The Senate Joint Committee on Gas and Power, Steel Development and Metallurgy in 2017  demanded the suspension of the inauguration of the 215MW Kaduna Power Plant following a disagreement with the Ministry of Power, Works and Housing over its plan to run the plant on diesel.

They were spot on. 

Guess what In 2018. The Federal Government of Nigeria Budgeted N678m for FUEL AND O&M FOR COMMISSIONING AND OPERATION OF KADUNA POWER PLANT. How they managed to approve these funds calls for concern. It means they have always embarked on eye service. 

This cash will be thrown away because less than  50% will be recouped on operating the plant at whatever capacity.

The cash budgeted for the plant in 2018 cannot fund 1MW network fired by diesel in a year. 

1 MW network will consume 2.5 Million litres of Ago in a year. By the time you add other costs you re running at a loss. 

When they know we live in a country where we need all the money available.

Running a 215MW or 215,000kW on Diesel for 1 hour will bring cost to I litre of Diesel produces around 3-4kWh of Energy that is an average of 3.5kWh energy depending on the efficiency of the generating set, they type of Diesel used and the type of professionals working on the Engines.

3.5kWh =1 Litre of diesel 

215,000kWh  = 61,427litres of diesel to run every hour and a total of 1.2million litres if running at 80% capacity 

734,000 litres if running @50% capacity

294,000 litres if running @20% capacity 

Average cost of diesel is N200/litre

@80% we will be spending N240m/day on diesel

@50% we will be spending N147m/day on diesel

@20% we will be spending N59m/day on diesel

From my 7 years experience on Energy Generation using Diesel fired engines the Cost of maintenance ranges between (N30,000-100,000)/2 MW for diesel fired generator embarked upon every 250hours to prevent against breakdown.

Maintenance on 215MW generating network will cost around N8.5million  /250hours.

A standard Generator has a life span ranging between (15000- 40,000) hrs of the engines) cost of routine maintenance will be N935 million excluding major breakdown will amount to about N0.15k /kWh if 215 nos of 1MW are synchronized. 

Energy cost using diesel is calculated as follow

Diesel cost N200/litre

35% energy conversion

Cost of plant is N78.5bn

This can be recouped back over 27500 hours if running @ 80 capacity via depreciation cost. This will be N13.19/kWh over 27500 hours against 80% generator capacity.

It would be a waste of money if a plant is built and it is not running at full capacity.

(0.35 x 200) + N13.19+ 0.15/kWH

Cost of Energy will be N83.34/kWh at generation without margin. 

Sellers margin can't be less than 10% taking the cost to N92/kWh

As I write Energy is sold averagely between N24-36/kWh 

Who will bear the loss of N62/kWh that is 207% loss to Tax Payers if the same energy is pushed to the grid to and sold at N30/kWh?


Ettu Mohammed writes from Lagos

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