19 Thermal Plants Shut Down as Militants Knockout Pipelines - EazyFeeds

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Friday, 3 June 2016

19 Thermal Plants Shut Down as Militants Knockout Pipelines

Nineteen thermal plants in Nigeria have been shut down after militants knocked out the Forcados export pipeline last February, and the Escravos- Lagos link early May, leaving the country to depend on only four gas-powered generators.

This, according to Bloomberg yesterday, signalled a looming nationwide blackout if nothing is done to address the renewed attacks on gas installations. “All but four of the country’s 23 gas-powered generators have been shut down,” the news agency reported.

Quoting the Chief Executive Officer of Egbin power plant, Dallas Peavey Jr., Bloomberg reported that the shortage of gas supply is a big threat to the plant’s plan to double power generation.

Egbin is Nigeria’s largest power facility whose output has fallen to less than 10 per cent of its 1,320-megawatt capacity. “For all the plants, there’s no gas,” Peavey said, adding, “We’re sitting idle here.” Until the violence ends and the gas supplies resume, Peavey has shelved plans to double Egbin’s output. “We can’t double the capacity if we can’t find the fuel,” he said.

Meanwhile, the Minister of State for Petroleum, Dr. Ibe Kachikwu told reporters yesterday in Vienna that the Forcados pipeline will reopen in July. Spokesman for Royal Dutch Shell Plc., Precious Okolobo, had earlier said that repairs were continuing on Forcados. Government officials say Escravos may not open until September, according to Peavey. “When people break the gas line it’s like breaking the diesel tank or your petrol tank that supplies your generator at home and that’s why the power situation is currently this bad,” Babatunde Fashola, the Minister of Power, Works and Housing, said in a statement on May 21.

“As soon as we restore those gas pipelines, power will improve.” Stating that electricity generation is down to a fifth of this year’s peak, the Bloomberg reported that Nigerians might have to get used to living in the dark. “Unless President Muhammadu Buhari, 73, can subdue armed militants attacking gas facilities that supply the nation’s power plants, his plans to remedy an electricity shortage he called a “national shame” in his inauguration speech a year ago will be stillborn. “In March, Buhari said he would increase power generation by 2,000 megawatts this year and raise it by 2019 to 10,000 megawatts, double this year’s peak in early February.

“Then militants in the oil-rich Niger Delta started repeatedly blowing up gas pipelines, lowering electricity output to 1,000 megawatts on May 23. The scarcity has battered an economy already in crisis because of falling prices for its main export, oil, threatening a recession.

As it is, Africa’s largest economy currently generates about a 30% of South Africa’s electricity production, for a population more than three times its size,” the report stated.

With Africa’s biggest gas reserves of more than 180 trillion cubic feet, gas-generated power was touted as the obvious solution by a succession of governments to end daily blackouts that cost the economy at least 2 per cent of gross domestic product (GDP) growth annually, according to the Ministry of Finance. Gas-fired power plants provide about 80 per cent of Nigeria’s electricity supply, according to Pabina Yinkere, head of research at Lagos-based Vetiva Capital Management Ltd.

“With current power output the lowest in a decade, millions of Nigerians either do without electricity or are forced to buy fuel for their own generators. Even when output reached its 5,000-megawatt peak, most of the country was in darkness,” Yinkere said. “Nigeria’s electricity consumption per capita is 142 kilowatt hours compared to 4,328 KWH in South Africa,” he added.

The partial sale of 17 former state-owned power utilities three years ago was meant to attract investment needed to expand the grid. Yet, private investors have been hampered by increasing debt owed by government, an inability to obtain foreign exchange to import equipment and, now, militants’ attack on key installations.

“If the vandalism is not addressed urgently and comprehensively, electricity will continue to deteriorate and the government’s aspiration to significantly increase power generation by 2019 would be a mirage,” Desmond Ogba, managing counsel and head of energy projects at Lagos-based law firm, Templars, said in a phone interview.

Militants in the delta say they are fighting for a greater share of the region’s oil resources and to protest poverty, unemployment and environmental pollution from decades of hydrocarbon exploration and production. While authorities have stepped up security in the area, Kachikwu said talks with militants’ representatives began a few days ago. “We’re going to get it to be more inclusive,” he said. “We’ll talk with those who are aggrieved, we’ll talk to our brothers who feel pain and are unhappy.”

“There are no quick fixes to the challenges,” Yinkere said. “The only way out I see is for the government to negotiate with the militants. The government needs to dialogue. Using force will not bring a solution to the challenge.”

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