On Nigerian Power: a Brazilian Case Study.

So today I was looking at a few companies, and saw one that made me think of the electricity industry in Nigeria. It’s a Brazilian power company known as  Companhia Paranaense de Energia which translates to “Energy Company of Parana”. Parana is one of the 26 states in Brazil, with a population of about 10m people, so roughly the population of Lagos in 2010, although they have much, much larger land mass (more than 199,000 km squared which makes Lagos 3600km squared look like a footnote). The company, known simply as Copel, has the exclusive mandate to generate and supply electricity exclusively to the state of Parana. Founded as far back as 1950s, the company today employs 8,000 people, is currently traded in the NYSE at a $4.1 billion valuation, and has an annual net income of around $400 million.  For powering just 10m people, their homes and their offices. How many people are in Lagos again? Anywhere from 11m according to UN, to 21m according to New York Times. Do we have a $4billion private power company lying around anywhere? I haven’t seen it.

For 10 million people, Copel generates close to 4500 MW, according to their latest annual report. Nigeria is struggling to generate 1300MW for the whole 160 million people. Think about that. Consider that kind of differential. It’s a miracle we have a manufacturing industry. Or any industry at all. Every single person doing business, especially manufacturing work, in Nigeria is rolling a boulder uphill. They are superheroes, confirmed. No one, anywhere in the world would accept that as normal.

Whenever we ask about why power doesn’t work in Nigeria, they give us two reasons: pipeline infrastructure doesn’t exist to send natural gas to plants, and the second, the water level in Kainji dam isn’t always enough to generate all the power needed. Fine. I accept. But how come since Kainji dam was built, it has run on 8 turbines versus the 12 it was originally designed for? No one knows.

Back to Copel. How do they generate 4500MW for Parana State? They have 18 hydro electric power stations. Granted, Brazil has many more rivers than Nigeria does, but remember, Parana is just one state. A lot of the dams are built on the same river. From just a preliminary look, I counted 5 hydroelectric dams on the Iguazu River alone: Salto Osoro, Salto Santiago, Bento Munhoz, Ney Braga and Jose Richa. Look them up if you want. The good thing about these dams is that once built, they create artificial lakes that support fishing communities and aqua tourism. What stops us from building more dams on the Niger and Benue rivers? I don’t know. We know we’re not upstream, there won’t be any countries we’re hurting like Mali or Niger would if they dammed the whole thing up, it’s basically the Atlantic Ocean getting whatever we let go of. And dams fill up and get back to flowing. And they don’t have to be big dams, per se. My point is, we could do it, if we wanted. There was some talk of it, even but as we speak, I’ve not heard a thing.

But let’s agree that we can’t dam the Niger enough to generate 4500 MW steady power, at the bare minimum. We do have other options. Copel has over 8 thermal stations. Basically, they use steam to drive the turbines. The fuel used to drive the boilers that generate the steam is between nuclear, natural gas, and coal. Letting our government anywhere near nuclear is suicide, so that’s out of the question. Natural gas has been flaring away in the Delta for more than 50 years. Flaring away. Enough power to well, power industries. Being burned into the sky, day and night. Like this:

Flare

Or like this:

Gas flare

All over the place, 24 hours a day, 7 days a week, nonstop for years on end. Nigeria at night looks like this, and it’s not electricity (except maybe Lagos). It’s gas flaring away.

Naij flare

In all those years, did our government save up some money, approach some foreign companies to partner with, or banks to raise money, to build out a pipe infrastructure? Of course not. But we’re topping the leagues at popping champagne globally. I’m not sure what we’re celebrating, our ability to major in minors perhaps.

I’ve been hearing whispers of certain bigshots talking to certain other big shots from across the ocean to maybe finally build pipelines. Better late than never, but I guess we’ll see.

Okay, so what about the third ingredient to supplying power to a thermal station, which is coal. To be honest? I have no idea. I grew up learning that we had piles and piles of the thing lying around Enugu or something. I’m not sure what happened to it. I thought perhaps it haff finish* but a cursory look at Google tells me there’s still 2 billion metric tons of the thing there. Most of the mines aren’t functional. The few that do ship what they mine to Europe. I don’t get it. Can’t anyone truck coal to any power plant in Nigeria? Apparently, we have none. There’s one that is just being built in Kogi state right now and will likely go live after 2018, according to terms signed with former President Jonathan’s government. So for decades, we had coal and no one thought to use it to generate electricity. *facepalm*

The final observation I made is how Copel’s geographic area is well defined. No generating power for the national grid, which then gets routed all over and back. The country was chopped up into municipalities and each power company marks a defined territory and supplies all the power it can generate from the resources around it. What it can’t get it buys from other states or the national grid. It’s very similar to what they do here in the States as well. And from what I can tell, Nigeria is moving to that model, especially with distribution and increasingly, generation. We need to hurry up about it. There’s something about having a face and a name attached to the services you get who you can land the blames squarely on. NEPA, or whatever it’s name was changed to use to be that, but it was too far away and always blamed everything on Kainji. Let each area solve their own issues themselves so when one messes up, people can see it and know where the issue is coming from.

On a closing note, I want to point out that Jonathan did move the needle. He finally passed through the privatization and power reform thing. Some companies are entering the field, the Kogi coal plant to be finished in 2018, the Geometric/GE joint plant which is expected in 2019, these things naturally take time. But I hope our government does more, invests more, gets its act right with rail and pipelines and more.

Let’s stop acting like it’s normal for 160 million people to hustle over 1300MW of power where somewhere in Brazil, 10million people are drowning in 4500mw and Copel is cashing out.

I thought Nigeria no dey carry last?

Peace out.

AK.

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2 thoughts on “On Nigerian Power: a Brazilian Case Study.”

  1. Great article, the problem of power in Nigeria is more political than implementation. I think too many make money from the lack of power, so they really don’t want to do anything about it. That aside, I believe there are so many solutions. Thermal, solar, wind. All these resources we have in abundance. But once someone wants to build any, there is always the problem of regulation here and there, like they don’t want it to happen. I hope the new government would tow a different direction.

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