siemens.com/nigeria Electrification Roadmap for Nigeria Siemens Value Proposition supports reliable and affordable power supply Smart meter and automation for secure revenue streams, rehabilitation of existing assets for sustainable economic growth and future development Nigeria’s power system is constrained by an imbalance between power generation and consumption. While > 13 GW of power gen- eration capacity is available, only ~ 3 4 GW is reaching final customers (households, commercial and industrial users). Existing assets are partly idle and do not actively participate in the energy system. Removing severe bottlenecks within the transmission and distribution grid is necessary to allow free flow of electricity. Rehabilitating defec- tive connections of key substations to the existing control center is fundamental to improve the operation of transmission network and unlock its potential. Additionally, upgrading existing control center to the latest state-of-the-art technol- ogy backed up with extensive training of Transmission Company of Nigeria (TCN) personnel enhances the quality of opera- tional and business decisions while protect- ing previous and future investments. Fur- thermore, accurate revenue collection can be improved through deployment of smart metering systems. Short-term goal is the rehabilitation of available infrastructure with special focus on distribution and transmission system. To- gether with rehabilitation of existing power generation assets, the grid will be able to evacuate 7 GW of power generation to end customers. In a long-run, additional genera- tion capacity shall be built to support rural electrification and economic growth. Nige- rian National Petroleum Corporation (NNPC) power generation projects already under planning can be first projects for execution in addition to other projects identified based on feedstock availability. In the end 25 GW of generation capacity would be available to meet the basic power demand in a prosper and electrified economy. Improve entire power supply chain to evolve Nigeria’s human and physical resources for steady economic growth. 1 Electrification Roadmap Nigeria | Siemens Value Proposition Holistic and modular approach to deliver 25 GW to Nigerians Siemens delivers a comprehensive concept for upgrading the grid and reducing techni- cal and non-technical losses while involving local partners to maximize the local contri- bution within this plan. The ambitious 25 GW of power generation would provide reliable electricity for nearly 200 million Nigerians. The anticipated power generation mix includes fluctuating renewables (Hydro, Photovoltaics, and Wind) as well as dis- patchable conventional generation. This concept enables the creation of about 5 , 000 direct jobs and over 100 , 000 indirect jobs. This long-term, sustainable job creation also includes comprehensive training, education and ‘Corporate Social Responsibility’ (CSR) concepts to train young Nigerians for maxi- mal in country value creation. I. Nigeria Electrification Roadmap Siemens Value Proposition: • targeted power generation of 25 GW • 5 , 000 direct jobs • 100 , 000 indirect jobs • local training center and workshop 2 Siemens Value Proposition | Electrification Roadmap Nigeria Multi-step approach to maximize benefits for Nigeria The Siemens proposal is a holistic approach to maximize the use of existing assets and delivers results within several months. The graph below shows the possible gains the individual enhancements can achieve. And highlights the importance of cross-concept focus topics to maximize benefits for Nige- ria. The picture above shows the smart meter, transmission and distribution (T&D), power generation and service projects to be ex- ecuted for a sustainable power supply. The proposal suggests the following actions to maximize the electricity usage within Nigeria: • “Advanced Revenue” Smart Metering system for end customers and all metered entities to ensure revenue security (pilot DISCOs before a national rollout). • Resolving distribution and transmission bottlenecks: + 1 6 GW • Additional small-scale power generation to support T&D grid • Rehabilitation of power generation: + 6 5 GW II. Proposed Electrification Roadmap • Resolve fuel supply (gas) constraints: + 2 0 GW • Additional NNPC power generation (central and northern regions): + 4 GW • Additional power generation to support economic growth ambitions: + 7 6 GW • Financing and best practice transfer as proven in many countries • Integrate ‘Learning / Education’ to maximize in country value add. 3 Electrification Roadmap Nigeria | Siemens Value Proposition Nigeria’s electrification as a basis for economic development There was a moderate economic recovery in 2017 with real ‘Gross Domestic Product’ (GDP) projected to grow at 2 2 % spurred by in- creased infrastructure spending and restora- tion of oil production to previous levels. There is awareness of electricity constraints as hurdle to more economic prosperity and development. The per capita electricity consumption in 2015 was only 0 15 MWh/ capita (or 0 69 toe/capita), compared to South Africa with 4 0 MWh/capita and Ghana with 0 3 MWh/capita. To close the gap to peer countries (such as Algeria and Morocco) the power generation consumption per capita needs to increase 8 -fold. While South Africa is leading the energy development, past developments of Algeria is a reasonable proxy for Nigeria. Therefore, additional investments in the overall energy supply chain is necessary to drive the ambitious GDP growth expectations. Beside flare gas collection, treatment, and distribution through national and interna- tional gas pipelines, the rehabilitation of existing infrastructure, as well as enhancing metering to all customers are other key tasks to be done for short- and medium-term improvements. A reliable and secure power system supports the ambitious governmental targets of electrification of economy as a prerequisite for economic growth of the Nigerian nation. Ambitious GDP growth requires additional investments in the entire energy supply chain, such as • exploration, • flare gas collection, • gas pipeline, • transmission and distribution grid, and • power generation. “Security of Supply” through flare gas utilization. “Security of Finance” through smart meter infrastructure. 4 Siemens Value Proposition | Electrification Roadmap Nigeria Create attractive business environment in power generation sector by combining measures of loss reduction and power generation expansion. Our analysis of Nigeria’s power sector clearly shows that a bold move in increasing the countries power generation is necessary to create earnings in the mid-term. With Business-as-usual capacity additions, deficits of the power generation sector will result in multi-billion USD economic losses. Due to insufficient collection of revenues, high technical and commercial losses and below optimal performance of the existing power plants fleet, the power generation sector will continue to require subsidies and face harsh financing conditions for new projects. Removing the ‘Aggregate Technical and Commercial Collection’ (ATC&C) Losses will result in positive earnings of the power generation sector after only a few years lead time. Still, without additional expansion of generation capacity, accumulated earnings will only become positive after 2028 . Fur- ther to electrifying Nigeria, ATC&C will lead to a sound business environment in the power generation sector that will benefit local companies as well as attract additional foreign investment into Nigeria. To further speed up electrification of Nige- ria, satisfy the demand for power, and enable earnings in the power generation sector above 5 bn USD annually, power generation capacity must be expanded to above 10 GW in the short-term and 25 GW in the mid-term. Based on this ratio, to unleash the full economic potential, Nigeria must not only aim to remove ATC&C losses, but also in- clude a rapid increase of power generation capacity in their short- and mid-term plan- ning. 5 Electrification Roadmap Nigeria | Siemens Value Proposition Required T&D and power generation extension to reach 25 GW capacity There was a moderate economic recovery in This proposal touches the following tasks: 1 . Describe the current situation in all distri- bution companies/ sectors, 2 . Assess the future power grid availability and requirements, 3 . Assess future fuel availability, and 4 . Add gas-fired and renewable power generation for a sustainable and reliable power system. A National or centralized “advanced rev- enue” smart metering system is an enabler for security of revenue to ensure proper payback for the ‘distributions companies’ (DisCo’s) to ‘Nigerian Bulk Electricity Trading’ (NBET), as well as to Meter Asset Providers (MAP’s) and their respective investors. DisCo’s currently receive only 45 % of total revenue (average aggregate technical and commercial collection losses, ATC&C, are 55 %), whilst only paying 28 % on average for electricity received from Transmission Com- pany of Nigeria (TCN) to NBET and further on to power generating companies. The following sub-chapters describe the proposed projects to maximize the use of existing assets in the most efficient and economical way as well as build on them to expand for future requirements. The structure follows a top-down approach, meaning: after generation, transmission, and distribution solutions also end customer solutions are considered within this offer (see picture below). Top-Down approach: • Generation • Transmission • Distribution • Smart Metering 6 Siemens Value Proposition | Electrification Roadmap Nigeria Rehabilitation of existing power genera- tion asset The Afam Power PLC site buries a broad array of technologies, with blocks I-V hous- ing twenty gas turbines in aggregate. A site well-positioned to serve a key economic area, Siemens proposes the rehabilitation of the block V (hereafter “Afam V”). This pro- posal would maximize the benefit to the asset owner and country by enabling a key asset to be productive once more for the country. In brief, the work scope would include: • Exchange of core engine and upgrade of GT 19 and GT 20 to latest version • Off-site rewind of GT 19 and GT 20 genera- tor rotors • On-site rewind of GT 19 and GT 20 genera- tor stator • Rehabilitation and upgrade of I&C Systems to SPPA-T 3000 • Replacement of some electrical system components and inspection/ testing of others subject to findings • Replacement of some balance of plant system component and inspection/ testing of others subject to findings The value proposition is, with the existing site infrastructure, foundation and equip- ment can be further used for this footprint concept; the investment per additional power output for the rehabilitation of Afam V is 50 % below a new open cycle gas turbine power station or comparable new installa- tion. As a second step we propose a replacement of the existing blocks with a new combined cycle power plant as fuel supply and grid integration do already exist. 7 Electrification Roadmap Nigeria | Siemens Value Proposition A more extensive collection of information as well as the detailed offering for this project is attached as Appendix A The table below provides the summary of this sub-concept ‘Rehabilitation Power Generation Assets’. Status Challenge Proposed solution Benefit Next step • Afam V not operational • Additional power needed • Rehabilitate existing assets • Minimize additional costs • Define detailed scope and timeline New power generation to support central and northern regions Nigerian National Petroleum Corporation (NNPC) is already in progress of bid prepara- tion for some of the planned power plants in Abuja, Kaduna, and Kano region. Siemens is happy to support in any pending item wherever possible to speed up this process to build new power capacity in central and northern Nigeria. NNPC aims for four projects in central and northern Nigeria: • Abuja region; + 1350 MW, • Kaduna region: + 900 MW, • Kano region: + 1350 MW, and • Agura (Lagos region): + 450 MW. Additional projects (e.g. Independent Power Producer (IPP) projects) are required to close the capacity gap to 25 GW. These projects could be for example in the Lagos region or any other location where demand for addi- tional power is especially high. 8 Siemens Value Proposition | Electrification Roadmap Nigeria For all NNPC projects the proposal is based on the SGT- 2000 E technology, as it shows excel- lent start-up and part-load behavior (fast start-up in ~ 17 5 minutes / optional < 12 minutes), has outstanding fuel flexibility, (e.g. natural gas. low-calorific gases, crude and heavy fuel oil), has a service-friendly design (can be offered with one major overhaul in lifetime only), has more than 17 million of equivalent operating hours, and a fleet reliability of above 99 %. On top of that it is already used in Geregu I, II, Azura Edo IPP, and Afam V. A more extensive collection of information as well as the detailed offering for this project is attached as Appendix B The table below provides the summary of this sub-concept ‘New Power Generation’. Status Challenge Proposed solution Benefit Next step • Capacity deficit in central and northern Nigeria • Unreliable fuel supply • New flexible and reliable power generation (incl. renewables and conventional) • Reliable power generation • Enable economic growth • Define detailed scope 9 Electrification Roadmap Nigeria | Siemens Value Proposition Resolving transmission bottlenecks and stability issues Peak operating capacity in 2016 was 5 , 075 MW: • Initial studies of the Lagos Region have been performed. • Certain additional capacity is available. • 132 / 33 kV transformers feeding into the distribution companies are the major bottle- necks. • Increasing the peak power further will require significant investments. Further studies for Nigerian transmission system to be done: • Review of operational issues (analyses of large outages / blackouts). • Draft proposals for fast and effective measures to mitigate/limit impacts of opera- tional issues. • Review of existing bottlenecks and defini- tion of required projects to solve the prob- lems. • Plan for higher capacities and prioritize projects together with TCN and FMPW. The first areas in the transmission system to target as pilots are within the Abuja region, Yola region (Damaturu, Maiduguri) and the Lagos region (Alagbon). Afterwards, a national wide rollout is planned. To minimize transmission losses and mal- function of the transmission assets (such as substations, protections) the following projects are proposed: • Rehabilitation of telecommunications of disconnected substations to existing control center, • Improve operational efficiency of critical substations with substation automation, • Secure existing grid assets with latest protection solutions, • Efficiency increase of telecommunication through powerline carrier PowerLink IP, and • Knowledge transfer for transmission company (Transco) employees. A more extensive collection of information as well as the detailed offering for this project is attached as Appendix C The table below provides the summary of this sub-concept ‘Resolving Transmission bottlenecks’. Status Challenge Proposed solution Benefit Next step • High ATC&C losses • Improve quality and efficiency • Upgrade with high voltage product, system and solutions • Reduce ATC&C losses • Safe and reliable transmission of electricity • Potential pilot substations: Oko Oba, Epe, and EPZ (Free Trade Zone). 10 Siemens Value Proposition | Electrification Roadmap Nigeria National Control Center (NCC) – Rehabilita- tion and enhancing operation of transmis- sion network Real time visibility of transmission substations is crucial for monitoring and dispatching existing transmission assets by National Control Center. Therefore, availability of actual data from primary substation equipment to ‘remote terminal units’ (RTU), functioning communica- tions between RTU’s / Substation Automation systems and Control Center are necessary for successful operation. Constantly keeping SCADA system healthy, the know-how of personnel up-to-date and applying upgrading and maintenance strategies in-time guarantee smooth operation, protect previous and future investments while provide piece of mind to TCN organization through quality operational and business decisions. Siemens propose the following steps, to achieve above goals: • Step 0 (6-12 months): • Step 1 (6-12 months): • Step 2 (12-24 months): • Step 3 (24-36 months): Some of expected key benefits for TCN and Nigeria can be listed as below: • Improving visibility of transmission network and avoid continuing the current unpleasant situation at first step, • Faster start and smooth implementation of system upgrading due to existing knowledge in TCN and Siemens, • Avoid complex process of data migration from existing system to control center technology from different vendor, • Quick utilization of upgraded system and new features with minimum efforts, • Protect previous and future investments, advancing & optimizing current business pro- cesses with min time and efforts, and • Saving of costs and times in overall. o Upgrading existing control center to the latest state-of-the-art software and hardware technologies, o Enablement of TCN personnel through extensive trainings, o Provision of Advanced Transmission Net- work Management, o Rehabilitation of telecommunications between disconnected substations and the control center (Key 30 % of substations), and o Integrating new substations. Rehabilitation of connections between primary assets and marshaling panels and make signals available to RTU’s Rehabilitation of telecommunications be- tween disconnected substations and the existing control center (Key 10 % of substa- tions) A more extensive collection of information as well as the detailed offering for this project is attached as Appendix D and includes. The table below provides the summary of this sub-concept ‘New Power Generation’. Status Challenge Proposed solution Benefit Next step • No real time visibility and controllability • No data collection • Low automation • Upgrade existing SCADA • Establish lost communication links • Improved visibility • Minimum efforts in upgrading • Rehabilitation of connections between primary assets • Upgrade control center • Train personnel • Have support and maintenance strategy o Rehabilitation of telecommunications between disconnected substations and the control center (Key 60 % of substations), o Providing Maintenance and Services. 11 Electrification Roadmap Nigeria | Siemens Value Proposition Resolving distribution bottlenecks Today, power distribution by the Distribution companies to the end-customers is limited by power infeed from TCN. In addition, capacity bottlenecks in the distribution networks do exist. Investigation of peak supply by TCN compared to non-coincidental peak load of distributions feeders. Kano Eko 1 , 200 1 , 000 800 600 400 200 0 Ibadan TCN peak load Disco non-coincidental peak load Power [MW] Distribution networks (“last mile”) are capable to supply twice as much demand! Assumption for Nigeria is that it sums up to 11 GW, which would need to be verified in further studies off the overall Nigerian Network (TCN and the 11 DisCo’s). To avoid malfunctional distribution companies (DisCo’s) in the future it is recommended to purchase PSS®SINCAL licenses and train the DisCo employees accordingly. In a short-run proper planning and execution can be ensured as Siemens PTI does offer this as a service. In a long-run local staff can be hired and trained so this service is full-filed locally. The following projects are recommended: • Monitor DisCo’s energy flow, • Knowledge transfer for DisCo employees. The first pilot distribution companies (DisCo’s) to target are Abuja region, Yola region, and Lagos Region (Alagbon, Eko DisCo). Afterwards, all DisCo’s shall be targeted. 12 Siemens Value Proposition | Electrification Roadmap Nigeria An intelligent overall solution from a trusted partner for Distribution System Operators for reliable electricity distribution. and includes. The table below provides the summary of this sub-concept ‘Resolving Distribution bottlenecks. Status Challenge Proposed solution Benefit Next step • Not all customers are metered nor billed. • For several DisCo’s no information available. • Revenue collection • High ATC&C losses • Network analysis • Online monitoring • Reduced service cost • Higher customer satisfaction • Data collection and validation • Simulation and planning of all 11 DisCo’s A more extensive collection of information as well as the detailed offering for this project is attached as Appendix E 13 Electrification Roadmap Nigeria | Siemens Value Proposition Additional embedded small-scale conven- tional power generation to support special electrification requirements after removal of grid constraints Small-scale power generation can be used to fulfill specific needs such as delivering power to remote areas or for supplying power to special “eligible” customers as in the industry, or com- mercial sector, after removal of grid constraints. The first pilot projects discussed are: • 40 MW conventional generation in Abuja region (e.g. SGT A 45 ), and • 30 MW hydro power plant in Jos region (Dadin Kowa). Abuja, the capital city of Nigeria, is located within the Federal Capital Territory (FCT) the seat of the federal government at the very center of the country. It is one of the fasted growing cities in the world, having experienced a rapid population increase in the past decade, which has been coupled with a steady econom- ic growth particularly within its key tourism and hospitality sectors. However, with this growth in its resident population and number of busi- nesses, comes an increase in the electric power demand in the city and its surrounding subur- ban districts. Therefore, there is a clear motivation to improve the local electricity supply by building new power generation capacity, and since the gas and T&D infrastructure are already in place and considering its location as the seat of the federal government, it is best positioned for immediate actions to be taken by the govern- ment to move the project forward. The deployment of SGTs-A 45 is intended for Abuja to quickly upgrade and improve the energy situation for its people and economy. The SGT-A 45 achieves significantly higher power output and fuel efficiency than any other mobile gas turbine unit. It has a modular de- sign, consisting of three trailer-mounted mod- ules to minimize the number of items that must be installed on site. The systems on each trailer are self-contained to reduce the number of interconnections to be completed on site. Questions to be answered before an SGT A 45 can be put into operation: • Where does the fuel come from (truck vs. pipeline)? • Where is the T&D system ready to offtake the power? 14 Siemens Value Proposition | Electrification Roadmap Nigeria A more extensive collection of information as well as the detailed offering for this project is attached as Appendix F The table below provides the summary of this sub-concept ‘Additional small-scale power generation’. Status Challenge Proposed solution Benefit Next step • Limited availability of energy for large customers • Increase power delivery to key customers • Embedded generation (conventional, hydro, and other renewables) • Reliable power supply to key customers • Define scope (incl. e.g. location) Embedded small-scale hydro power genera- tion Siemens is also capable to deliver small-scale hydro power plants. To provide any kind of offering for the targeted 30 MW run-of-the-river hydro power plant in Jos region (Dadin Kowa) more details such as location, drop height, design water quantity, preferred technology, and seasonal details are required. No offering for this kind of project as infor- mation available by now is insufficient. Centralized Smart Metering system to ex- tend customer base and ensure security of revenue A Centralized “Advanced Revenue” Smart Metering system will allow for Government owned metering data, as well as control revenue on a National basis. This concept makes the customer behavior transparent. Due to revenue being based on a “Advanced Revenue” or “Prepaid”, revenue is secured upfront before any kWh is con- sumed. If customers do not “top-up” their central wallet on the system in time, they can be disconnected remotely – thus secur- ing revenue. By centralizing the Smart Metering solution, government and private institutions such as MAP’s, DisCo’s, NBET, NERC, TCN and Gen- eration Companies (GenCo’s) can gain valuable insight in load consumption data so that strategic planning is made easier and more accurate – reducing unnecessary costs for grid upgrading and new infrastruc- ture. Also, revenue protection is ensured and due to the nature of the centralized system, each MAP and DisCo is ensured their revenue, alongside NBET and investors so that all parties enjoy the security of revenue – making investment into the Nigerian Electricity infrastructure a “risk free” reality. In a first step the distribution companies (DisCo’s) in Abuja region, Yola region, and Lagos region are targeted for pilot imple- mentation. 15 Electrification Roadmap Nigeria | Siemens Value Proposition The figure below shows how a national AMI “Advanced Revenue” Smart Metering system could look like. A more extensive collection of information as well as the detailed offering for this project is attached as Appendix G The table below provides the summary of this sub-concept ‘Centralized Smart Metering system’. Status Challenge Proposed solution Benefit Next step • Above 50 % of customers not metered nor billed • High ATC&C losses • High OPEX (manual reading!) • Low revenue collection • Standardized smart meters incl. PrePay option • Lowering ATC&C losses and OPEX • Government to own the data • End-to-end architecture to be designed 16 Siemens Value Proposition | Electrification Roadmap Nigeria Flare gas utilization Nigeria has developed a detailed roadmap to end routine gas flaring and to leverage the full potential of gas for power generation. Over 130 flare sites have been identified for flaring down projects so far (distributed in the Niger Delta, onshore and offshore). Collecting the flare gas would significantly decrease the fuel import dependency and would substantially contribute to carbon emission reduction as well as reduc- ing public health hazards. Treated flare gas use (up to 3 , 300 MMscfd) would be enough to power up to 15 GW of baseload high-efficient Combined Cycle Gas Turbine (CCGT) power plants across the country depending on the collected flare gas quality. Siemens offers an integrated solution from flare gas capturing via conditioning and transport to power plants (see chart below). A more extensive collection of information as well as the detailed offering for this project is attached as Appendix H The table below provides the summary of this sub-concept ‘Flare gas utilization’. Status Challenge Proposed solution Benefit Next step • Associated gas is flared • Reduce GHG emissions • Gas supply for power generation • Collect associated gas and use in power generation and industry • Fuel savings • GHG emissions reduction • Define scope (incl. e.g. location, amount, quality) 17 Electrification Roadmap Nigeria | Siemens Value Proposition Financing A very important part of this proposal is financ- ing. Please find below some information about the Mega Projects in Egypt where Siemens Financial Services arranged multi-billion financ- ings. Similar structures could be pursued for state-owned customers in Nigeria; details are outlined in Appendix I For customers not entirely owned by public entities different financing solutions might be applicable. The financing possibilities have to be evaluated carefully in close co-operation with the management of the respective customers taking into consideration their particular needs. Status Challenge Proposed solution Benefit Next step • Ministry of Finance guarantees are available • Financing the investments for grid enhancement and new power plants • ECA (Export Credit Agency) covered buyer credits • Favourable interest rates • Long repayment periods •Information requirements (see Appendix I) 18 Siemens Value Proposition | Electrification Roadmap Nigeria Learning / Education For a sustainable development also training of Nigerian youth is substantial. See the graph below to see the different options. A more extensive collection of information as well as the detailed offering for this project is attached as Appendix J In addition, Appendix K contains the “Anticorruption Proposal: Compliance Pact and Supplier Training”. The table below provides the summary of this sub-concept ‘Education / Learning’. Status Challenge Proposed solution Benefit Next step • Lack of appropriate skills rising unemployment (unemployment rate of 18 8 %, 2017 Q 3 ). • World Bank report “a transition into more produc- tive employment requires more skills.” •Better link Educa- tion to Industry (dual vocational education and training approach). • Siemens Road- map for Electrifica- tion results in high demand of a skilled workforce. • Combination of vocational and industry-specific training. • Strengthening and revitalization of preselected Nigerian Public Vocational Schools and Higher Education Institutes. • Project with High Social Value. • Localization of training on global industry standards. • Job creation and employability. • Design will be based on demand (short-term as well as long-term). • Understand the recent Vocational Education and Training (VET) strategy. • Align on matching VET concepts. 19 Electrification Roadmap Nigeria | Siemens Value Proposition