Nigeria

I

n distributed or embedded generation (DG) schemes, effectiveness,the transmission and distribution sectors will power plants sized typically &om a few kilowatts up to operate as monopoly businesses in their franchise areas, lOMW are sited at or near the loads, operating in a with strong oversight from the regulator. This plan should help transform the electricity supply stand-alone mode or connected to a grid at the distribution or sub-transmission level. In some cases, indusw h m its current state of an inefficient unprofitable entity with a cumbersome bureaucratic structure to that of DG harnesses unconventional energy resources. In developingcountries DG is ideally suited for small remote an efficient, innovative and profitable industry comprising individual companies operating under the discipline of a loads located far from the grid. free market economy DG technologies and energy resources include: Nigeria's national assembly recently passed an Electricity W Wmdelectric conversion systems Reform Bill (yet to he signed by the president) that will give W Mini and micm hydro plant legal backing to this radical restructuring. The Bureau for W Solar PV and solar thermalelectric conversion Public Enterprise has since embarked on preparatory work W Geothermal for the unbundling of NEPA. W Biomass W Small co-generation plants powered by natural gas and DISTRIBUTED GENERATION IN NIGERIA supplying electrical and thermal energies. W Electro-chemical energy systems (eg fuel cells and One of the factors in favour of distributed generation, especially in developingeconomies like Nigeria, is the need hydrogen production) for secm electricity supplies for large industrial customers. W Electrical storage system NEPA has not offered reliable supplies, so distributed W Thermionics and thermoelectrics generation should bring the followingbenefits to industrial W Tidal waves and ocean flows Since DG is located on or near the location where the customers, complementing the activities of NEPAs energy is used, it usually operates at the low voltage electricity distribution service:

DISTRIBUTED GENERATION IN

EN Reliable electricity supply Power of the high quality required by industrial applications that are dependent upon sensitiveelectronic instruments and controls. Efficiencygains for on-siteapplications,which minimise DEREGULATION IN NIGERIA line losses and voltage sag. Nigeria's low electricity consumption (around 85kWh per capita), provided mainly by National Nigerian Electric Et A stand-alone power supply in m a s where transmission and ktribution infmstruchm does not exist or is grossly Power Authority Association's (NEPA's) unreliable system inadequate. and infraslructure,poses a challenge to the government. Provision of backup and other ancillary services in times NEPA's poor performance is one reason why the of stress on the network. government recently decided to deregulate the industry It Reduced congestion through peak load shaving. decided to break the company up into three sectors Distributed or embedded generation in Nigeria is generation, transmission and distribution/supply - and privatise its constituent parts, allowing the new companies generally a point-to-point radial connection from the to operate under competitive market principles as far as generating machine straight on to the load centre. NEPA's electricity distribution operation to consumers covers a practicable. Figure 2 shows the proposed structure In the new 'unbundled' structure,an industry regulator wider geographical area involving both radial and mesh will he set up to oversee the activities of industry networks used to supply electricity to several customers on participants to ensure fairness in all their operations and the low voltage end of bulk electricity delivery Over the years small-scale on-site distributed or protect consumers' interests. To ensure efficiency and

(hetween llkV and 132kV)level of the bulk electric power distribution system. Since they are on site, they have greater local control and can be used more efficiently

~

Nigeria

ON-SITE POWER HAS AN IMPORTANT ROLE TO PLAY IN NIGERIA AND CAN HELP SUPPORT THE GRID. BUT THE NEW INDUSTRY MUST BE STRUCTURED TO GIVE DUE WEIGHT TO DISTRIBUTED GENERATION, AS ABIMBOLA ODUBIYI AND INNOCENT E DAWIDSON EXPLAIN embedded generators have been established alongside NEPA's 11-33kV distribution networks. These small generators (mostly using diesel or furnace oil) supply power to industries and in some cases communities attached to them, through self-built private distribution networks. It is unfortunate that NEPA has not taken advantage of the opportunities provided by DG to alleviate the problem of power shortages, especially in the rural electrification programme. Overemphasis on costly large centralised electricity supply facilities is depriving some customers of the benefits that DG can provide. Early in the deregulation process, the following issues regarding DG and its impact on operations of local distribution network operators @NOS) need to be addressed Wfl DNOs cmted h m NEPA have monopoly status as the sole provider of electricity iu their franchise region, especially in rural areas; and are they required to oversee the operations of DG connected to their networks, as it affects wider network system integrity? The main concern will be how to stop DNOs abusing their monopoly power. DG owners are also concerned a b u t the reliability of the DNO networks after deregulation and privatisation, taking their cue from the current performance of NEPA's distribution sector. High reliability is vital. Furthermore, NEPA's successor companies wiU face financial, geographical and environmental constraints on quick capacity expansion of generation, transmission and distribution infrastructure in the country It is unclear whether the policy of deregulation of the electricity industry addresses the impact that DG connected to the local distribution network has on network reliability In addition, DG may provide services to support local DNOs and suitable remuneration for these services must be addressed. In the short to medium term, demand for power in Nigeria will continue to outstrip supply It requires investment in distributed generation across the country Distributed plants should be encouraged, set up close to consumers by private investors and DNOs. Distributed generationshould also be considered as an addition to other co-operative solutions, such as network upgrades, line uprating and integration of protection, metering, control, and voltage support. It canbe used to bring electricity to the masses as well as industrial concerns in rural areas. In the context of Nigeria, when there are abundant fossil resources and year round sunshine, the best DG is:

W Combined heat and power (CHP)- mostly @-fired

plants. It offers fuel operational efficienciesof 70%. W Advanced industrial turbines and microturbines with typical efficiencies of 2140% (without using external exhaust heat). The exhaust heat can be used in a combined cycle to fire a small steam turbine, thereby improvingefficiency Their maintenance costs are among the lowest of all generating technologies.They are most suitable for light industrial and commercial establishments, plus rural domestic use.

+

IEE POWER ENGINEER 1 OCIOBEWNMIEMBER2W3

19

Solar power - using snn-trackingmirrors to reflect and concentrate sunlight unto a receiver where the heat is used to drive an engine or electric generator. At a cost of US$650 for a 55W system, this power source is not affordable for most rural households in Nigeria. However, it is suitable for remote rural energy supply applications, powering telecommunication base stations and outpost rural emergency services.

ECONOMIC AND TECHNICAL EVALUATION In assessing a customer's energy needs, and to determine the suitability of investment in stand-alone or gridconnected systems, regulatory, economic and technical issues must he considered. An approach for assessing investment in distributed generation is shown in Figure 3. Since DG development will not cease after deregulation, owners of DG will need the professional services of engineers, economists and others to negotiate with DNOs, and to design and implement solutions. They must: E Quantify the costs and benefits that energy produced by DG contributes to goods and services or the quality of life in the DNO area. Costs and benefits include ecology; opporttmit4:risk and depletion. E Identify a method for quantifying cost and benefits that is more appropriate than the current distribution tariff methodolog)! W Identify methods for resource planning and modelling that are responsive to real-time cost and new technology and are compatiblewith distributed, disparate resources. The method should be able to evolve. E Define an operational methodology that supports and encouragesparticipation in a deregulatedenergy market. The method must be cost effective and developers must define the information required.

CHALLENGES FOR DISTRIBUTED GENERATION As countries deregulateandrestruchm,they areconfronted with the challengesof setting up regulatory and contmctd arrangements that promote the interest of distributed generation within the geographical bonndaries of the DNO. In the pmcess of deregulation of the electricity industrj: the probable challenges confronting government officials and their advisers fall into threebroad categories. E Thelegalandregnlatoryfmmeworkmust offer incentives for current and future distributed generation to participate inelectricitytradingafterderegulation,whilst accommodating the wider responsibilities and interests of the DNO. '&'open access' regime and the connection agreement hy whichthe distributed generationplant bas access to the DNOs network must be well defined. W In regulating network access, DG modes of operation should be identified,along with appropriate engineering and commercialboundaries. This will q u i r e supporting infrastructure such as protecting relays, metering and data collection. Payment for services provided by DG operators to DNOs to support the system must be provided, as well as for services provided by DNOs.

The financial environment must offer proper financial incentives whereby the DG operator and DNO can offer mutual assistance. An appropriate commercial forum

shouldbeestablishedinwhichDGownersandDNOscan meet to discuss industry matters affecting their operations. To overcome these challenges and provide an 'enabling' environment for DG after deregulation, f m t a defmition is required of what constitutes distributed generation. Such a defmition, with clear explanation of DG operators' technical and commercial bonndaries within the DNOs geographical area, must be included in the overall electricity reform bill that will give legal backing to the restructuring and nnbundlingof the electricity industry For example, a DG owner may be mtricted to a point-topoint radial connection to serve the demand requirement of a properly recognised load (eg an industrial plant). In consented cases, the agreement allows for any excess energy produced to be split or passed on to the DNO network at a mutually agreed quality and time. Standadisation may be considered in this regard. Appropriate legal and regulatory codes must he set up. These codes will be the basis for legal contractual arrangements that govern the interactions between a DG operator and a DNO. The codes must govern design codes such as connection standard,metering and payment, as well as ancillary services such as voltage support, backup reserve and load management. They must also cover island operation and dispute resolution between the parties. When a DG operator connects to DNO assets the charging principles and mechauism should he clearly defmed. This should be reviewed annually to make it relevant to changes taking place in the industry and wider society The regulatory body must be empowered to monitor the implementation and operation of these codes and serve as arbitrator in times of dispute. For smooth operation, complex or deliberate loopholes in the codes should be avoided. Finally, information should be openly available on network designs and expansion, to facilitate true competition in the supply of power to industrial customers. This will ensure a level playing field between distributed generators and DNOs. As Nigeria proceeds with the deregulation of the electricity industry and privatisation of NEPA, it isessential to learn from the experiences of other developing and developed countries, and adapt these to the local environment. A careful evaluation of local issues, the concerns of DG owners and the peculiarities of the development of Nigeria electricity industry should be carried out. To make the overall process of deregulation a success,a legal fmmework must be developed that gives due weight to the benefits of distributed generation. E Abimbola Odubiyi is with Powergen UK. Covenby, CV4 8LG. UK Innocent E David-" is with the School of Electrical & Electmnic Engineerin& Universityof Natal, Durban, 4041, South Africa