Sokoto IPP stalled despite gulping billions

The Sokoto independent electricity project has stalled for 11 years despite gulping more than four billion naira. The independent power project (IPP) was awarded at the initial cost of N3.8 billion by the Aliyu Magatakarda Wammako administration in November 2008, to provide 24-hour electricity to the state.

The project will generate 38 megawatts of electricity, to be completed within six months. The contract was awarded to the United States-based energy company, Vulcan Capital Energy, to be executed through a subsidiary partner, Vulcan Elvaton Limited. But over three years after it was built, the power plant couldn’t generate any electricity because of fuelling challenges.

During the test run of the plant on November 30, 2009, the director-general of the project, Mr Umar Bande, said the plant will consume 33,000 litres of diesel daily, which translates into 12,045,000 litres of diesel in 365 days.

The plant has a dual type turbine that can use diesel, gas or LPFO, according to state officials.

An energy expert, Mr. Kunle Danile, said that the Sokoto power project was ill-conceived, therefore bound to fail. “Any generating power plant designed for the mass market, and is diesel-driven, can’t be sustained,” he said. When contacted, Sokoto state officials only repeated the same story of over three years ago, indicating that the plant is a white elephant project.

It’s observed that there was no sign of activity, with the entrance gates locked. Expensive power An earlier investigation revealed that the Sokoto State power plant will generate electricity at N178 per kilowatt, more than three times its price then, in the region.

Data from the Nigerian Electricity Company of Nigeria (NERC) shows the highest approved price for residential customers under the Kaduna Distribution Company (Kedco) which Sokoto belongs, is N45 per kilowatt. At the 33,000 litres daily estimate, findings show that the state will be spending an average of N6.8 million daily on diesel at a market value of N206 per litre. This means that the plant will consume N204 million worth of diesel every month. By this, the annual cost of diesel to be consumed by the plant is N2.47 billion every year which means it will be taking more than two-thirds of its worth on fuel every year. By the estimated 33,000 diesel per day, the plant will need to burn 868 litres of diesel to generate just one megawatt.

This means that at the 868 litre per megawatt consumption of the plant at a market value of N206 per litre will translate into the state government spending N178,808 for every megawatt.

Further analysis shows that at N178,808 cost per megawatt generation, the Sokoto plant will have to generate each kilowatt at N178.8. Kaduna Electric, whose network will convey the power to the Sokoto customers sells electricity at N45.76 per kilowatt hour, according to the 2015 MYTO for Kaduna electric approved by NERC.

And the highest cost of electricity per kilowatt hour in Kaduna zone is paid by the residential customer class (R4) at N45.76. Therefore, the power to be generated by the Sokoto plant will be above the reach of its customers. Completion dates flip-flopping over the years on how the project, scheduled to be completed within six months in the first quarter of 2009, was stalled for 11 years now, over what state officials described as “unforeseen circumstances.”The deadline was first shifted to September 2009, later to December 2010 and to July 2011. It was then extended to September 2013 and later August 2014, and the dates keep changing.

As of November 2016, the Chief Operating Officer of the contracting firm, Vulcan Elvaton Ltd, Mr Franklin Ngbor, said the turbine of the plant had already been tested three times. He said the synchronisation of the plant with the fuel tank and the main evacuation line, down to the transmission line was the only thing remaining.

But three years after, the fuelling challenge is yet to be overcome, thereby stalling the project. Insiders told Daily Trust Saturday that the state government contemplated the use of diesel as Mr Bande said, but the cost, logistics, safety and even availability of diesel dissuaded them from that option.

Another option weighed by the officials was fuelling the plant with compressed Liquefied Natural Gas (LNG). Mr Bande said that time that they contemplated using Goronyo Dam to power the plant but discarded the plan because of studies which show that a lot of money would be spent and that it would not be economical. Nothing much to worry about – Commissioner When contacted, the state commissioner for energy and petroleum resources, Aliyu Balarabe Dandinmahe, said there is nothing to worry about the project because “it is actually nearing completion and we have achieved about 96 percent stage of completion.”

“It is just finishing touches remaining. Technically, it is just connecting the fuel tank to the main generator, connecting the other accessories, that is the remaining thing, that is the technical aspect,” he said, almost repeating what the contractor said three years ago.

Speaking on the cause of the delay, the commissioner said: “There is nothing much to worry about, only that the contractors whose foreign partners would have to come from abroad, stayed away during the election, they said they were waiting for elections to hold.” “They came, they re-assessed the project and went back. we are waiting for them to come back and do the remaining work,” he said, adding: “Now that I’m back to the office, I’ll invite them and hear from them when they’ll come back.” What Sokoto should do – Expert Mr Kunle said what the state government should have done was to improve its power distribution network by asking the Transmission Company of Nigeria (TCN) to step down more 33KVA lines in the zone.

“It is not profitable to use the diesel-driven plant to generate power for the mass market. It can only be profitable if you use the energy to produce commodity which Nigerians have no option than to buy. Even at that, the cost of the commodity must be high,” the energy expert said. He said considering fuelling the plant with diesel is almost impossible because the state has to use its meagre resources to subsidise the energy to the consumers.“The cost of the energy to be generated is exorbitant. We all said this when it was started. Nobody can buy it even if produced. The state can’t sustain it,” he said.


Source: Daily Trust



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