Coal news and updates

A huge number of nationals and foreigners is bidding for licenses to generate electricity from Nigeria's abundant coal deposits, the Nigerian Electricity Regulatory Commission (NERC) has said.

 

Also, investors are now preparing to commence construction work on the $5 billon Itobe coal power project, which has been broken down into four phases and is expected to generate a total of 1,200mw of electricity when the four plants are completed.

 

Nigeria has about 2.8 billion metric tonnes of coal deposit, which has remained untapped for years. Speaking at the weekend in Abuja when the commission issued four licenses to four firms to generate electricity from coal at Itobe, Kogi State, NERC Chairman, Sam Amadi, noted that there was a growing interest to generate power from Nigeria's untapped coal deposits.

 

The licenses were issued to Itobe 1 Coal Power Limited (for 300mw), Itobe 2 Cola Power Limited (for 300mw), Itobe 3 Cola Power Limited (for 300mw), and Itobe 4 Coal Power Limited (also for 300mw). The four companies are owned by Zuma Energy Nigeria Limited, which had previously secured license for a 1,200mw coal power plant.

 

According to Amadi, "Zuma Energy Nigeria Limited has license to produce a total of 1,200 megawatts power from coal. Subsequently, Zuma has come to us to further amend the license to enable fast approach to implementation. The most important thing is that Zuma is a pathfinder.

 

"Up till now, we didn't have any prospect of generating power from coal. Today, the prospect is very bright. Apart from having the single largest indigenous license for power in this country as at today, Zuma holds the largest stake in local electricity generation, having 1,200 megawatts license for coal and about 400 megawatts of thermal power in Egbema, Imo State. So, the firm is a major stakeholder."

 

He stressed that many other firms have applied for licenses for coal-to-power, adding: "The good thing about the Zuma project is that since then, the commission has had more people come up for coal license. Just three weeks ago, we gave license to a new IPP developing about 500mw of power from coal.

 

"That means that the prospects are getting better, because the likes of Zuma took the trouble to go through this tunnel, but now we know that the prospect of generating more megawatts from coal is high. Just yesterday, a group from Lagos met me and want to generate from coal."

 

"Clearly, Nigeria is moving to a diversified energy mix. We have other licenses on solar, wind, and now a major load-base likely from coal in the next couple of years. I want to implore other Nigerian entrepreneurs to take the opportunity to explore not just gas, but solar and other renewable sources of electricity.

 

"As you know, before now the prospect of getting a Power Purchase Agreement (PPA) was very remote. But now, with all the work done in de-risking the market, we believe that all our licensees can go to financial close as quickly as possible and get a PPA and move to site."

 

Chairman of Zuma, Dr. Innocent Ezuma, stressed that the initial license for 1,200mw coal power generation was broken into four smaller licenses for ease of implementation and financing.

 

"Basically, the licenses were broken down for ease of implementation. As you may understand, to build a megawatt of coal power station, you require about $3 million. If you are building 1,200mw, you require approximately $5 billion," he told newsmen at the weekend.

 

"The sub-division of this main license means that we can embark on two projects at once, we will not wait for the first one to complete and reach the COD before we go to the second one."

 

He added: "At this time, because of the very good and credible rules and regulations that NERC has provided for NBET, as soon as we have PPA for the four power companies, there won't be any problem with financing, because the tariff we are adopting is MYTO 2 tariff, which is cost-reflective."

 

 

Source: http://allafrica.com/