Finland’s Wartsila, who provides smart technologies and lifecycle solutions for energy and marine businesses, is ramping construction of fuel plants that can be integrated with renewables to help industries resolve energy challenges and compete.
“The intermittent nature of renewables means they may not be best suited for baseload power, so we have designed solutions built around Engine Power plant where gas or other fuel source available can be integrated to help industries,” said Wale Yusuff, the company’s Nigerian managing director in an interview with BusinessDay.
For over a decade it has been in Nigeria, Wartsila has developed an engine installed base of around 500MW for land-based solutions, and another 400MW in marine/offshore environment in Nigeria.
However, Yusuff said the company’s solutions are not just limited to industries, “Our focus is wherever there is a requirement for power, with the right off-takers and necessary guarantees in place. We are discussing now with the government, utilities and IPP projects developers,” said Yusuff.
Wartsila, envisions a future where energy is sought 100 percent from renewables. It also seeks to support efforts in securing flexible power generation that will keep the grid stable.
As the price of both solar PV and wind continues to fall, and as they remain immune to fluctuations in different fuel prices, Wartsila sees opportunities integrating them into plants to lower the blended cost of power.
Nigeria’s distribution companies can see opportunities in ramping investments in embedded generation but this is not yet happening. Yusuff attributes this to challenges including a tough business environment and the economics involved in sustaining the arrangement.
“There was a time the DisCos took on the embedded power generation initiative but it never came to fruition. In business transactions, there is a requirement and a proposed solution, if they both match, then the business can be done. I think what has really happened is that the conditions are not favourable yet. It is not lack of technology or finance, but the bane of the industry, is the lack of the right policies such as cost-reflective tariff, appropriate gas pricing, amongst others,” said Yusuff.
Yusuff also said that investments in power solutions are long term so there needs to be a solid power purchase agreement backed with adequate guarantees in place as well as security for the feedstock to achieve desired output.
“These are some of the things the financiers will want to see. If all these ingredients are not there the projects will not materialise,” said Yusuff.
The company’s boss further said that decentralised power is critical to solving Nigeria’s energy deficit. He also called for a review of gas pricing and more synergy between government agencies, regulators and the operators.
“Wartsila does not just manufacture the engine, it has the capacity to deliver projects on EPC/turnkey basis, providing O&M as well for the entire life of the plant. Our offerings are however flexible as well. We can deliver from basic equipment supply to full turnkey solutions. We are ready to support the government’s efforts in the delivery of reliable, quality and efficient power to the people of Nigeria, Yusuff said.
