Gas to Power

The Gas to Power project contributes to a larger programme; the Sustainable Utilisation of Nigeria’s Gas and Renewable Energy Resources (SUNGAS), which aims to encourage the sustainable use of Nigeria’s energy resources through harnessing gas from flares to meet local energy needs in the Niger Delta.

Project Background

For communities living in the Niger Delta, gas flaring is the most visible and insidious representation of the oil industry. Nigeria has approximately 180 trillion cubic feet of gas reserves, the seventh largest in the world, currently exporting around 3 billion cubic ft. per day and flaring around 2.5 billion cubic ft. per day; equal to 30% of the entire EU’s annual gas consumption. However, only 0.5 billion cubic feet per day is supplied to the domestic power sector, despite 70% of the population not having access to electricity or modern energy services. Harnessing gas from the flares to meet local energy needs is critical to local development in the region.

Project description

The Gas to Power demonstration project will utilise associated gas from either a flow station or oil well and using a micro turbine, generate electricity for domestic and small business consumption. The project will deploy a 0.5 MW gas turbine to produce and distribute electricity to around 3,000 households, 500 small businesses, 5 health centres and 6 schools. A strong community ownership element has been built into the project design; the entire assets and operations will be managed and maintained by a community-based utility company, owned by the community. The siting of the project will be preceded by a technical feasibility and economic viability assessment since the project aims at full cost recovery. In addition to electricity generation, the project has scope to incorporate other components including gas to liquid and gas to fertiliser, and these additions will operate on a fully commercial basis. This is the first time in Nigeria that a community will generate its own power from a hi-tech micro turbine rather then unsustainable diesel generators that create high levels of pollution. The scale of the project makes it replicable in other parts of the Niger Delta; as a sustainable local solution to domestic and industrial energy needs.

Impact

Generating a reliable, affordable power supply will increase the efficiency of small-scale enterprises; increasing their production and turnover. Domestic electricity will improve the quality of life for community members with a reliable electricity supply to local schools and clinics; this will have a significant impact. On Bonny Island, the community-owned utility company has demonstrated the positive correlation between a reliable power supply and the ability for local health centres to perform critical life saving operations, without which, referrals to the urban centres would have been required. All of these factors will also contribute to poverty reduction in the target community.
As a standalone project, this will have limited impact on flare reduction; its value is as a demonstration. However, with a combination of these projects providing a sustainable model for the increased domestic utilisation of gas, consistent with the Federal Government policy, this will strike a critical blow to reducing flares. The project will ensure communities are provided with a real stake in oil production in the region, seeing the benefits from gas, as well as having control of their energy supply, will reduce discontent.

Project Partners

This project is a component of the wider Sustainable Utilisation of Nigeria’s Gas and Renewable Energy Resources (SUNGAS) programme being implemented in collaboration with the following partners:

Project benefits to stakeholders

  • Gas-intake to feed the plant will come from the assets of an International Oil Company (IOC), providing a strong incentive to the local community to protect the asset and maintain an uninterrupted power supply
  • Shift in responsibility and cost savings in the current provision of electricity through diesel-powered generators to host communities by IOCs
  • Demonstration of sustainable solution to gas flaring in the Niger Delta, tackling the issue directly
  • Provides an approach to responding to the new policy of the Federal Government of Nigeria, that places emphasis on increased domestic utilisation of gas as opposed to gas exports
  • Possibility of obtaining carbon credits for the project under the voluntary emission reduction mechanism of the Kyoto protocol.

Project Funding

US$ 1.6 million has been committed to the project by the European Commission with a further US$ 0.59 million and US$ 0.56 million committed by the UK Government’s Department for International Development and Shell Petroleum Development Corporation.

This document has been produced with the financial assistance of the European Union. The contents of this document are the sole responsibility of Living Earth Foundation and can under no circumstances be regarded as reflecting the position of the European Union.

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