Engineer Lamu Audu is the Managing Director of Mainstream Energy Solutions Limited (MESL), the concessionaire of Kainji and Jebba hydropower plants in Niger state. In this interview, Engr. Audu spoke about the investment the company has made to bring the plants’ capacity to 922 megawatts (mw) of electricity in the national grid.
What drives your investment in the power sector despite the liquidity crisis?
Mainstream Energy Solutions Limited (MESL) came up to acquire Kainji and Jebba Hydro Power Plants as a result of the privatisation of the sector. We are poised to completely live up to the spirit of the concession agreement by actively recovering the lost capacities in our plants and to ensure that Nigerians really benefit from the privatisation. The power sector privatisation exercise of 2013 has enabled private sector players to become involved in the effort to drive the power sector forward.
What are your current projects and what should Nigerians expect?
MESL has taken a major step in driving its electricity generation objective with the rehabilitation of Unit 1G7 generation which has 80mw capacity of electricity at Kainji plant. It is one of the units that were first commissioned at Kainji in 1968. We have a capacity recovery obligation under the concession arrangement with the federal government and it is also our contribution towards incremental power of the government.
The rehabilitation will commence immediately and will be done by General Electric and other partners. The turbine to be rehabilitated was actually in operation after we took over till September 1, 2014. But before we took over, the unit was out of operation for seven years and so we had to try to recover it but the reliability was very poor and had low safety aspect so we shut it down. The unit is old and has never gone through any overhaul since commissioning. The rehabilitation will last for 24 months at an estimated cost of $26 million.
In January this year, MESL and GE signed a memorandum of understanding to deliver renewable power projects in Nigeria. We will also jointly work to deliver the Kainji and Jebba Power Plants Recovery Plan, improve generation and evacuation of power and improve the contribution of Kainji plant to the West African Power Pool (WAPP) of which we are a member.
On the electricity market debt to GenCos, how much is Mainstream being owed?
We are owed quite a lot. Starting from December 2016, the company has an outstanding receivable of N51.7 billion but going forward from January 2017, we were promised improved payment as a result of the N701bn Payment Assurance Guarantee (PAG) of the federal government that we will be receiving up to 80 per cent of our monthly invoices. However, that has only been paid up to May and we are now in December. Currently we have over N70bn receivable as a Generation Company (GenCo) in the market.
Our projects are solely financed by the company’s revenue and we embarked on this project with the expectation that the government will keep to its promise on the N701.9bn guarantee for the payment of our invoices so that we can utilise the fund for the recovery of more capacities. We are hoping that this gesture should continue beyond the two years; it is our hope that the 20 per cent outstanding of our monthly invoices and the legacy debts that accumulated till December 2016 will be settled to increase our investment ability and give other investors the appetite to invest in the power sector.
What are the details of your plans for renewable energy investment?
We are leveraging on the fact that the company aspires to be a key player in the renewable energy sphere, not just only in hydro. The renewable energy goes beyond that to cover solar, wind and all other sources of clean energy generation. We are planning to use the facilities that we already have to generate power through solar Photo Voltaic (PV) technology considering that we have the transmission infrastructures to connect to the national electricity grid. We are partnering with other developers of solar energy business to be able to run an on-grid and hybrid solar power generation where we can link it with the generation from hydro source. The essence is to optimise the use of our reservoir and generate more electricity.
How are you addressing water level issues in the dry season?
We are lucky to be on the River Niger because it is a very long river but we have been very proactive in our water management between Kainji power plant upstream, and Jebba power station which is downstream. We just commissioned the software that is satellite-based to assist in water level management. The Inflow Water Management Forecast is a system that will forecast how much water level is flowing down on the Niger to our plants so that we can optimise what we have and what we are expecting so that we can run at optimal level through the year.
Mainstream has implemented the free governor system to stabilise the grid. What was the process?
We should be praised for getting that system done because so many power plants are still not having this free governor control system. Jebba is originally designed to be a base load station unlike Kainji Power which is more flexible. When we took over the power plants in 2013, none of them was overhauled even when they had operated for over 30 years. So most of these equipment are actually not functioning optimally so it delayed the process of getting them to the free governor operation. We had to comply because it is a grid requirement and is captured in the Grid Code to ensure the stability in the national grid. Being a law abiding company, we had to quickly comply with the directive from the government and ensured that the three units from the five available units in Jebba Plant are responding to the free governor system thanks to the ingenuity of our engineers.