Nigerian Power Sector Reform: Fuel Cells Energy Option


Bello Mukhtar


For many years Nigeria has been witnessing erratic power supply due to the inability of the defunct National Electric Power Supply (NEPA) to generate and distribute enough electricity to meet the nation’s demand. This has been officially confirmed by the Minister of Science and Technology, Professor Turner Isoun, who said “a situation whereby the country gets only 40 percent supply of its energy requirement in the power sector from NEPA is not proper” (Thisday, July 13, 2005). This really contradicts the mandate given to the NEPA when it was established in 1972, that is, to develop and maintain an efficient, coordinated and reliable power supply system in the country.


 Even our co-African countries are doing better than us in the power sector. For example, in the last 15 years, the Libyan power system had a large expansion and during that period a lot of distribution networks had been contracted to fulfill and furnish the required demand needed for the industrial revolution that has started recently. Significant changes in the structure of the electricity industry in Egypt have also taken place, culminating with a major restructuring in July 2001 that unbundled production, transmission and distribution to form 14 power sector companies 100% owned by the Egyptian Electricity Holding Company (EEHC). Also, the Egyptian Ministry of Electricity and Energy has started implementing one of its important projects titled “Energy efficiency Improvement and Greenhouse Gas Reduction” since 1999 with the overall objective of meeting growing electricity demand through reliable, efficient and rational consumption patterns, thereby reducing greenhouse gas emissions, protecting the environment while at the same time providing a sustainable alternative to capacity extension for meeting demand. To buttress the point better, Eskom, South Africa’s primary electricity supplier provides approximately 95% of the country’s electricity requirements which equals more than half of the electricity generation on the African continent. Its 24 power stations have an installed generating capacity of about 40,000 MW. Eskom committed itself to connect 1,750 000 homes between 1994 and the year 2000 and has exceeded this commitment by 750 homes one year ahead of target. Unfortunately, the power supply situation in Nigeria is pathetic which has made life difficult and has contributed in killing the industrial sector or at least making it half-death with unspeakable economic consequences. Nigerian populace has since changed the official name of NEPA to “Never Expect Power Always” to match the circumstance. This idea of changing the name has been sold to the Federal Government but of course did not want to adopt the name given by the public rather gave it Power Holding Company of Nigeria (PHCN).


The change in name which has taken effect from July 1, 2005, is part of the reform programme the power sector in the country is currently undergoing, designed to ensure stable and regular power supply. As one of the officials put it “we are adopting the new name to conform to the privatisation of the authority and the unbundling of generation, transmission and distribution divisions into business outfits” (NAN). The PHCN was issued a certificate of incorporation on May 5, 2005, after President Olusegun Obasanjo had assented to the Electric Power Sector Reform (EPSR) Act on March 11, 2005. Among other things, the Act provides for the establishment of a Nigerian Electricity Regulatory Commission (NERC) to monitor and regulate the power sector for better performance. Recently, at a meeting on the reform of the country’s power sector, the President challenged the PHCN to raise the electricity generation to 10,000 MW by the year 2007 from the present 3,500MW. He charged PHCN and other stakeholders in the energy sector to rise up to the occasion “by ensuring a stable and adequate power supply in all parts of the country”.


 Part of the stakeholders seems to be responding by looking at alternative means to augment the 6,000 MW installed generation capacity of current hydro and thermal power stations in the country. This came to light when the then Presidential Adviser on Petroleum and Energy Matters, and now the Minister of State Petroleum Resources, Dr. Edmund Daukoru, listed wind, solar, tidal waves energy as some of the various alternatives to oil and gas, which the Federal Government is interested in exploiting. Also the Director, Energy Commission of Nigeria (ECN), Professor Abubakar Sambo, said the nation really needs to diversify her energy supply sources if it must realize the much cherished energy security in the country. He said ECN is presently intensifying efforts at developing alternative forms of power generation such as wind-driven power facility, solar and nuclear energy. Already negotiations have started between the authorities in the country and the International Atomic Energy Agency (IAEA) on the nuclear power generation alternative. At the opening of a workshop for the public presentation of Nigeria’s Energy Policy, the Director of the Department of Technical Cooperation of the IAEA said “IAEA team is in Nigeria to discuss with the competent authorities the development of technical cooperation with Nigeria in the area of Sustainable Energy Development and assist the country in its further work towards introducing Nuclear Power in Nigeria” (Thisday, July 6, 2005). Minister of Science and Technology, Professor Turner Isoun, also said government plans to generate about 2000 MW from nuclear energy system in the near future. In addition to the nuclear, solar and wind energy sources another viable option worth considering is that of fuel cells.


Recent years have seen an upsurge in interest in fuel cells for a range of applications, in particular for transport and static power systems. From the mid-1990’s, new situations appeared in energy conversion. That is, the environmental issue and the deregulation of power generation, distribution and retail, which contribute to make fuel cells more favourable. The advantage of generating and supplying electricity near the end users without having to transmit it for hundreds of kilometers is of particular interest. This will remarkably reduce transmission losses and cost. This perceived saving is clear from the statement of the minister of science and technology, Professor Turner Isoun, saying “we would use most of the money saved in dept cancellation to build a viable transmission infrastructure” (Thisday July 6, 2005). It has been observed that fuel cells will probably play a key role in the future world energy scenario. Their most important characteristics namely high efficiency, near zero pollution, reliability, economy, planning flexibility, low noise levels and future development potential, will be mandatory in the next generation of power plants. Should hydrogen be the main energy carrier of the 21st century, as many technical studies point out, then fuel cells will have undisputed advantages over all other energy conversion devices.


 Phosphoric Acid Fuel Cells (PAFC), Molten Carbonate Fuel Cells (MCFC) and Solid-Oxide Fuel Cells (SOFC) are being used for stationary power generation and approximately 75 MW of PAFC generating capacity has been installed and is operating. Typical installations include buildings, hotels, hospitals, and electric utilities in Japan, Europe and the United States. Both MCFC and SOFC can use natural gas fuel which we have in abundance while the PAFC uses hydrogen. World wide, several power companies are actively engaged in the development and installations of the fuel cells; Siemens Westinghouse (US), Ballard Power Systems (Canada), Fuji Electric Corporation (Japan), Ceramic Fuel Cells Limited (Australia) etc. Furthermore, government agencies like US Department of Energy, European Community Energy Commission, Korea Institute of Energy Research (South Korea) etc, are taking part in and funding fuel cells research and development.


Therefore, it will be a good idea for the Federal Government through the Energy Commission to set up Fuel Cells Research Centre just like the Solar and Nuclear Research Centres in the country. The centre will be quite useful especially with the increasing hope of realising the concept of “Hydrogen Energy Economy”. The PHCN together with these centres and other relevant authorities can make plans and work religiously to achieve the nation energy needs even beyond 2007. It will be important for the authorities to have long term plan on how to meet up the increasing energy demand based on the expected increase in population, economic activities and improved living standard, so as to prevent future reoccurrence of the problem. This will no doubt help because even countries that are doing well in the energy sector have plans for the future. For example, Japan has set target of 10 GW of fuel cells power and 5 million fuel cells vehicles by 2020. United States is also thinking of 20 GW of fuel cells power and 8 million fuel cells vehicles, for the same year. Needless to say, the private sector and the general public need also to contribute significantly in order to sustain the reform efforts.


 Finally, the restructuring effort of the Nigerian Power Sector should be pursued with full commitment, sincere effort, foresights and care. Like Mr. Doru Voicu, rightly said regarding Romania’s Electricity Sector Privatisation at the 17th International Conference on Electricity Distribution, Barcelona, May 2003, “A major concern for ‘Electrica SA’ (Romania) at this moment is getting ready for a very important stage – privatisation of the electricity distribution and supply sector, in compliance with the actions of the Government of Romania in this field. However, the privatisation process in itself should be conducted very carefully, given the strategic importance of this sector and considering the international experiences in the field”. May God help us get out of the problem once and for all, ameen.