Outline. 1. Concept of Embedded Generation 2. Nigerian Power Sector Outlook 3. Potential 4. Challenges

Transcription

1 Outline 1. Concept of Embedded Generation 2. Nigerian Power Sector Outlook 3. Potential 4. Challenges 1

2 The Concept of Embedded Generation (EG) 2

3 Industry Definition of EG Also known as: q Distributed Generation q Onsite Generation q Dispersed Generation q Decentralised Generation q Decentralised Energy Embedded Generation basically is power generated on a smaller scale, not centrally dispatched via the grid and directly connected to a distribution network or customer loads. 3

4 Industry Definition of EG Country Australia France Germany Greece India Netherlands United Kingdom Definition Connected to the distribution network (up to 132 KV) which is capable of supplying customer load directly Connected to the distribution network, capable of supplying customer loads directly Used mainly for sun, wind and small hydro projects Connected to the distribution system not centrally planned or dispatched New renewable energy sources (up to 11KV) Owned by utilities, industry or a combination (up to 150KV) Connected to a distribution system (up to 132KV) Source: Report of CIRED Working Group No 4 on Dispersed Generation. 4

5 Local Industry definition of EG The generation of electricity that is directly connected to and evacuated through a distribution system which is connected to a transmission network operated by a System Operations Licensee NERC Regulations for Embedded Generation issued in March

6 Nigerian Power Sector Outlook 6

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8 Nigerian Power Sector Outlook National q Current Daily Peak Delivery 3, Mw as at 9 th July, q 36 Licensed On-Grid IPPs with a total licensed capacity of 13,828 MW and an available capacity of 1236MW. q 21 Licensed Off-Grid IPPs with a total licensed capacity of 313 MW. q 4 Embedded Generation Licenses with a total licensed capacity of 273 MW. q 10 NIPP On Grid Projects with a total licensed capacity of 5032 MW and an available capacity of 1785 MW. q 10 Privatized Gencos (inclusive of Geregu Phase 1, Olorunsogo Phase 1 and Omotosho Phase 1) with a total licensed capacity of 7283 MW and an available capacity of 2173 MW. q 15 Distribution Licenses (both On and Off Grid). 8

9 Nigerian Power Sector Outlook Hurdles q Gas Infrastructure, gas pricing and supply framework. q Transmission Network Losses and dilapidated Infrastructure. q Lack of Liquidity in the system and Interim Rules. q Bulk Trader Financial backstop. 9

10 Nigerian Power Sector Outlook 40,000 MW in the next 6 years????? 10

11 Potential for EG 11

12 Potential - National q Achieve National Aspirations within a shorter time. q Reduced technical losses because of proximity to the network. q Discos have access to more power supply = more cash flows + more customers willing to pay. q Opportunity for Discos to improve distribution network (either by themselves or by the EGs) and performance. q Deepen the electricity market capacity, standards, contracts and more bankable deals. q IPPs with excess power within a distribution network are able to sell their excess power to Discos. q Industrial consumers can have the option of choosing the most suitable suppliers for them. 12

13 Potential - Sub - National q States are able to achieve power supply aspirations within their borders without constitutional constraints. q State investment in and ownership of Discos could work to State advantage. q Power to be supplied to strategic state infrastructure and institutions: such as Water Plants, Hospitals, Schools, Courts, Offices, Street lightning etc. q More Industrial clusters and businesses with better power supply = more business, stronger economy, perhaps more willing tax payers. 13

14 Potential - Sub National Lagos State No Area No. of Locations No. of Sectors Installed Capacity (MW) Number of Generators 1 Somolu Printing Community Matori Industrial Estate Ilupeju Industrial Estate Ikorodu Industrial Estate Lagos Island (broad street & Marina only) Ikeja GRA Oba Akran Agindingbi Omole Omole Dolphin Estate Source: Presenta.on on Power Sector Development: Lagos State Economic Summit April

15 Potential - Power Developers/IPPs q IPPs can sell excess power to Discos. q Cost reflective tariff (different fuel sources and cost of building infrastructure considered). q Potential market for power supply to Housing Estates, Industrial Estates/clusters, State Governments and Telecom Installations. q Option to also supply power to eligible customers. q No distribution lines ordinarily required when connected to a Disco. q No transmission costs. q No distribution licence required. 15

16 Challenges 16

17 Potential Challenges q Distribution Network constraints of 20MW good or bad thing? q Credibility/Liquidity of Discos. q Payment Security Structure. q Regulatory, Contractual Framework & Capacity. q Access created by Discos for EGs- connection conditions and fees. q Eligible Customers Classes of customers currently undefined, could this be a win-win situation for the Discos? q Cost Recovery how will this be structured? q Licensing hurdles for those with excess power could there be another way out? 17

18 Conclusion q Embedded Generation evidently has a lot of potential. q NERC has taken the initial step with the regulatory framework q The Distribution Companies now in private hands are incentivized to encourage embedded generation. q Stakeholders need to make concerted efforts to build the legal, regulatory, contractual and financing framework. 18

19 Thank You for Listening 19