Biofuels Opportunities and Development of Renewable Energies Markets in Africa: A Case of Nigeria

Transcription

1 Biofuels Opportunities and Development of Renewable Energies Markets in Africa: A Case of Nigeria Presented By Abiodun Olaniyi, MREEEP;MREA;MCREN;MIKMI President,Centre For Jatropha Promotions & Biofuels (CEJAB) Lagos, Nigeria cejabng@gmail.com A paper presented during the Biofuels Market Africa 2007 Conference, in Cape Town South Africa on November 5-7,

2 CONTENT OVERVIEW OF AFRICA BIOFUELS MARKET BIOFUELS OPPORTUNITIES NIGERIA BIOFUELS MARKET RENEWABLE ENERGIES MARKET DEVELOPMENT IN NIGERIA FUTURE RECOMMENDATION CONTACTS REFERENCES 2

3 OVERVIEW OF AFRICA BIOFUELS MARKET Biofuels opportunities abounds in Africa. She stands as the platforms for the future of biofuels. Moreso,, the mass developments of renewable energies markets in Africa is very important to her inhabitants in the areas of sustainable development. Biofuels have been getting a lot of attention from Southern Africa to Western Africa in the past years. A lot of programmes had been initiated by various Africa countries governments on biofuels development and deployments. The Southern Africa are leading the pack on biodiesel development & commercialization using Jatropha oil. Many bioenergy companies(d1 oil Plc) had set up shops in Southern Africa countries. Infact the Southern African countries are the leading light on biodiesel and Jatropha plantation in Africa. However, the following countries have been identified with feasible projects on biofuels, South Africa, Nigeria, Zimbabwe, Tanzania, Zambia, Mozambique, Ghana, Burkina Faso, Niger, Senegal 3

4 NIGERIA BIOFUELS MARKET Globally the clean energy fever is being fuelled by three factors: fears over energy security, a growing concern over global warming and high oil prices. Oil provides over 90 percent of Nigeria s s foreign exchange earnings, even though the oil sector of the economy contributes only 30 percent of the GDP in comparison to 40 percent from agriculture. The country benefits from the rise in oil prices and the strategic importance of being one of the world s s largest producers of a vital product. Oil, however has not guaranteed ecologically and socially acceptable development in Nigeria. [5] 4

5 NIGERIA BIOFUELS MARKET (cont d) Presently, there are over 11 oil companies operating 1,481 wells from 159 oil fields in the Niger delta to produce 2.7 million barrels of crude oil each day. The bad news is the flaring of about 17 billion cubic metres of associated gas spewing 2,700 tons of particulates, 160 tons of sulphur oxides, 5,400 tons of carbon monoxide, 12 and 3.5 million tons of methane and carbon dioxide respectively in the process. Nigerians worry over the polluting practice of oil exploration, but do not often see this in the context of contributions to global concentrations of greenhouse gases. The finite nature of oil resources and the need to diversify the economy away from overdependence on the product is emphasized only in rhetoric. Over half a century since the commencement of oil exploration in the Niger delta the country imports more than 70 percent of domestic fuel requirements because none of the four refineries have functioned efficiently. [5] 5

6 CO 2 emissions increase in the earth s temperature 6 6

7 In addition the price of crude oil is escalating at incredible rate Iran (Nuclear issue) USD 100/bbl Currently there is war in Northern Iraq Oil Price ( USD/bbl ) Iranian Revolution Invasion of Iraq Invasion of Kuwait Lebanon War Militancy in Nigerian Niger Delta Yom Kippur War

8 NIGERIA BIOFUELS MARKET (cont d) Nigeria has the potentials to become the largest biofuels market in Africa if the enormous feedstocks at her disposal is well utilized. The question always asked is, why Nigeria a country that produces oil should be involved in biofuels promotion & production. Nigeria as a signatory to the kyoto protocol is obligated to implement the treaty in her territory. The effects of climatic change is so evident that any country refusing to take urgent steps may have herself to blame. Nigeria had through her National oil producing company partner with the Brazilian oil company( Petrobas) ) to integrate biofuels into Nigeria fossil fuels. 8

9 The Energy Situation in Nigeria The Energy Resources in Nigeria include: Crude Oil, Natural Gas, Coal, Tar Sand and Renewables (Biomass, Hydro, Solar, Wind, etc.) Current Estimated Oil Reserve in Nigeria is 35.9 billion barrels with daily production capacity of 2.4 million barrels of Crude Oil Natural Gas is estimated at 185 trillion cubic feet of proven reserve as at January 2006 (-( OGJ). The 35.9 billion barrels of oil in reserve will be depleted by years period. Coal demand and on oil reserve. Lignite Reserves are estimated at 2.75 billion tons. Renewable Energy (Biofuels) will increase supply and reduce the Source: Oil and Gas Journal,

10 NIGERIA AGRICULTURAL LAND AREA Nigeria s s total land area is 924million hectares, of this area 91 million hectares is adjudged to be suitable for cultivation. Approximately half of this cultivable land is effectively under permanent and arable crops, while the rest is covered by forest wood land, permanent pasture and built up area. Among the states which have the most abundant land area are Niger [7.6 million hectares] and Borno [2.8 million hectares]. In 1996, a total of 33million hectares were cultivated to crops generally; out of which 17.7 million hectares were for staples and 4.9 million hectares were for industrial crops. 10

11 LAND TENURE SYSTEM IN NIGERIA Land tenure in Nigeria is defined as the system of land ownership or acquisition by individuals, family, community or government agency either for temporary or permanent use. The system varies from tribe, community and state. It can be classified into the following groups: Communal land Tenure Inheritance Land Tenure Leasehold system Rent land Tenure Land Tenure by free gift or pledge Individual Land Tenure Tenancy at the will of government. 11

12 DATA ON AGRICULTURE (AREA OF NIGERIA BY STATES) STATES HECTARE SQUARE KM ACRES SQ. MILES ABIA ADAMAWA AKWA IBOM ANAMBRA BAUCHI BENUE BORNO CROSS RIVER DELTA EDO ENUGU FCT IMO JIGAWA KADUNA KANO KATSINA KEBBI KOGI KWARA LAGOS NIGER OGUN ONDO OSUN OYO PLATEAU RIVERS SOKOTO TARABA YOBE TOTAL

13 Agriculture Status and Land use in Nigeria Agriculture in Nigerian Economy (2002): Agricultural Exports-Imports Balance (2002): Agricultural GDP as share of total GDP 26.4% Agricultural Labour Force 31.0% Major Exports (share in Agriculture): Cocoa Beans 62.1% Cocoa Butter 3.8% Cotton lint 2.0% Total Exports US$ Million Total Imports US$ 7547 Million Agricultural Exports US$ Million (2.7%) Agricultural Imports US$ Million (26.5%) Agricultural Export-Import Balance US$ Million Major Imports (share in Agriculture): Wheat 17.6% Sugar, refined 10.1% Rice, Milled 12.9% Sources: FAOSTAT; World Bank World Development Indicators,

14 Agriculture Situation and Land use in Nigeria Non Arable and non Permanent 20% Agricultural Area 80% Others Commodities 10,3% Cocoa beans 2,2% Sugar Cane and Sugar crops 0,1% Beans, dry 11,0% Area harvested (1000 Ha) Cassava 8,4% Yams 6,4% Oil Palm Fruit equivalents 6,8% Groundnuts 5,9% Citrus fruit 1,5% º Sorghum 14,5% Rice, paddy 7,6% Starchy roots and tubers 1,5% Maize 9,1% Vegetables 2,3% Millet 12,5% Total Area Harvested (2004): (Approx 67% of Agricultural Area) ,0 Ha 14 Source: FAOSTAT FAO Statistics Division 2006, September 2006

15 The profile for the sugarcane and cassava ethanol projects to be pursued by NNPC. Sugarcane Integrated operation: Farm size: >=15,000-18,000 ha Cane production: 1.8 million t/year Irrigated Plant characteristics: Ethanol: >=70 million l/year Refined Sugar: >=110,000 t/year Self-powered: bagasse Cogeneration Cassava Integrated operation: Farm size: >=7,000 ha Cassava production: million t/year Likely irrigated Plant characteristics: Ethanol: >=50-60 million l/year Capable of handling 9,000 ha Self-powered using field waste; Out-grower scheme: <=1,000 ha (initially) Qualified for carbon credits Cogeneration if developed Ethanol guaranteed off-take by NNPC Investment requirement: $ million Farm: $ million (incl. land & irrigation) Plant: $150-$175 million Out-grower scheme: <=1,000 ha (initially) Ethanol guaranteed off-take by NNPC Investment requirement: >$39-45 million Farm: $4-5 million (excl. land & irrigation) Plant: $35-40million 15

16 Locations currently under consideration for NNPC sugarcane projects are in Benue, Taraba, Kwara and Gombe states and Ondo and Anambra states for cassava. Sokoto Katsina Jigawa Kebbi Zamfara Kano Yobe Borno Kaduna Bauchi Gombe Niger Adamawa Oyo Kwara FCT Nasarawa Plateau Taraba Osun Ekiti Kogi Benue Ogun Ondo Lagos Edo Enugu Ebonyi Delta Anambra Imo Abia Cross River Balyesa Rivers Akwa Ibom Sugar cane Cassava 16

17 BIOFUELS OPPORTUNITIES (Feed Stocks) There are a lot of biofuels opportunities in Nigeria owing to the large feed stocks she possesses i.e Cassava, Sugar Cane, Soya, Sweet Sorghum, Oil Palm, Coconut etc.. Nigeria is the largest producer of Cassava in the world. She also possess a great source for Jatropha Curcas and a good soil for plantation. Nigeria has the largest capacity for oil palm plantation which serves as a great source of biodiesel. 17

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19 JATROPHA Jatropha plant had been identified as a very important source of biofuels after palm oil. It had been used as bio-diesel and organic fertilizer in several European, Asia & African countries. The market for bio-diesel and organic fertilizer is growing but there are no enough raw materials to feed the growth. There are currently commercial plantations of Jatropha plants in Ghana,Mali,, Zambia, Zimbabwe, Tanzania and South Africa. Jatropha plants is widely found in Nigeria. The local names in Nigeria are botuje, pupa, lapalapa pupa, iyalode pupa, sherigun, okpokporu, olosa etc. It can be found in various communities in Nigeria, especially the rural areas. [1][ 19

20 WHAT IS THE GROSS INCOME THAT A HIGH PRODUCTION JATROPHA PLANTATION CAN GENERATE PER YEAR? is planning to plant a density of approximately 2,200 jatropha trees per hectare and its projection have been modeled on 10% gestation failure and an average yield of approximately 3.5 kg of jatropha seeds per annum per tree. However, have observed stronger yields of approximately 6.5 kg per tree per annum in areas with higher rainfall. 20

21 3.5kg x 2,200 trees = 7,700 kg of jatropha seeds per hectare 7,700 kg seeds x 33% oil = 2,541 kg of jatropha oil per hectare 2,541 kg of jatropha oil per hectare = 2,541 kg x 1, 12 = 2,846 liters jatropha oil 2,846 liters jatropha oil x 0.95 liters bio-diesel = 2,703 liters of bio-diesel 2, 703 liters of bio-diesel x N128 = N345,984 from bio-diesel sales per hectare N345,984 x 50,000 hectare = N17,299,200,000 gross profit That s s over N17 billion in bio-diesel sales per annum from just a 50,000 hectares high yield planting program 21

22 RENEWABLE ENERGIES MARKET DEVELOPMENT IN NIGERIA There are a lot of possibilities for the development of renewable energy market in Nigeria. Of all the modern renewable energy technologies, excluding large-scale hydropower,solar photovoltaic has shown the highest potential for early market development in the country. Indeed, a small market in imported solar-pv devices and systems now exists. More so, there are great future prospects for other renewable energies like Small Hydro power, Bioenergy,Wind energy in Nigeria. 22

23 Table 1: Nigeria s Renewable Energy Resources Energy Source Capacity Large Hydropower 11,250 MW Small Hydropower 3,500 MW Fuelwood 13,071,464 hectares (forest land 1981) Animal Waste 61 million tones/yr Crop Residue 83 million tones/yr Solar Radiation KWh/M2-day Wind 2-44 m/s (annual average) 23

24 Targets for Electricity Generation (MW) [7] Sources Short Term Medium Term Long Term Wind Solar PV Solar Thermal Small Hydro Biomass Total Percentage Share of Projected Electricity Demand

25 The target for the Long term period consists of the following [7] Sources Target Demand (MW) Detailed Description of target Wind 40 Commercially driven and much larger wind farm projects Solar PV 500 Larger PV electricity projects, composed of grid-connected, mini- grid systems and grid connectible Solar Home System and stand alone Solar Home System Solar Thermal 5 National solar thermal electricity programme using one of the 3 proved solar thermal power (STP) technologies Small Hydro 2000 Commercial development of small hydro sites all over the country Biomass 800 Biomass cogeneration, biogas, biofuels electricity generation projects 25

26 The target for the Short term period consists of the following [7] Sources Target Demand (MW) Detailed Description of the Target Wind 1 Wind Farm Demonstration Project Solar PV 5 Solar PV electricity projects, composed of grid-connected and mini-grid systems as well as grid- connectible Solar Home Systems and Stand alone Solar Home Systems Small Hydro 50 There is already an existing small hydro capacity of over 30 MW. New planned capacities include Oyan, Obudu, Evboro, etc. 26

27 TABLE 2: SOLAR PV INSTALLATIONS BY STATE, (mid-yr) [3] STATE Installed Capacity Number of Installations Cap. KWp % No % 1. Lagos Yobe Kano Akwa- Ibom Jigawa Kaduna Katsina FCT Rivers Taraba

28 STATE Installed Capacity Number of Installations Cap. KWp % No % 11 Benue Plateau Bayelsa Sokoto Niger Cross River Gombe Delta Bauchi Anambra Enugu

29 STATE Installed Capacity Number of Installations Cap. KWp % No % 22 Borno Oyo Adamawa Abia Kogi Ebonyi (<0.05) Sub- Total cases of 45 installations to all states: capacity to each state was not specified Total

30 DEMAND/SUPPLY SITUATION Electricity Demand Household and Industry Projections 8% and 9% - High Growth Scenario 3% and 5% - Low Growth Scenario Principal Consumers of SHP SHP Demand Projection Faster Pace 10% annual rate -190mW * (2000) Tab 1 Projected Small Hydro Power Demand -Nigeria mW (Demand) 30mW )Supply) 160mW (84%) shortfall % No development Estimated Demand 3315mW Estimated potential 3500mW Source: REAP/FMP&S, 2006 Draft Document 30

31 POWER GENERATION SCENERIO [2] Daily Power Generation Jan, ,000mW Deduction of Contribution AES Barge and AGIP Daily Generation hovers Around 2,000mW 1999 output level Projected Power Generation NEEDS ,000mW Available Power 40% (NEEDS) Various Planned Projects 10,000mW level (2006/2007) Projected Power Generation SHP (REP) 31

32 SHP Pilot Projects in Nigeria [2] Pilot Projects Enugu, 30kW, Test running, Awaiting Commission Waya Dam, 2 x 75 kw equipment installation soon. Obudu Resort, 30kW, DPR. Evboro II Village, Benin, 2 x 20kW, DPR Commercial projects Kakara, Mambilla Plateau 400kW & 200kW- DPR UNHCR/UNIDO collaboration Ta Hoss, Plateau, 100kW feasibility Stage FCTA Projects Primary Health Clinics Ketti Health Centre, 5kW feasibility stage Kwaita Health Centre, 6.6kW- feasibility stage Kurmi Dauda, 7kW feasibility stage 32

33 Table 1. Projected Nigeria Small Hydro Power Demand [2] S/ N Year Estimated Demand (mw) Estimated Potential (mw) , , , ,300 2, ,100 3, ,315 3,500 33

34 Table 2: Existing Small Hydro Schemes in Nigeria *(Needs Rehabilitation) [2] S/ N River 1. Bagel (I) (II) State Installed Capacity (MW) Plateau Kurra Plateau Lere (I) (II) Plateau *Bakalori Sokoto *Tiga Kano *Oyan Ogun *Ikere Oyo

35 Table 2B: River Basins Identified Hydro Potential Sites [2] Organization Potential Site Status Capacity Upper Benue River Basin Dev. Authority Jada Monkin Dam Kiri Dam Waya dam Dandinkowa Dam Pre- feasibility level 5MW 500kW 1083kW 61.8kW 33kW Owena Benin River Basin Dev. Authority River Owena Ele River River Okhuanwan Pre- feasibility level 1.3MW 1.29MW 600kW Anambra-Imo River Basin Dev. Authority River Igwu Imo River Ivo River Identified 7.55kW 35

36 KEY DRIVERS OF SHP MARKET[2] Population Growth Population Pressure Demographic Changes Settlement Near Water Sources Government sponsored programmes Rural Electrification, Water Resources Development Cottage Industries, Rural Enterprises Poverty Alleviation, Health Care Services Agriculture Draw from SHP Schemes Absence of National Grid Remote Areas Diversification of Community Trades & Services Diesel Based Generator O & M Costs High Fuel Cost Unreliability of Fuel Supply Ready Markets for SHP 36

37 WIND ENERGY MARKET DEVELOPMENT MW Year installed power capacity accumulated capacity >55,000 MW End 2005 (for example: 47,000 MW mid of 2005) Expected Market Growth up to 2010: >16% p.a. Sources: LAYMEYER INTERNATIONAL,

38 WIND ENERGY MARKET DEVELOPMENT ALGERIA installed : 0 MW planned : 50 MW TUNISIA installed : 20 MW planned : 300 MW LYBIA installed : 0 MW planned : 100 MW MOROCCO installed : 54 MW planned : 200 MW MALI planned : 0.9 MW SENEGAL planned : 20 MW CAPE VERDE installed : 3 MW ther countries with known activities: Namibia Angola Gambia Kenya SOUTH AFRICA installed : 3 MW planned: 300 MW EGYPT installed : ~ 230 MW planned : 3500 MW SUDAN planned : 2 MW ETHIOPIA installed : 0 MW planned : 300 MW : 120 MW ERITREA planned : 1.5 MW DJIBOUTI planned : 30 MW Sources: LAYMEYER INTERNATIONAL,

39 The Technical Opportunities That Exist For Wind Energy in Nigeria Example for a Wind-Diesel System (West-Africa) Objectives: Economical: Minimize cost of electricity due to fuel savings Environmental: Maximize emissions reduction Technical requirements: Power Range: 1 kw -10 MW Favorable wind conditions Isolated electrical grid High fossil fuel cost of the diesel system Institutional requirements: Government appraisal International and local financing Power purchase agreement with community based utility Local contribution to operation Technical expertise for supervision Sources: LAYMEYER INTERNATIONAL,

40 Example 10MW Wind Park at the coastal area of Nigeria (1/2) and 4MW Wind-Diese System Assumptions v = 4.65 m/s Energy yield: MWh/a Losses: 5% (included) Wind Park: 12 x 850kW Wind Turbines No costs for land lease Wind-Diesel System: 5 x 850kW Wind Turbines Costs of Electricity Generation [Naira/MWh] Diesel Wind Park 10MW Wind-Diesel 4MW Break Even Point Grid connected medium size Wind Park Profit Margin Present Diesel price Break Even Point Wind-Diesel system Diesel costs [Naira/Liter] (Dec. 2005) Costs of Electricity Generation [US$/MWh] Sources: LAYMEYER INTERNATIONAL,

41 FUTURE The future is bright for the use and development of renewable energies market in Nigeria, only if most of the identified obstacles are cancelled. The awareness about renewable energy are growing by the day and the citizens are coming to terms to the efficacy of renewable energies to national energy mix. There are enormous markets for renewable energy technologies yet to be ear nested. The Nigerian rural community are waiting for a time when the technologies for maximizing this renewable resources are affordable. 41

42 RECOMMENDATIONS An enabling policy should be developed for regulatory frameworks for biofuels development in Nigeria and other parts of Africa. Moreso,, there should be links to overall sustainable development policies. Also, ensuring the participation of all stakeholders and enhance energy security. 42

43 THANK YOU MR. ABIODUN OLANIYI PRESIDENT CENTRE FOR JATROPHA PROMOTIONS & BIOFUELS(CEJAB) LAGOS,NIGERIA TEL: WEBSITE: 43

44 REFERENCES 1. A. K.OLANIYI(2006)Jatropha Promotion in Nigeria: The Green Gold:-Paper presented at the International Renewable Energy Conference at Abuja, Nigeria. 2. A. A. Esan(2006) Small Hydro Power Development Potential In Nigeria. Paper presented at the International Renewable Energy Conference at Abuja, Nigeria. 3. A. K.OLANIYI(2007)Jatropha Plantation and Biofuels Market Development in Africa: Prospects & Challenges. Paper presented at the Africa Biofuels Conference at Durban, South Africa,September 25th-27 th, C.E. Okeke(2006) Opportunities in Nigeria For Solar Energy Use and Development. Paper presented at the International Renewable Energy Conference at Abuja, Nigeria. 5. Ako Amadi(2006)Renewable Energies for Nigeria Challenges and Opportunities. Paper Presented at the Renewable Energy Conference organised by the Goethe Institute, Lagos, Nigeria. 6. Andreas Wiese(2006) Renewable Energy Opportunities in Africa, Example Nigeria: Wind and Biofuels -Paper presented at the International Renewable Energy Conference at Abuja, Nigeria. 7. A.M.A Imevbore(2006) Conclusions and Recommendations on Roundtable on Renewable Energy Reached at the International Renewable Energy Conference. A Paper presented at the International Renewable Energy Conference 2006 at Abuja, Nigeria. 8. NIGERIAN BIO-FUEL INDUSTRY PROGRAMME: Overview & Perspective. A presentation by Nigeria National Petroleum Company (NNPC) during the IREC 2006 held in Abuja, Nigeria on 18th October Energy Commission of Nigeria (2005): Draft Renewable Energy Master plan 10. I.H. Umar (1999) Promoting the growth of Local Solar Energy Industries in the next Millennium: Paper presented at the Solar Energy Society of Nigeria Annual Conference at Ilorin. 11. Technical Report NO. ECN/EPA/02/3 on a survey of business activities in solar PV in Nigeria. 44