By Yemi Yusuf
Proton energy, a leading independent power plant developer in sub Saharan Africa, is set to revolutionise Nigeria’s power sector by adding 1500MW of installed capacity to the Nigerian national grid, about a third of the total current energy supply, in the next half decade.
Nigeria has one of the world’s lowest electricity supply relative to population and with 92 million people living without power, it is arguably the worst in the world according to a report by Tracking SDG 7 in 2020. The report noted that for too long electricity growth has failed to keep up with population growth leading to infrequent power supply and power shortages.
The lack of power has affected all sectors of the Nigerian economy where a large amount of power is often self generated through generators and coal, costing around 5 trillion daily, and damaging the environment as well.
For over 30 years Proton energy has developed power plants all over the continent, with a major focus on Nigeria where it has signed a Gas Supply Aggregation Agreement with various companies for the provision of natural gas for the first phase of the 500 MW Proton Delta Sunrise Project in Delta State. The companies are Nigerian National Petroleum Company (NNPC) Limited, Shell Petroleum Development Company (SPDC), TotalEnergies, the Nigerian Agip Oil Company Limited (NAOC), and the Gas Aggregation Company Nigeria Limited (GACN).
This agreement will provide natural gas, an essential part of developing a power plant and because its feedstock is located in the Niger Delta that essentially determines the location of the power plant. The first phase, which has been planned to start commercial operations in 2025, will add 150MW to the National grid with the Second adding 350MW.
“Proton Energy supports the further integration of renewable sources of energy onto the National Grid. The project has been designed to minimize its environmental footprint whilst better utilizing available domestic gas supplies which in many cases is flared. The project will be one of the first projects in Nigeria to utilize a more efficient Combined Cycle Gas Turbine configuration (CCGT) and will incorporate cutting-edge carbon reduction technologies.”Executive Vice-Chairman and CEO Oti Ikomi said in the commemoration of the Gas Supply Agreement in Abuja on the 27th of April, 2023. “This will enable the project to reduce its carbon footprint and meet the most stringent emissions standards for a gas to power projects. The project additionally allows for a future option to incorporate the use of hydrogen as feedstock in the future. Critically and in the context of national climate pledges the project will enable the country to further deepen and accelerate the incorporation of intermittent renewable projects into the national grid through the supply of reliable base load power”.
Mr Oti Okimi who expects to reach a financial close this year and to start construction after, has also promised 2000 jobs for the immediate community in Sapele, Delta and 10,000 direct and indirect jobs in the entire community and the nation at large.
Quite impressed by these statistics, Abubakar Bagudu, the former governor of Kebbi State and member of the presidential transition council who spoke at the signing of the agreement, noted that, “About a year ago, on the back of the Ukraine crisis, Nigeria came to appreciate the economies of our gas. That suggests that we can do more with our gas. In less than a month, the President-elect will be sworn in. He believes in gas resources and the ability of Nigeria to compete with other countries.”
A former Commissioner for Finance in Lagos State, Chief Adebayo Olawale Edun who is also a member of the Presidential Transition Council, gave assurances that the president is willing to increase security to ensure the supply of crude oil and gas.
Mr. Oti Ikomi does have other worries however, and he has noted that the important problem to solve is in the implementation and execution of initiatives. In a media chat, he observed that “There has been a long stream of initiatives, but they have not been implemented. The main weakness we have is execution and implementation. Specifically, in terms of evacuation. The Presidential Power Initiative must be speedily reconfigured and it might have to see leadership changes, so that projects like the Siemens Initiative, can be implemented. Secondly, there is shortage of meters nationwide. The National Mass Metering Programme phase zero produced one million meters; there was supposed to be a phase one for four million meters. The initial tenders and processes was done; it has not been implemented. If you are unable to adequately collect and meter the customers, they would not pay and that creates a deficiency in the value chain. So, we must commence the four million metering in the phase one and any other metering initiative, so that every Nigerian that has electricity, if it is through the Distribution Companies (Discos), you must be metered.”
He also advises the new government to implement and execute the Power Purchase Agreements (PPAs) within 60 days of coming into power, urging it to “take a broader, more progressive and more international project finance approach, so that they can give the necessary guarantees.”
Mr Ikomi believes a special position should be created in an advisory role for the management of gas and power in Nigeria as there’s a gradual global shift from fossil fuels to renewable energy but admits that the amount of energy needed in Nigeria can not be supplied by renewable energy alone.
Proton energy have often reiterated that it believes completely in Nigeria and the Nigerian power sector and understands that a strong and dynamic power sector is necessary to strengthen Nigeria’s economy and improve growth prospects. The Chairman of Proton Energy, Mr Ike Osakwe recently commended, on behalf of his board, “the Management of Proton Energy for diligently progressing the project over a number of years. We re-echo our gratitude to our gas supply partners Shell SPDC, NNPC, GACN, Total Energies and AGIP. It is good to see the project reach near ‘shovel ready’ status and we expect that on the back of this achievement the project will be able to reach an early financial close and start to deliver a much needed reliable supply of power megawatts to the national grid.“
This major stride by Proton Energy has rekindled the hope of Nigerians that the end is in sight for the perennial electricity shortage that has held the country down in so many ways and one hopes that the passionate people at Proton Energy and the incoming Tinubu administration can deliver on their promises.
