United Capital analysts call for cleaner, renewable energy on fluctuations in gas-generated power

Power analysts are calling for a large-scale diversification to cleaner and renewable energy such as solar, wind, and biomass to ensure more reliable electricity supply.

The call is at the instance of vagaries and fluctuations in power generation in the country, which have been affected by too much reliance on gas-powered thermal stations, requiring high maintenance costs with some adverse environmental impacts.

“Generation remains inhibited by heavy reliance on gas-powered thermal plants, requiring high maintenance costs with some adverse environmental impacts. Power depends on events in the oil & gas sector, which faces hydra-headed challenges of lack of cost reflective gas price, poor gas infrastructure, and frequent pipeline vandalism,” analysts at United Capital Research said.

In their Daily Market Commentary, Thursday, February 8, 2018, the analysts specifically noted that energy generated in Nigeria have fluctuated to peaks and lows because gas-powered thermal stations account for most of the electricity generated.

Citing NBS data, they affirm that an average of 94,627Mwh or 77.5% power was generated via thermal stations in Q4- 17compared to 22.5% from hydropower, adding that over 40 percent of gas reserves are flared as it is more profitable due to uneconomic pricing.

Meanwhile, hydro-powered turbines are prone to seasonality and weather conditions.

They stated that while recent strides, such as the improved wheeling capacity of the Transmission Company of Nigeria (TCN) to 7000MW, the 450MW Azura power project in Benin, and the recently signed Ogun State/private sector MOU to generate 286MW, are commendable, there is need for a large-scale diversification to cleaner and renewable energy such as solar, wind, and biomass, which is needed to ensure more reliable electricity supply.

“In addition, a complete liberalization of the sector, amongst other bold policy changes are urgently needed to drive it out of the doldrums,” they stressed.

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