Manufacturers’ self-generation energy capacity reaches 13,223MW

Without relying on any external power supply, manufacturers now have the capacity to generate up to 13,223.67 mega watts (MW) of electricity, according to the latest survey carried out by the Nigerian Energy Support Programme and Deutsche Zusammenarbeit (GZ).

The survey, which was based on 2013 indices, revealed that in spite of this capacity, local manufacturers can only produce 8,708.85MW of electricity, even though the maximum capacity of their plants is 13,460.48MW.

“It is great news that manufacturers alone have the capacity to produce such enormous mega watts of electricity,” said Adeola Adenikinju, professor at University of Ibadan, who was part of the preparation of the survey funded by the European Union and the German government, during the presentation of the report in Lagos.

“You can see that the excess (difference between capacity and actual production) of about 5,000MW is about the same as what Nigeria produces,” Adenikinju said.

A break-down of the report entitled ‘Survey of Power Demand and Energy Consumption in the Industrial Sector in Nigeria’ shows that the basic metal, iron/steel and fabricated metal product sub-sector has a self-generation capacity of 1,443MW but produce 1,023.42MW. But the maximum capacity of plants in the segment is estimated at 1,640.58MW.

The chemical and pharmaceutical sub-sector has the largest self-generation capacity of 3,153.28MW, largest self-generation produced of 1,921.53MW, and biggest maximum capacity of plants which is 3115.38MW.

Similarly, manufacturers in the domestic and industrial plastics/rubber and foam have the self-generation capacity of 2,051.10MW, but actually produce 1,491.42MW.

However, the maximum capacity of plants in the segment is estimated at 1,949.34MW, according to the report.

In the electrical/electronics industry, self-generation capacity is put at 818.10MW, while self-generation produced is 528.23MW. But the maximum capacity of plants is estimated at 917.08MW. The food, beverages and tobacco sub-sector has the self-generation capacity of 2098.11MW, while they actually produce 1347.24MW, though its maximum capacity is estimated at 2023.95MW.

Also, the motor vehicle and miscellaneous assembly industry has the capacity to generate 853.74MW of power but self-produces 581.40MW, even though the sub-sector has the maximum plant capacity of 806.31MW.

Again, the non-metallic products sub-sector has the self-generation capacity of 716.86MW of power, produces 389.82MW, but has a maximum plant capacity of 727.81MW.

Furthermore, the pulp, paper, printing and publishing industry can generate 827.79MW, produce 610.08MW, though it has maximum plant capacity of 1024.59MW.

Also, the textile, apparel, carpet, leather/leather footwear sub-sector has the self-generation capacity of 738.51MW, self-generation production capacity of 468.65MW as well as maximum plant capacity of 718.94MW.

The wood and wood products (including furniture) industry has the least energy generation capacity of 523.18MW, self-generation production capacity of 347.06MW and maximum plant capacity of 536.50MW, according to the report.

“The amount of energy is huge,” said Reginald Odia, chairman, Manufacturers Association of Nigeria’s Economic Team.

“It shows the efforts manufacturers put into the economy to grow it,” Odia said.

Manufacturers use mainly gas and diesel to generate energy for their operations. Some multinationals also have captive power plants for this purpose. Local manufacturers resort to self-generation as the newly privatised electricity is yet to yield positive results. According to MAN’s January to June 2014 economic review, number of power outages in industrial estates within the period averaged six hours per day, while the average hours of electricity supply to manufacturers was only four hours per day.

Lafarge Africa has entered into an agreement with International Finance Corporation (IFC) and Wärtsilä to have sufficient energy supply to its factory and have approximately 260MW for the national grid and other firms, according to Guillaume Roux, group CEO, Lafarge Africa plc.

Power is essentially the greatest problem of Nigerian manufacturers, as energy spend constitutes 40 percent of their costs. Many firms such as Honeywell Flour Mills have not relied on public power supply for over 10 years, because power outages interrupt the production process and lead to damage and huge losses.

The Nigerian Electricity Regulatory Commission (NERC) recently reduced electricity tariffs by 50 percent amid pressure and complaints from manufacturers and other consumers.

But Frank S. Udemba Jacobs, president, MAN, said the reduction was not enough as the body was asking the NERC to revert to the Multi-Year Tariff Order (MYTO 2.0) previously in place, as against MYTO 2.1, which has been in use recently.

ODINAKA ANUDU