Report predicts bleak future for Nigeria’s power sector

wya-12-4-10A bleak future may be the lot of Nigeria’s power sector, going by a new report released by an international agency which predicted a slow growth in the troubled industry, which it said, may continue to suffer losses in the transmission and distribution network in the nearest future.
The Companies and Market report, which evaluated the level of developments in African and Middle East power sector, said that Nigeria would account for 2.32 per cent of Middle East and Africa (MEA) regional power generation by 2014, as it struggles to narrow the gap between demand and supply.

Besides, it ranked Nigeria in the eighth position above only Algeria and Kuwait in its updated and expanded “Power Business Environment” rating.

“Nigeria’s position should prove secure over the medium term, although South Africa’s four points above is likely to remain out of reach. Import dependency is average for the region, while the proportion of renewables is relatively high. However, the power sector is not particularly competitive, with limited progress towards privatisation,” it said.

The forecast showed that Nigeria’s real Gross Domestic Product (GDP) growth would average 7.54 per cent a year between 2010 and 2014, with 2009 growth assumed to have been 6.90 per cent. The population is expected to expand from 151million to 167million over the period, with GDP per capita and electricity consumption per capita forecast to increase by 81 per cent and 15 per cent respectively.

“Power consumption is expected to increase from an estimated 23.3 terawatts hours (TWh) in 2009 to 29.7TWh by 2014, providing an improvement in market coverage on the basis of eight per cent average annual growth in electricity generation. Losses of more than 2.5TWh during power transmission and distribution mean the market is likely to remain tight for several years,” it stated.

It however forsees improved power generation through different sources

“Between 2009 and 2019, it forecasts a 164.7 per cent increase in Nigerian electricity generation, at the top of the MEA range. This equates to 68.9 per cent in 2014-2019, up from 56.8 per cent in 2009-2014. PED growth is set to rise from 23.8 per cent in 2009-2014 to 27.6 per cent in 2014-2019, representing 58.0 per cent for the entire forecast period.

“Hydro-power use is forecast to increase by 100 per cent between 2009 and 2019, while thermal power generation is expected to rise 186 per cent during the period, fuelled largely by natural gas.”

“The MEA power generation estimate for 2009 is put at 1,233 terawatt hours (TWh), an increase of 2.5 per cent over the previous year. We forecast an increase in regional generation to 1,624TWh by 2014, a rise of 31.7 per cent between 2009 and the end of the forecast period.

“Thermal power generation in 2009 was estimated at 1,151TWh, accounting for 93.3 per cent of the total electricity supplied in the region. Our forecast for 2014 is 1,493TWh, implying 29.7 per cent growth that reduces the market share of thermal generation only slightly to 91.9 per cent – despite environmental concerns about promoting renewables, hydro-electricity and nuclear generation.”

The nation’s thermal generation in 2009 was an estimated 18TWh, or 1.56 per cent of the regional total. By 2014, the country is expected to account for 1.91 per cent of regional thermal generation.

Regional energy demand is forecast to reach 1,084.5million tonnes of oil equivalent by 2014, representing 24.85 per cent growth over the period since 2009. Nigeria’s estimated 2009 market share of 12.4 per cent is set to rise to 12.3 per cent by 2014.



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