Sokoto Plant To Generate Power At N178/KW

December 7, 2016
Sokoto Plant To Generate Power At N178/KW

Sokoto Plant To Generate Power At N178/KW

By Dipo Olowookere

Sokoto State power plant will generate electricity at N178 per kilowatt, more than three times its current price in the region, Daily Trust investigations have shown.

The 38-megawatt Independent Power Plant (IPP) was built by the state at the cost of N3.8 billion and will consume 33, 000 diesel daily.

Data from the Nigerian Electricity Regulatory Commission shows that the highest approved price for residential customers under the Kaduna Distribution Company (Kedco), where Sokoto belongs, is N45 per kilowatt.

The plant “consumes 33,000 litres” of diesel daily, the director-general of the project, Mr Umar Bande, said during a test run of the plant last week.

Daily Trust findings show that the state will be spending an average of N6.8 million daily on diesel at a market value of N206 per litre. By this, the plant will consume N204 million worth of diesel every month.

The annual cost of diesel to be consumed by the plant is N2.47 billion per annum, more than two-third of its worth on fuel every year.

By the estimated 33,000 diesel per day, the plant will gulp 868 litres of diesel to generate one megawatt (1000 kilowatt), amounting to N178,808 for every megawatt, using a market value of N206 per litre of diesel. A kilowatt generated by the Sokoto plant will therefore cost N178.8.

Kaduna Electric, whose network will convey the power to customers, presently sells electricity at N45.76 per kilowatt hour, according to the 2015 Multi-Year Tariff Order (MYTO) approved by NERC.

The Sokoto plant, which contract was awarded in November 2008, has a multiple type turbine that can use diesel, gas or LPFO, Bande said. Officials also said the plant would  begin operation after the transmission infrastructure and other minor aspects are completed.

Daily Trust learnt that Kaduna Disco gets an average of eight percent of power daily from the national grid through the Transmission Company of Nigeria (TCN), which it allocates to Kaduna (66 percent), Kebbi (17 percent), Zamfara (nine percent) and Sokoto (eight percent).

The MYTO 2015 shows that residential customers (R2-SP) presently pay N26.37 for every kilowatt hour; the R2-TP pay N28.05; residential customers 3 (R3) pay N42.74, and R4 customers pay N45.76.

Commercial customers under class 1 (C1) pay N33.17; C2 pay N38.88; and C3 pay N44.22. For the industrial customers, D1 customers pay N36.95; D2 pay N39.13, and D3 pay N44.22.

Customers under category A1 (agriculture and public agencies) are paying N33.17, A2 pay N38.56, and A3 pay N39.13. Other customers who use streetlights are put under ST1and they pay N30.30/kilo watt hour.

‘Liquefied Petroleum Gas is better’

A power sector and energy expert, Mr Dan Kunle, said for Nigeria which recently agreed to support clean energy initiative and climate change, Liquefied Petroleum Gas (LPG) could have been the fuel source for the plant as it could be brought in from nearby Niger Republic or from the Niger Delta rather than trucking diesel at a high price.

He however said the state government could only sustain the operation for three to five years by subsidising the fuel cost if having sustained power supply is its key focus at the moment.

“There is nothing government cannot subsidise if it is determined to do that in the most scientific approach. If that is the energy need of Sokoto State Government, they can put that into use and have uninterrupted power per day for the next few years.

“If the impact it will create for industrialization will flow back, then that is good and sustainable. Americans subsidize power up to N200m daily but they do it on scientific basis. It must be subsidized if that is what the government wants,” he said.

Why project is delayed

Daily Trust reports that the project, initially expected to be completed within six months in the first quarter of 2009, was stalled for eight years over what state officials described as “unforeseen circumstances.”

The deadline was first shifted to September 2009, later to December 2010 and to July 2011. It was then extended to September 2013 and later August 2014 and the dates keep changing. Daily Trust findings revealed that the source of fuel for powering the plant is the major reason behind its continuous delay.

“The project was conceived without a proper feasibility study. That is why the issue of fuelling the plant was not properly addressed,” a source said.

Another source said: “They weighed the use of diesel to power the plant’s generators which will consume dozens of trucks of diesel per day. The cost, logistics, safety and even availability of diesel dissuaded the officials from that option.”

But the Chief Operating Officer of the contracting firm, Vulcan Elvaton Ltd, Mr Franklin Ngbor said last week that the turbine of the project had already been tested three times.

He said the synchronisation of the plant with the fuel tank and the main evacuation line, down to the transmission line is the only thing remaining.

“The plant when fully completed, finally fired and integrated into the national grid, can work for five consecutive years, non-stop,” he said.

‘It will boost Sokoto’s economy’

During the last test run, the Secretary to the State Government, Bashir Garba, said an agreement will soon be signed between the state government and the TCN on the evacuation of the power to the national grid.

He said the project was necessitated by the epileptic power supply to the state from the national grid, adding that the state will enjoy nearly 24-hour power supply when the plant becomes fully operational.

“This will also eventually boost the socioeconomic landscape in the state, curb poverty, restiveness and unemployment, among other myriad of direct and indirect benefits,” he said.

Daily Trust

Dipo Olowookere

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan.

Mr Olowookere can be reached via [email protected]

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