Despite Nigeria's abundance of oil and gas, the minister of power says it is crucial that the country develops renewables and does not just rely on fossil fuels. A growing population is consuming more and more energy.
DW: Nigeria's total electricity generation capacity currently stands at around 6,000 megawatts compared to South Africa's 44,000. How is Nigeria going to increase its energy output?
Chinedu Nebo: Nigeria's population has been growing, and today we stand at about 170 million people in Nigeria. Although we have a much larger installed capacity - about 6,500 [megawatts] - generation right now is about 4,000 megawatts. We have had challenges with gas supply, much of it occasioned by vandalism of the gas pipelines, sabotage, oil thieves, etc. These incidents make it difficult for us to get enough gas going to the power stations. The government is doing everything to make sure that the issue of vandalism is behind us so that we have enough gas for even more power plants.
By the end of the year, we will actually be generating 6,000 megawatts, and before the end of 2015, we will be generating over 10,000 megawatts. And that will continue to increase in the next couple of years thereafter.
[Nigeria's] government has also privatized generation and distribution [of] infrastructure. Today we have issued more that 50 licenses to prospective IPPs [Independent Power Projects] and the dream is to get us to 40,000 megawatts in the next several years.
Are you saying that IPPs are the solution for the 60 percent of Nigerians who currently have no access to electricity? How do the two compare: public utilities versus IPPs?
The problem with public utilities is that people quite often take public utilities as a social welfare extension. That is not true. That is not sustainable. Nigeria continues to reel under a situation where we still have about the lowest tariffs in the whole of Africa. Our government believes the way to make this sustainable is by giving the generation and distribution aspects to the private sector and let the government continue to strengthen the transmission aspect which is the link between generation and distribution until such a time that that will also be privatized or concessioned as the case may be.
The government intends to encourage [investors], and that is why government has put the Nigerian Electricity Regulatory Commission in place so that the entire legal framework is according to global best practices.
What is the national energy mix your government is aiming for? I believe hydropower currently stands at just 1 percent?
The mix right now is skewed in favor of gas and it will continue to be so for a long time. Gas fire turbines generate about 70 percent of the Nigeria's power now, 30 percent is hydro power. Hydro will grow but not as exponentially as gas. As you know Nigeria sits on the 8th largest gas deposit in the whole world, but then, renewables are quite critical. Unless we strategically begin to develop renewables including hydro, solar, wind and power from bio mass, Nigeria will run into problems in the future.
The same thing goes for coal. In fact there are now coal mines in Nigeria producing coal and much of this coal is going to be used to develop energy by building coal-fired power plants.
I believe that, as we continue to go, we will eventually get a few thousand megawatts of solar [power] and then more thousands of megawatts of hydro [power] and then wind and bio mass will also come in.
You have mentioned the large stake of gas in the national mix. Gas flaring is a serious health risk and environmental issue. How is the government taking care of this problem?
Well, we had given deadlines to the oil companies. The problem with our gas development is that almost all the gas that is coming out is gas associated with oil. And because of the local cost of gas, many of these companies are not in a hurry to produce small [quantities of] gas for industries and for our power generation. So, what the government is now trying to do is to incentivize gas production companies to give them more incentives to produce gas.
Recently, there was a high level meeting of the Africa-EU Energy Partnership in Addis Ababa. Are you satisfied with the pace and momentum of this partnership?
We all want to see us move from talk to work. There is a lot of talk, there is a lot of discussion going on and on. We want to move, we want to see more dynamism in all of that, so that Africa can eventually move on and become like the rest of the developed countries of the world. I am happy that people are more serious about this now, but we really want to see action.