Five Year Generation Investment Plans Puts Hydro Plants at Capacities seen 30+ years ago.

In October 2013, Kainji PLC & Shiroro PLC formerly part of GENCO was sold to Mainstream Energy Solutions a consortium that comprises of seven corporate entities from across various sectors of Nigeria. This was part of an effort to complete the privatization of the generation companies formerly held by the Power Holding Company of Nigeria (PHCN). Kainji PLC consists of two hydro plants namely Kainji Hydro and Jebb Hydro located in the Kainji and Jebba regions of Northern Nigeria.

The initial installed generation capacities of both the Kainji and Jebba hydro plants are 760MW and 578MW respectively. This is a combined total of about 1338MW (1.3GW).  However, as of today, Kainji and Jebba hydroelectric plants have an operating generation capacity of only 110MW and 450MW respectively which translates to a combined total operating capacity of about 560MW. Today, Kainji and Jebba plants operate at only 14% and 78% of their initial respective installed capacities. This works out to a total operating generation capacity that is approximately 42% of the combined initial installed capacity of these plants.

In an article released in the Punch [Dayo Oketola, November 21, 2103] titled “Mainstream increases Jebba Plant’s Capacity to 450MW”, Mainstream stated that the agreed mandate in the concession agreement is that within five (5) years, the company would recover the lost capacities of both the Kainji and Jebba power plants.  This total combined installed capacity in the referenced article above was stated to be 1500MW but from my analysis above it is actually 1338MW. The approximately 200MW difference could be from additional 200MW unutilized design capacity at the Kainji Hydro plant. This plant was designed for a total of 12 turbines which translates to a total installed capacity of 960MW. However, only 8 turbines were installed at the Kainji plant translating to an initial installed generation capacity of 760MW at this plant.

If this strategy to recover the lost capacity at these plants is successful, this would put us back to the generation capacity of 1963 when the Kainji plant was installed and 1984 when the Jebba plant was added to the power system. Mainstream’s strategy which has been agreed with our leaders would take us 5 years to fully execute and implement but will only get these major hydro plants to the installed generation capacities seen 30+ years ago. It should be noted that there could also be additional 200MW supply if unused available design capacity at the Kainji plant is utilized within the next 5 years.

I applaud Mainstream for their investment in the acquired asset. This was expected and is a true measure of the value of privatization in the generation sector. Hydroelectric assets require no fossil fuels and this drastically reduces the cost of operating these plants. The faster Mainstream energy invests in maximizing the generation output from both Kainji and Jebba hydro plants, the faster they can generate revenues to recover their cost of acquisition and investments. What bothers me as a Nigerian is that we have to wait 5 years to have generation capacities similar to what was present at these plants over 30 years ago.

Nigeria is in this position today because of huge unnecessary neglect by our leaders in the power sector over many years. This neglect is part of the reason we have become a nation that runs predominantly on diesel generators. This neglect has cost Nigerians to lose billions of dollars of potential revenue/GDP from foreign and local investments. This neglect has stunted our growth across multiple sectors. How did Nigerians let this happen? Why do we have to wait for 5 years to enjoy the availability of the generation capacity and clean energy that was supplied from these hydro plants over 30 years ago? How did Nigerians let this get to such an embarrassing state? How can a country estimated to have requirements of over 100GW of supply based on its population have just under 5GW? How can we fix it? When will we fix this? Nigerians, let us work together and fix this!

From the analysis above, it takes no genius to know that we are not going to achieve anywhere close to 40GW in 2020 at the pace we are moving. There have been no announcement for any mega power projects similar in magnitude to the ones discussed in this article that will be required to meet the 40GW target for 2020. It should also be clear that even the 10,000MW planned for 2014 is also far from our reach given the limitation on the transmission network and generation supply.