Interview

April 13, 2024

How to generate affordable electricity for poor Nigerians — Mohammed Mijindadi   

How to generate affordable electricity for poor Nigerians — Mohammed Mijindadi   

Mohammed Mijindadi   

Mohammed Mijindadi is the President of GE Vernova Nigeria & Managing Director, Anglo-West & Francophone Africa for GE Vernova’s Gas Power New Unit business. Recently, GE Vernova organised a dialogue session with stakeholders in Nigeria’s power sector. In this interview with Sebastine Obasi, he discusses the opportunities and challenges in the sector.

Excerpt:

Nigeria and the power sector are excited about the commissioning of Geometric power. GE has had interventions, but why is it that even the federal government is excited and we’re celebrating it?

We’ve walked the talk in Nigeria, and I say that, not to boost our ego, but we have been a tried and trusted partner of Nigeria. So, why the excitement? Aba is the capital of the industrialization in Nigeria. Regardless of what anyone says about power, if you’re unable to incentivize and drive industrialization, as a mission we’re not going anywhere.

Prof Barth Nnaji’s project is at the heart of what we think will inspire a lot of other industries to move forward. Imagine what 24 hours of light will do to the people in Aba. Today, they barely have electricity, yet all of the industries in cars, clothing, basic manufacturing, everything, that is where the heartbeat is. Prof’s project single-handedly can start the revolutionization of the industrial space, and that’s why we are really happy. We worked with Prof for over 10 years on that project. Not too many people will know. We not only brought equipment, we’ve provided technical support and services. We have tried to link in with other financiers to move the project forward.

We’re very proud of Prof’s project but Prof is one. Almost everybody in that room has a story and that is what I was telling you about this journey. We’re celebrating Prof today because Prof has got to a destination. There are so many places and so many projects that are like that. Now imagine if every year we have two, three of this. We will be able to move this country forward. That’s what the excitement is about. That’s why we’re here. That’s why we’re happy to be involved in this.

Is GE Vernova looking at establishing an assembly plant in Nigeria now that a company like Geometric has become operational to encourage efficiency and reduce cost of maintenance?

Yes, it’s not something that we are not willing to do, we’ve been on several journeys around establishing a local assembly plant. We tried something in Calabar, the free trade zone. Based on the way the economy was going, we had to step back.

So, it’s a conversation based on how the business is growing. We’ll make that decision to see what is in the best interest of the company at that time. But right now, we’re really focused on supporting our customers to get them what they need to solve this energy dilemma.

The grid system that we are using in Nigeria today is one of the causes of the problems we have and some experts are talking about micro-grids. So, how do you boost this by the time we begin to implement the 2023 Electricity Act?

Optimizing the grid doesn’t necessarily mean focus on one and neglect the other. I think what the Electricity Act is pushing, which I think is actually a good idea, is trying to allow the states to have a say in creating better efficiencies. When we think about optimizing the grid, it could be at the federal level, it could be at the state level.

I think it’s also important to note that we’re working very closely with the West African Power Pool. Part of the optimization of the grid is to allow the free trade of electricity across borders. So, if things are difficult on one side, you can rely on your fellow partners. We’re working on a project with the West African Power which is on the interconnectivity centre.

And it’s a very big way of making all our neighbours that basically share borders, share electricity. My idea of optimization is not necessarily just looking at it at the federal grid level, but it’s making sure that you are able to move out and wheel as much power as you have available on the system.

How can we generate and distribute affordable, cheap electricity for the poor people in Nigeria?

I think you’re touching on the emotional side of this conversation. Yes. And it’s important. I think we all, as a people, need to get very angry. We need to get angry enough to be able to see the change that we are looking for.

One of the panelists, Billy Jim, talked about how 10 years ago while he was an advisor to the government, half the conversations we were having then, are the same conversations we are having today. And he says his fear is that 10 years from now his children will be having the same conversation. I think the major problem is around this affordability of power. We must be honest with ourselves as Nigerians, a lot of the frustration that drives this price is man-made.

We need very strong policies that ensure that we’re not over padding the way projects should be. I don’t think equipment is unnecessarily priced. It’s the same pricing around the world. I think people today are paying even higher for self-generation. But what we are suffering from is the bureaucracy in the system where across the value chain, everybody is padding and padding that by the time it gets to me and you, it gets very frustrating.

We have regulations, and we have policies in place and if everybody does what it is that they need to do, I think a lot of these things can be sorted out. This is my honest opinion.

Are you also looking at green hydrogen project in Nigeria?

Yes, as it is today, we have two technologies in Nigeria that are hydrogen ready. When we say hydrogen ready, it means that as of today, you can burn a mixture of hydrogen and natural gas on those turbines. The goal that we’re working on, even globally, is that by the time we get to 2060 of net zero, our turbines should be able to burn 100 per cent hydrogen.

We will obviously be able to get to that target before then, but different people get to different things at different times. In Africa, as much as 100 per cent hydrogen burning is what everyone is looking at globally but that’s not the immediate need. Our immediate need is to create an environment where we have energy security. We own gas which is one of the biggest natural resources. So, what we’re doing as GE Vernova is supporting the government to responsibly get to that finish line.

We don’t need to leapfrog because everybody else is leapfrogging. We need to be responsible in utilizing the natural resources that we have and gradually tapering it to where we feel the globe is going. So, our turbines are hydrogen ready. Before the year 2060, we have turbines that will be a complete 100 per cent hydrogen and the company is investing a lot. We invest as a company a billion dollars every year on research and development globally.

A lot of conversation is going on around green economy and infrastructure development. What role can GE Vernova play in this?

I think it depends on the way you look at it, and the way we look at the green economy is really as sustainable development. As a company, we’re very well positioned for sustainable development. Most of our business is focused on gas, on hydro, which is a renewable source, and we feel the development in that space plays very well and our equipment plays very well in that space.

So, as regards the green economy, we feel there is a vehicle as an OEM, (Original Equipment Manufacturer), supporting most of our partners and partnering nations in achieving their goals towards this sustainability.

GE Vernova’s intervention is more towards thermal-powered stations. There is also shortage of gas supply to generation power plants and the issue of pricing. How do you think the federal government can address some of these challenges?

I’ll start first by correcting your notion. I don’t think a lot of our focus is in thermal space. We’re very active in the hydro renewable space, we’re active in wind, we’re active in the electrification space. So, we’re active across many places. I think there’s a sweet spot in generation in Nigeria today because we have assets that power about 65 per cent. I think there should be focus in the investment to drive it forward.

Everybody understands the importance of gas, it’s just like crude oil. The government should focus on gas the way it focused in crude oil in Nigeria, with regards to deliberate attempts to push investment and attract investors, because everybody understands how to monetize crude oil. Today, sometimes we even flare gas at the expense of crude oil. I think there needs to be a deliberate attempt in trying to commercialize gas. That will drive the availability.

It will drive down the competitiveness with regards to pricing, because this gas is not just only used domestically, everybody around the world is using gas. When you have investors that are less incentivized to push gas domestically, a lot of this gas is going outside. LNG is about to launch Train 8. Half of what they’re doing is thinking about externally, where they can send it to because the market dynamics doesn’t incentivize them to really push things domestically.

So I think there’s a lot of work on the government and maybe the private sector but somehow on the government to manage policies and push a lot of investments because it is a huge capital investment. The government has a responsibility to show some goodwill. Private sector will jump, but there needs to be concerted efforts to develop the sector.

In terms of investment and presence in Nigeria, what do we expect of GE in the next 10 years for example?

We’ve been present in different phases over time. When we started here almost 100 years ago it was more of a brief case company where people were bringing products. In recent times we’ve had a presence. At some point, we were almost 1,000 employees. My hope is that Nigeria becomes or continues to be the most relevant market for us in the Sub-Saharan African region.

As it is right now, Nigeria is the house of the largest GE turbine capacity that we have across Sub-Saharan Africa on the thermal side, and I hope we continue to do that. My hope down the line is that we see a power market that continues to incentivize companies like GE and GE Vernova to invest in having larger presence and localization of maybe some aspects that allows our businesses to continue to thrive. But it’s a journey that we’re all going to ride together and it is my hope that we eventually get there together as the industry progresses.

What motivated GE to put this dialogue together?

We’re getting ready to introduce GE Vernova starting April 2nd. GE Vernova is all our power portfolios coming together as one stand alone company that will be publicly traded in the stock exchange. So, what we have been trying to do was how do we get all our customers together, reinvigorate the spirit of partnership, remind them of why we started this journey in the first place and look towards possible collaborations that will allow us into the future of where we’re going as GE Vernova.

Also, there’s been a lot of conversation around energy transition. GE is a voice and trusted partner in this space, and we’ve been working in Nigeria for a very long time. So, we thought an event like this would allow us to get together with friends and partners and to remind ourselves of our objective of trying to improve energy access availability to citizens of Nigeria and find ways that we can creatively continue to partner.

During the panel discussions, many speakers talked about challenges and opportunities, but in your own view at GE, how do we move forward?GE is not immune to these challenges and opportunities. Apart from being an equipment manufacturer, we’ve invested in projects, we have partnerships in these projects. So, we are part of these challenges and opportunities.

The perfect way we will be able to move forward in the industry is where we have the right level of enabling environment and the perfect partnership between the government and private sectors. We are not going to solve the crisis in the energy industry with this dialogue, it is just to bring some of these topical issues to the top of minds.

There are still conversations that are going on but we need to keep the dialogue alive. It is very important to have partnership, an enabling environment and the spirit of understanding how we can use our natural resources, which is gas, to ensure that we continue to have a say in the energy transition story. We keep looking at creative ways to solve problems and as GE, there are some specific things that we’ve looked at specifically in the transition story.

So, while different people are looking at it as 100 per cent net zero, we’re working with the government to think about more creative ways that we can go through a meaningful just transition. So, part of the immediate thing we’re trying to do is work with our customers to see how we can convert a lot of the simple cycle power plants that we have today into combined cycles. Because one of the most important things for us if we think about transition is how do we reduce negative gas emissions. A lot of the power that’s generated in Nigeria today is from diesel and dirty fuel. The more we’re able to get cleaner fuel on the grid, the more it will reduce that.

So, part of what we’re doing is optimizing the grid through our electrification business and grid, trying to make more efficient power, trying to do a bit of this combination of conversions to combine cycle, and then down the line bring a few of the technologies that we’re working with globally around burning hydrogen, looking at carbon capture, utilization and storage.

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