Akinwole Omoboriowo II Chief Executive Officer(CEO) Genesis Electricity Limited(GEL) Africa

Akinwole Omoboriowo II Chief Executive Officer(CEO) Genesis Electricity Limited(GEL) Africa

Hybrid Power Solution for Large Industrial Customers

DISCUSSION TOPICS Electric power availability in Nigeria Off-grid Power Generation defined Off-grid Power Generation and Grid Generation Hybrid COSTING/PRICING MYTO vs off-grid supply Advantages of off-grid hybrid power solution Government policies and hybrid power solution Government financial support and hybrid power solution. Conclusion

ELECTRIC POWER AVAILABILITY IN NIGERIA Energy from Combustible Waste (%) World % Without Electricity 80 60 40 20 0 Source: International Energy Agency Egypt Brazil India SSA 0 20 40 60 80 Electrical power production has increased from less than 1.8 GWh in 1971 to over 24 GWh in 2010.

ELECTRIC POWER AVAILABILITY IN NIGERIA Cont d Electrical power production has increased from less than 1.8 GWh in 1971 to over 24 GWh in 2010. Hydro electric continues to play a significant role, although it has dropped from accounting for 84% of power produced in 1971 to just 27% today.

GWH ELECTRIC POWER AVAILABILITY IN NIGERIA Cont d 30.00 25.00 20.00 15.00 10.00 5.00 - Nigeria Total Electricity Consumption 1971 1981 1991 2001 Oil Sources Coal Hydroelectric Natural Gas Source: International Energy Agency Yet, despite the growth in power production, more than 70 million Nigerians (about 46% of the population) are estimated to be without any electricity.

ELECTRIC POWER AVAILABILITY IN NIGERIA Cont d At about 4,000MW of generating capacity, Nigeria s per capita power consumption of 84kwh is one of the lowest in the world and lags behind the average for Sub-Saharan Africa. Russia South Africa China Brazil SSA India Nigeria Per Capita Power Consumption 0 2000 4000 6000 8000

ELECTRIC POWER AVAILABILITY IN NIGERIA Cont d Going by the average per capita consumption for SSA of 4,000Kwh, power generating capacity in Nigeria should exceed 9,000MW while using the average 6,317Kwh per capita for Russia will predict 100,000MW of generating capacity for Nigeria. The U.S is estimated to have 12,000Kwh of Per capita consumption

ELECTRIC POWER AVAILABILITY IN NIGERIA Cont d 60% 35% 10% Industry Share of Power Consumption 1970 1995 2010 BRIC Africa World Nigeria Industry Share of Power Consumption 0% 20% 40% 60% 80% Inadequate power supply has had significant impact on economy as industries use of electrical power has dropped from over 60% to less than 20%, as most industries have resorted to self generation of power. Source: International Energy Agency

ELECTRIC POWER AVAILABILITY IN NIGERIA Cont d 30000 25000 20000 15000 10000 5000 0 Sources of Power In Nigeria At estimated N80/KWh, Industries pay 4x the current tariff for power while getting 1/10th of the power they need from public utility 10x 3 1 8 9 N/kwh Source: International Energy Agency, Proglobal estimates 35 30 25 20 15 10 5 0 Less than 50% of electrical energy consumption comes from public utility, implying major reliance on self generation Yet, self generated power is costing Nigerian's approximately 4x current Average Utility Tariff of N23/Kwh across Nigeria

ELECTRIC POWER AVAILABILITY IN NIGERIA Cont d 100% 75% 50% 25% 0% Sources of Power By Consumer Type Public Electricity Oil Products Gas Source: International Energy Agency, Proglobal estimates Assuming 20% of energy consumed from combustible waste can be substituted with electricity, current pentup demand for power in Nigeria will exceed 30,000MW, approximately 10x current consumption.

millions WHAT LED TO THIS DIRE SITUATION? $500 $400 $300 $200 $100 Power Sector Investment $0 1974 1979 1984 1989 1994 1999 2004 Investment in Power Inflation Adjusted Oil Prices Source: Nigeria Ministry of Finance, fintrend.com Available Generation Capacity Private, 1484, 29% Governm ent, 3608, 71% Hydro, 2206, 43% Thermal, 1402, 28% $90 $65 $40 $15 Source: Nigeria Bureau for Public Enterprises Significant under investment over the last 30 years as a result of declining revenues from oil, decades of military rule and massive corruption. Significant government presence all discos and 71% of generation capacity are government owned leading to inefficiencies and waste $0 -$500 -$1,000 -$1,500 -$2,000 PHCN Cumulative Operating Loss 2002 2006 2010 Source: Africa Finance Corporation Years of continued operational losses implied power company unable to generate capital to become financially sustainable

OFF-GRID POWER: The Nigerian Example Captive Power generation is the generation of electricity exceeding 1MW for the purpose of consumption by the generator, and which is consumed by the generator itself, and not sold to a third party. Off-Grid Generation is power supply to a collection of off-takers within a defined area, such as Industrial Park or Housing Estate, via a single source Source: Nigerian Electricity Regulatory Commission

POWER GENERATION HYBRID FOR INDUSTRIAL CONSUMERS It is a know fact that the grid cannot sufficiently meet the electricity demand of the industrial activities in the country hence; the need for hybrid power generation. Factors necessitating hybrid power generation: Limited Generation capacity Limited Transmission capacity Limited and degrading Distribution capacity Poor maintenance of existing infrastructure.

(NGN/kWh - nominal) 30 25 20 15 COSTING/PRICING MYTO vs 27.1 OFF-GRID SUPPLY 5-Year Projected MYTO Average Tariff 24.8 25.0 25.5 26.8 MYTO is expected to stay above N25 per KWH for the next 5 years. 10 5 0 2012 2013 2014 2015 2016 Generation Tariff Transmission Tariff Distribution Tariff Transmission Losses Distribution Losses Non-Tech Losses Source: International Energy Agency, Proglobal estimates Compare this to the possibility of having OFF-GRID power delivered to an Industrial Zone at circa N30 per KWH.

ADVANTAGES OF OFF GRID GRID HYBRID POWER SOLUTION Complete elimination of over 40% of MYTO tariffs attributable to transmission, distribution and generation inefficiencies in grid; Ability to control generation costs depending fuel type, efficient power plants and efficiency of operation;

ADVANTAGES OF OFF GRID GRID HYBRID POWER SOLUTION CONT D Clean and qualitative power generation for industrial application; Uninterrupted Electric Power availability; and Less pressure on existing grid infrastructure hence, freeing up capacity for other users

GOVERNMENT POLICIES AND HYBRID POWER SOLUTION The Nigerian Electricity Regulatory Commission (NERC) is empowered to regulate Off-grid power supply through licensing.

GOVERNMENT FINANCIAL SUPPORT FOR HYBRID POWER SOLUTION. The Federal Government of Nigeria through the Central bank of Nigeria (CBN) has provided financial support for potential off-grid and Grid connected Power system via the establishment of a Power Intervention Fund. This fund is constantly accessed for the establishment of Off-Grid and hybrid power system.

CONCLUSION Hybrid of Off-grid and Grid power supply is competitive to public utility and industrial power supply The EPSR Act protects Off-grid power supply through licensing Deployment of off-grid generation can be done on fast-track basis (6months or less) The Nigerian Model can be replicated across West Africa, with modifications where relevant

QUESTIONS?

THANK YOU!