Friday, July 24, 2009

Bringing power to the people of the Niger Delta

We have had quite a few posts lately about the armed conflict in Nigeria. The rebel factions have fought the government over frustration from having little or no access to basic services or to the oil revenues.

An article we found in Ethical Corporation Magazine touches on some projects that have helped to bring power to the people of the Niger Delta. Writers Emma Wilson and Brian Shaad also suggest some ways that more progress can be made in the region.

Total’s Egi Electrification Programme is an IPP and a community development project undertaken in partnership with the Nigerian National Petroleum Company (NNPC). The aim is to provide uninterrupted electricity to all communities of Egi District in Rivers State, in the Niger Delta.

A 13 MW independent power plant uses associated gas from the nearby Obagi field. The plant generates electricity that is distributed through a local transmission network.

The project includes the renovation, expansion and activation of the electricity network in communities already connected to the grid, and a new transmission network to bring more communities onto the grid.

The Bonny Utility Company is different example of collaboration between industry, government and the community, on Bonny Island in the Niger Delta. Power is generated from a turbine using gas from the liquefied natural gas (LNG) facility.

The local government has provided land and tax breaks. Local industry partners including NNPC, Shell, Total, Eni and Mobil subsidise the power services.

Electricity is supplied free up to an agreed limit. Above this, every customer can obtain additional services at a subsidised rate via a pre-payment model. (About 20% of customers use just the free electricity)

Over 75% of the utility’s employees are taken from the local population and there is a policy of preference for local contractors. The community is also involved in the running of the utility via the Bonny Kingdom Development Committee.

We suggest three scenarios for international oil and gas companies in facilitating local access to energy, based on level of commitment to tackling energy poverty and climate change.

The basic step is to improve current practice, while focusing on core business opportunities, for example by engaging meaningfully with local people and diverting associated gas for local energy needs rather than flaring it.

Pushing the boundaries a little further, large oil and gas companies might engage in innovative partnerships with governments, donors, NGOs and communities and direct social investment funding not only towards gas-based projects, but also towards renewable energy projects.

A more radical approach might entail establishing sustainable community-based utilities for decentralised power generation (using gas or renewables) and taking a more decisive role in the policy arena to promote investment in low-carbon energy systems and energy efficiency.

If international oil and gas companies are to engage in tackling energy poverty, they can’t do it alone. They and development practitioners need to overcome their traditional reluctance to collaborate on such initiatives.

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