Industrial Energy Management Practices in Nigeria By Prof. A. S. Sambo, OON, NPOM Director-General, Energy Commission of Nigeria Being Country Paper Presented at the UNIDO EGM on Industrial Energy Efficiency and Energy Management Standards Held from 21 st – 22 nd March 2007 at Vienna

Prof. A. S. Sambo 2 Outline Introduction An Overview of the Nigerian Industrial Sector National EE & C Activities Energy – Efficient Appliances in Nigeria Walk-through Energy Audits Barriers to EE & C Programmes Opportunities for Collaboration Conclusion

Prof. A. S. Sambo 3 Introduction Population ( 2006 census): 140 million Location/Size: West Africa/ 923,770 square kilometers (356,700 square miles), slightly more than twice the size of California Languages: English (official), Hausa, Yoruba, Ibo Total Energy Consumption (2002E): 275billion kWh (0.2% of world total energy consumption) Fuel Share of Energy Consumption (2002E): Oil (67.3%), Natural Gas (25.1%), Hydroelectric (7.5%), Coal (0.1%) Energy-Related Carbon Dioxide Emissions (2002E): million metric tons (0.4% of world carbon dioxide emissions) Per Capita Energy Consumption (2002E): 1,964.3 kWh (vs U.S. value of 99,356.3 kWh) Per Capita Carbon Dioxide Emissions (2002E): 0.66 metric tons (vs U.S. value of metric tons) Energy Intensity (2002E): kWh/ $ nominal-PPP (vs. U.S. value of kWh/$ nominal-PPP)

Prof. A. S. Sambo 4 Introduction Contd…. INDUSTRY Energy Consumption by Sector, 2005 RESIDENTIAL TRANSPORT

Prof. A. S. Sambo 5 An Overview of the Nigerian Industrial Sector Currently, the growth rate in GDP is about 6% with the share of manufacturing sector being only about 5%. In 2005, manufacturing sector contributed just 7.25% to GDP); To industrialize Nigeria : the share of manufacturing sector in GDP must be higher than 15% per capita income must lie between US$4,232 and US$6,350 in PPP terms. attain the lower middle income average level by 2028 if the economy grows at an average of 7% per annum, 2021 if the economy grows at 10% per annum and by 2019, if the economy grows at a very optimistic mean of 11.5% per annum Itemunit Agriculture[%] Constructio n[%] Mining[%] Manufacturi ng[%] Energy[%] Source: Presidential Report on Industrializing Nigeria, 2006

Prof. A. S. Sambo 6 An Overview of the Nigerian Industrial Sector – Contd… S/ N SUB-SECTORCAPACITY UTILIZATION Food, Beverages, Tobacco Textiles, Wearing apparels, Footwear, Leather products, Carpet/Rug Wood & Wood Products, including furnitures Pulp, Paper & Products, Printing & Publishing Chemical & Pharmaceutical Non-Metallic Mineral Products Plastic, Rubber & Foam products Electrical & Electronics Basic Metal, Iron & Steel and Fabricated Metal products Motor Vehicle & Miscellaneous Assembly Average for the Year % average capacity utilization Old, obsolete, inefficient industrial equipment/ machinery; Inadequate and inefficient energy supply and use situation is the main cause of Nigeria's poor industrialisation

Prof. A. S. Sambo 7 National EE & C Activities The Provisions of The National Energy Policy on EE & C are: Efficient and cost-effective consumption pattern of energy resources; Importation of the more energy-efficient equipment/appliances; Promotion of awareness of the benefits of EE & C; Development of codes, standards, regulations and guidelines on EE & C.

Prof. A. S. Sambo 8 National EE & C Activities Contd… Sensitization Workshop on Energy Efficiency – 1993, 2001, 2002 National Sensitization Workshop on Energy Efficiency in Industry – 1998 (with support of UNIDO) Industrial Energy Efficiency and Demonstration Walk-Through Energy Audit – May 2001, 2003,2004 (UNIDO Technical Assistance) NNC- WEC Africa Forum on Energy Efficiency – January 2007 “Nigerian Energy Labeling Program for Appliances” – proposed to GEF/UNDP for support – at negotiation stage Approval by Government for establishment of a National Centre for Energy Efficiency and Conservation. NATIONAL AWARENESS CREATION/ CAPACITY BUILDING

Prof. A. S. Sambo 9 Energy Efficient Products in Nigeria

Prof. A. S. Sambo 10 Walk-through Energy Audits Energy Savings Potential Energy efficiency in the industrial sector in Nigeria is low; Over 40% of total energy used is wasted on old, obsolete and inefficient equipment; 25% saving potential exists through good housekeeping measures alone; Retrofitting in industries could save over 35% of energy currently used; 40% of electricity consumption for air conditioning could be saved through more efficient equipment and practices; 30% and 35% saving potentials can be achieved in residential and transport sectors respectively;

Prof. A. S. Sambo 11 Walk-through Energy Audits Power Outage Cost Analysis While electricity from PHCN accounted for about 60% of total electricity consumption by the firms, the average cost per kWh is N8.5. Auto-generation accounted for only 40% of electricity consumption, but the average cost was N40.47 per kWh. The audits show that 262 firms spent nearly N2 billion on privately supplied electricity in Firms lost 900 working hours to power outages in 2003; Assuming an eight-hour working day, this translates to about 113 working days in Also, about 35% of the firms reported having to shut down production at one time or the other in the year as a result of power outages. The annualized cost of generator to the firms is N per kW. Annualized other capital items like generator house (N282.57); stabilizer (N20.51); fuel oil tank (N100.46); and others (N256.98). Thus the capital cost of keeping a generator is N700 per kW. For the industrial sector, existing measure of outage costs vary between $2.27 to $32.46/kWh of unserved electricity. Residential outage costs vary between $0.05 and $24.61/kWh unserved.

Prof. A. S. Sambo 12 Walk-through Energy Audits Electricity Supply Situation Frequent power cuts and voltage fluctuations; Every industrial establishment undertakes extra investments in generators; Over 30% of total cost of production is on energy supply that is wasted on inefficient equipment; Capital value of generators is on the average, 25% of the total value of machinery and equipment Proportion of Electric Power Supply from Own Gen. Sets by Firm Size, 2002

Prof. A. S. Sambo 13 Barriers to EE & C Promotion Lack of Detailed and Reliable Data; Lack of Awareness on EE & C Benefits among Policymakers and End-Users; Lack of skilled manpower to identify and implement specific EC measures; Lack of Adequate Institutional Framework; Inefficient Energy Pricing Policies; Lack of Capital to finance EC programs/projects; Low Manufacturing Capacity

Prof. A. S. Sambo 14 Opportunities for Collaboration Industrial Energy Assessment Program Trading on Energy-efficient products – CFLs, Energy- efficient Motors, Improved steam boilers, ESCOs on EE & C – not existing Human capacity building on EE & C programs Energy Labeling – urgently required

Prof. A. S. Sambo 15 Conclusion Inefficiency in energy use has brought a significant negative impact on the cost competitiveness of the manufacturing sector in Nigeria; There is the urgent need for international support to see to the take off of the NCEEC in Nigeria and the subsequent entrenchment of the EE & C practices.

Prof. A. S. Sambo 16 Thank You and God Bless!!