Power not for sale, NERC warns Lagos govt

• Our IPPs only power govt utilities, streetlights, says Commissioner 

By Tope Templer Olaiya and Emeka Anuforo

LAST week’s commissioning of the 10.4 megawatts Alausa Independent Power Project (IPP), built at a cost of N3.2 billion has brought to three the number of IPPs operational in Lagos State.

An earlier commissioned 10MW on the island currently powers the general hospitals, Lagos High Courts, the State House, City Hall, Island Club, e-learning centre, some schools, churches and mosques on the island and so many public utilities; same for the 12.5MW sited in Akute, a border town in Ogun State.

Over 60 buildings and 4,000 offices at the state secretariat have been plugged into the Alausa IPP, which is a joint venture between the state government and Oando Gas and Power.

With these developments, as much as 130 heavy-duty generating sets, between the range of 30KVA and 50KVA, have been rendered redundant even as the drone of generators has become history in Alausa.

According to the Senior Special Adviser to the Governor on Power, Dr. Fouad Animashaun, two other power plants would be completed next year. They are the 8.8MW Mainland Power Plant that will serve Ikeja GRA, Lagos State University Teaching Hospital (LASUTH), Lagos Police Command, Ikeja High Court and Ikeja GRA. The second IPP, a 6MW gas project at Lekki will serve Victoria Island/Lekki Phase 1 waterworks, streetlights and other amenities in that axis.

The newly commissioned Alausa Power Plant, Ikeja

The newly commissioned Alausa Power Plant, Ikeja

According to the projection of the state government, with the introduction of energy saving bulbs in Alausa, the state would save N2.8 million monthly on its energy spending.

Governor Babatunde Fashola at the unveiling of the plants last week, said government had audited 1,300 buildings, offices and restaurants and discovered that there were about 17,000 generators in those places, which had resulted in many residents paying four times more through the generation of their own power alongside paying for unreliable supply from the national grid.

He said: “In Magodo, the whole estate is spending N8 million on diesel daily, yet it is connected to the national grid, but with IPP in place, they will now spend a little over N2 million at N12.75k per kilowatts per hour. In Lekki, about N12 million is spent daily on public electricity, but with an IPP, only a little over N3 million would be paid as rate.”

Fashola urged residents to switch over to retrofitted bulbs, which according to him, saves eight times the amount of money that would have been expended on electricity using the regular bulbs and in the long run would put more money in the pocket of consumers.

However, Lagos, with its ambitious aim of providing uninterrupted power to its citizens, could well be working outside the framework of the Power Reform Act of the Nigeria Electricity Regulatory Commission (NERC), some observers say.

Amadi, NERC Chairman

Amadi, NERC Chairman


In line with the Electric Power Sector Reform Act (EPSR) 2005, Independent Power Producers who have the capacity to generate electricity on or off-grid are welcome and it was on this basis that the Lagos State government applied and got license to build and operate the Alausa Power Plant.

According to the chairman of NERC, Dr. Sam Amadi, the sale of generation and distribution firms of the Power Holding Company of Nigeria (PHCN) has not ditched other Independent Power Plant (IPP) projects.

“Lagos has a license to generate power for the use of some of its establishments. Every person, company or institution can be a captive generator or off-grid generator. There is no inconsistence between selling Ikeja or Eko DISCOs and Lagos State having a license for limited generation or distribution to its facilities,” Amadi said.

He explained that the dedicated license issued to Lagos State for the Alausa Power Plant restricts its distribution to state facilities within Alausa and environs.

The Guardian learnt, however, that Lagos State is not permitted to sell the power generated. They are also not permitted to use the existing distribution network of PHCN.

Section 62 of the Electric Power Sector Reform Act 2005 provides that any person intending to engage in the business of electricity generation, transmission, system operation, distribution or trading shall be required to obtain an operator’s license from the Nigerian Electricity Regulatory Commission.

Tijani, Lagos State Commissioner of Energy and Mineral Resources

Tijani, Lagos State Commissioner of Energy and Mineral Resources


Lagos State Commissioner of Energy and Mineral Resources, Taofiq Ajibade Tijani, said “the Alausa plant is restricted to the secretariat, except for a few government facilities like the Surveyor General’s office, Lagos Television and Radio Lagos, Lagos Internal Revenue Service (LIRS) building, churches, mosques and all the streetlights around Alausa. There is a misconception about the governor’s comment on how residential areas like Magodo can generate their own power.

“What the governor said was that we have conducted energy audit to investigate what they are spending on PHCN and diesel and explain the issue of waste and energy conservation in the sense that if they decided to have an IPP for the estate, the gas they would be using may not be up to N2 million, which is also environmental friendly.

“We never said we would give power to anybody from our own IPP. In fact, we have some commercial buildings in Marina and Broad Street – UBA House, First Bank, etc – coming to ask us to give them power but we told them it’s not possible,” he explained.

Already, officials of NERC are due in Lagos soon to meet with government officials in charge of the plant and ensure that work within the ambits of the license issued them, as some residential buildings living close to some of the power installations are already enjoying free uninterrupted power supply to their homes.


That there may be light

Firms rescue Nigerians from darkness with biomass power pallets

President of Bioenergy and Envirocycles, Mr. Ernest Onyenze (second left), director of Strategic Initiatives, All Power Labs, Tom Price (left) and others during the public demonstration of biomass power pallet in Lagos.

President of Bioenergy and Envirocycles, Mr. Ernest Onyenze (second left), director of Strategic Initiatives, All Power Labs, Tom Price (left) and others during the public demonstration of biomass power pallet in Lagos.

By Tope Templer Olaiya, Assistant Lagos City Editor
It sounds too good to be true, but a United states-based company, All Power Labs (APL), in partnership with Bioenergy and Envirocycles Nigeria Ltd, last weekend demonstrated a pioneering technology for making renewable energy from biomass (waste), which left hundreds of participants awed at how simple solutions could end decades of power failure and unfulfilled promises in the country.
The presentation held to a select audience in Lagos demonstrated the new, commercially available source of energy generation based on biomass gasification. Like the often quoted saying that good things come in small packages, this wonder machines called Power Pallets, looks like medium-sized generating sets and are available in 10kW/25KVA and 20kW/38 KVA sizes.
This power generation converts woody biomass to electricity and heat. The Power Pallet is distinguished by its ease of use, compact size and affordability. Unlike regular alternative energy sources like solar, which is complex to install and use, and generating sets, which require considerable use of gasoline like petro or diesel to function, the Power Pallets makes on demand energy anywhere there is available biomass, such as nut shells, wood chips, coconut husks, corn cobs, sawdust, poultry litter, sugarcane bagasse, straw and rice husks.
According to the founder and president, Bioenergy and Envirocycles Ltd, Mr. Ernest Onyenze, “this initiative is the key that will unlock a robust transformational change in the social economic landscape of Nigeria. The value chain will impact positively on the poor and the unemployed youths.
“Our mission is to move this country forward via small-scale electricity generation at very low cost. It is possible to get electricity to the rural areas and to all artisans since so many people’s livelihood depend on power daily. It is a shame that artisans sleep or play away productive man-hours as they wait in vain on the Power Holding Company of Nigeria (PHCN). This will definitely reduce their income,” he said.

Just last week, in a move akin to asking Nigerians to pay more for darkness, the Nigerian Electricity Regulatory Commission (NERC) announced an increase in fixed electricity charges (Multi Year Tariff Order) for 2012 to 2016. According to the chairman of NERC, regardless of the services rendered, energy cost will continue to go up every year till 2016.
This, Onyenze said would be worsened by government’s proposed bid to sell the power plants to private investors. “Once the power plants are sold off in their privatization of the sector, power tariff would go up further. Our intention is to work with electricity vendors who would purchase the power pallets and service residential estates, markets, villages and cooperatives with 24 hours electricity at a minimal cost to running generators.
“We want to take this technology to our campuses and colleges of technology, so that in the nearest future, we can have graduates who would be self-reliant working on the equipments by distributing and installing the device. A lot of rural electrification projects are moribund because they need to be connected to the national grid, but with the power pallets, it is a straight generation to homes and settlements.”
The programme is tailor-made for cooperative institutions, hospitals, SMEs, organized artisans, and individuals, who not only require power, but cheap and competitive power that will bring cost of production low. The initial cost of the power pallet is high, but its running cost is very low.

Presently, aside installation and after-sales services, the landing cost of the 38KVA power pallet to Nigeria is N5 million, while the 25KVA machine is N3.5 million. However, Bioenergy and Envirocycles is offering some marketing options such as getting banks to issue bank guarantee for private individuals to pay their electricity bill monthly using the pallet.
“How this works is that once we have your bank guarantee, we sell kilowatts to individuals for private usage at N16 per watt and we send you an invoice of your power usage at the end of the month. You can regulate your power usage and as well be guaranteed 24 hours electricity. PHCN’s current charges is N20 per watt and cannot be relied on for your power needs, while maintaining a generating set has its added costs.”
On his part, the director of Strategic Initiatives, APL, Tom Price, said there is an extraordinary opportunity of a waste-to-wealth campaign converting easily available biomass into affordable, renewable, reliable energy in the country. He added that the use of biomass for energy production is a key component of the new ‘Power Africa’ initiative announced by US President, Barack Obama, early this month.
“The initiative will invest up to $7 billion in US aid and resources to help African nations gain more access to electricity. The demonstrations in Nigeria follow on the heels of a very successful similar event in Monrovia, Liberia, sponsored by Winrock International and USAID. The Power Africa programme aims to double power access in the sub-Saharan part of the continent, which would not only help residents, but also convince private sector companies to increase in new economic ventures in the region,” he said.