alaoji Power Plant on January 7, 2022”.
The company recalled that “Omotosho NIPP was shut down last month when Nigeria Gas Company, NGC, due to system wide curtailment of all gas shippers (gas producers/off takers) by Nigeria Gas Company (NGC) “to forestall the imminent collapse of the gas grid.” NGC said at the time that the Trans-Forcardos Pipeline (TFP), belonging to NGC, was breached on December 17, 2021.
“That breach led to the deferment of about 250MMscfd of gas from the Pipeline Network, a situation that brought the network pressure to abysmal levels, thereby triggering an emergency.
“The curtailment impacted operations of Niger Delta Power Holding Company, NDPHC Limited, negatively with Omotosho NIPP being shut down and gas supply to GEREGU NIPP and Ihovbor NIPP also limited, thus leading to part load or low generation from these available power plants.
“The management of NDPHC hereby assures our customers that Alaoji Power Plant and others will resume power generation as soon as gas supply is restored,” the statement added.