With an installed capacity of 1,020 megawatts, the Sapele power plant is only able to contribute between 165MW and 265MW to the national grid. DAYO OKETOLA examines the problems and challenges awaiting the incoming owners
With power generation dropping by 1,074 MW from a peak of 4,517 megawatts attained on December 21, 2012 to 3,443MW on Tuesday, the need for all the power generation stations in the country to work at full capacity has once again come to fore.
But this is not immediately possible for the Sapele Power Station, one of the six Federal Government-owned generation stations being sold to core investors in the ongoing power sector reform and privatisation programme.
Though it is the second largest in the country in terms of installed capacity, it has been operating sub-optimally since 2010 because its operations have been hampered by low maintenance and poor funding.
Notwithstanding its six units of 120MW steam turbines, which can generate a daily average of 86.72 MWH/H and four units of 75MW gas-fired turbine with a combined capacity of 300MW, the plant’s capacity has dropped from 1,020 MW installed capacity to between 165 and 265MW.
Investigations revealed that only two of the six steam turbine units were operational at the moment, while none of the four gas turbine units was operational.
Though at optimal output, the plant generates some 972 MW of electricity, the Chief Executive Officer, Sapele power plant, Mr. Reginald Ifionu, attributed the plant’s capacity loss to poor funding, maintenance, outdated equipment and difficulty in sourcing spares.
The problem of inadequate gas supply, according to him, has further hampered the operations of the power plant.
The Sapele power plant boss attributed the dwindling capacity of the power station to continued use of the pneumatics instrument and control system, rather than digital instruments. He said because the equipment was archaic and no longer readily available in the market, sourcing the spares had become challenging.
With new investors closing up to owning the power plant with an investment of $201m, Ifionu expressed optimism that the plant could be restored to full capacity by the new owners if necessary interventions were done.
The prospective owners, a Chinese-Nigeria-UK Power consortium, comprising China Machinery Engineering Corporation, Eurafric Energy of Nigeria, British Power International and First Bank Plc, won the bid to acquire 100 per cent equity in the 1,020 megawatts capacity power plant, with an offer of $201m.
Of this amount, the consortium had paid $50,250,000, being the 25 per cent of the share purchase price and would be required to pay the outstanding 75 per cent of the bid price within six months, as stipulated in the power privatisation guidelines before it can take over the asset.
Insisting on the viability of the power plant asset, Ifionu said all that would be needed to return the plant to optimal levels was a comprehensive restoration and upgrade of non-operational units.
“As earlier noted, the station has gone down from 1020MW initial installed capacity to between 165 – 265MW available capacity today. But there is a lot of room for improvement. The station has the greatest potential (in comparison to all other existing successor companies) for capacity recovery,” he said.
He confirmed that only Steam Turbines 1 (STO1 and STO2) were generating a combined output of 165MW but added that efforts were being made to bring back STO3 back on stream to add 100MW.
He said, “The strategy would be to keep units 1 to 3 running, howbeit as unreliably as they are currently doing, and effect a comprehensive restoration and upgrade of one of the other non-operational units. When this other unit has been restored to guaranteed sustainable and efficient commercial operations, (with up-to-date instrumentation and controls), then we can shutdown any of units 1 to 3 for similar treatment.”
According to him, the idea is to have some revenue inflow to sustain staff holding while supporting cost demands of capacity recovery.
Ifionu said by the end of April, when the STO3 would have resumed operation, the station’s total grid contribution to the national grid would rise to 265MW from the 165MW currently generated.
In spite of all the odds, the Sapele power plant boss reiterated that the power plant can be restored to full capacity if appropriate measures are put in place by its incoming owners.
For him, all that the new owners needed to do is to quickly execute a technical audit of the plant in its present state, to determine the scope, cost and strategy for total and comprehensive plant refurbishment and upgrade.
With good management, the CEO said the initial full refurbishment of a unit of the power plant should be accomplished within one year of project commencement – with adequate funding and committed contractors/service providers, adding that other units’ recovery projects would be accomplished within subsequent six monthly intervals thereafter.
Ifionu had earlier blamed the inability to upgrade the power plant’s old technology to financial constraints. For instance, he said the station’s budgetary proposal in 2011 was put at N4.8bn, but only N760m was said to have been approved, while only N468,000.00 cash backed.
But insisting that the power plant had a lot of prospects, Ifionu said only ST05 would need to be decommissioned because it was ‘beyond economic repairs.’ He, however, explained that the other units would need substantial investments for them to be adequately refurbished, with the necessary system upgrades.
“Only one unit (ST05) needs to be decommissioned as being beyond economic repairs. The other units will need substantial investments to get them adequately refurbished, with the necessary upgrades of systems such as instruments and controls, excitation, protection and metering and switch gears for sustained, reliable, efficient and safe grid operations,” Ifionu said.
He explained that only one of the three units of the plant ran at full capacity, while others have yet to commence full supply of electricity to the national grid due to gas shortage.
Shedding more lights on the issue of gas supply to the plant, Ifionu was emphatic that gas supply was expected to improve due to its proximity to oil and gas installations in the Western Niger Delta.
He explained that gas suppliers to the power plants were the major oil companies such as Shell, Agip, Total and Seplat Petroleum, an indigenous company, adding that Seplat could only provide the plant’s gas requirements at its current operational level of between 165-265MW.
He noted, however, that at higher output, Seplat would need to make substantial investments in new/additional gas production infrastructure to be able to meet projected generation levels in the coming years.
He further pointed out that the recently signed gas supply/purchase agreement was the necessary impetus to gas producers for such significant/costly investments. “The gas supplier (seplat) would have such bilateral arrangements. At present, we do not have other direct contracts,” he said.