Nigeria Requires $6 Trillion Expenditure To Address Current Energy Crises, Boost Economy- Falana

In this Mr. Abayomi Olushola Falana, Business Representative in Nigeria, of StarCore  Canada says Nigeria’s policy on Nuclear power initiative will help resolve the Country’s energy crises but would require estimated $6 trillion to fully sustain the industry.

As an expert how much power does Nigeria with her size require to boost economic growth?

Per head of population, Nigeria is one of the least-electrified nations and the current system is struggling to keep up with the demand for electricity by its 200 million people and growing day by day.

In the least, with over 200 million people and huge manufacturing and other business activities, the country should be generating at least 200,000MW per day.

According to the World Bank report, Nigeria’s electricity per capita was abysmally at 142 kilowatts, which when compared with the world figure of 3,104 kilowatts for the same year, was too small.

To attempt to determine the actual quantum of power we currently need in Nigeria is synonymous to answering the question ‘How long is a piece of string’.

This implies that the desired quantum of electricity we require in Nigeria is not determinable as such when we expect to industrialize to boost our economic growth in the nearest future. Let’s take a look at the quantum of electricity generated by other well industrialized countries of the world in relation to their population figures.

See below the table showing some countries total power output and their corresponding population figures.

Country                      Total Power Output                                            Total Population

China 5,649,000,000 MWh 1.42 Billion.

USA 4,260,000,000 MWh.    330 Million.

India 1,102,000,000  MWh.    1.37 Billion.

Japan 1,088,000,000 MWh  126 Million.

Russia 1,069,000,000 MWh 149 Million.

Germany    664,000,000 MWh.       83 Million.

Canada    626,074,000 MWh    38 Million.

France    568,584,000 MWh     67 Million.

Brazil    557,963,000 MWh.       208 Million.

South Korea    534,438,000 MWh     52 Million.

UK    338,000,000 MWh.          64 Million.

Nigeria             13,000 MWh.         200 Million.

What the figures in the table above show is that it is a futile exercise to give an estimated figure as the quantum of electricity we need in Nigeria. Rather, let us gather together our loins to keep exploiting all avenues to boost power supply until they are exhausted. This is the approach the advanced countries have been adopting in achieving the huge quantum of power output shown above in the table.

 How much money in conservative terms can be sufficient to revive the power sector?

 

The latest in-depth-study available is by the Energy Information Administration, Cost and Performances of New Generating Technologies published in January 2019, and summarized in Table 2, below.  This shows that natural gas is the cheapest, followed by PV solar.  Coal is comparable to nuclear in cost, but all the cost estimates are for utility-scale plants operating on a grid, and assume that fuel is readily available.  Nigeria faces more complex challenges, The electricity distribution system is not reliable and cannot accept large increases in power with significant investment, and the use of AC transmission lines means the commitment to large-area mini grid control to avoid instability.  Natural gas in abundant in the country, but the distribution network will also require significant investment if it is to supply electricity plants – and it seems unlikely that the total installation costs will be less than $3 million/megawatt.

Going by the conservative figure of 200,000 MW power output requirement based on the current population of 200 Million people in the country, Nigeria will have to spend over US $6 Trillion (Six Trillion US Dollars) to achieve sufficient power supply to boost the economy.

On a parallel scale, StarCore Nuclear proposal to establish twenty three (23) mini (modular) power plants in Nigeria, will result in producing total power output of 1,652MW comprising Eighteen (18) series of 660 plants to produce 84MW each; and five (5) series of 220 plants to produce 28MW each; together with 100 kilometers with each 600 series plant, producing a natural grid that would provide transmission lines and kilometers distribution lines for a large segment of the country.

The installation cost for the entire StarCore Nuclear mini power stations is circa US $ 2.30 Billion but would by financed by StarCore, at no cost to the Nigerian Administration, under the Build-Own-Operate-Decommission Business Plan.  In addition, the construction of the plants would result in approximately $1 billion in local investment, and provide the Nigeria Atomic Energy Commission (NAEC) and the Nigerian Nuclear Regulatory Authority (NNRA) with technical expertise that would make them a leader in world-wide Generation IV plant installation.  StarCore will require  Power Purchase Agreement for consumer consumption and Sovereign Guarantee to back the requisite finance from the Federal Government of Nigeria through the Federal Ministry of Finance and Central Bank of Nigeria, but this a very low-risk commitment, since there would be no commitment unless StarCore provided the power.

How can the industry deal with technical and commercial loss.?

Technical and Commercial loss occurs when the power plants are underutilized due to gas shortages to thermal plants and water constraints with inadequate rains in the reservoir of the hydro plants.

Gas constraints and liquidity challenges often cut a third of output in a country where 75 percent of power is generated through gas-fired plants. According to the Power Sector Performance Report of the Presidential

Task Force on Power, in September 2018, the power sector witnessed a power loss of 107,340MW, (about N51.519 billion in monetary terms) due to insufficient gas supply, distribution and transmission infrastructure.

In 2018, the number of idle power plants increased from seven to 15, as a result of gas limitations, resulting in a revenue shortfall of N52.45 Billion in October

Power transmission remains a herculean task because of major challenges, especially limited transmission facilities and vandalism of facilities that occur too frequently and leading to huge deficit  The low transmission capacity drives generation companies (GENCOs) in the country to generate electricity below optimal level which sometimes can be about 53 per cent of the available capacity and this has consequence of  severe revenue shortfall for the GENCOs that have to  pay for the expensive natural gas to power the thermal plants,

The reality is that Nigeria’s current transmission grid structure does not reflect the goal of energy mix touted by the government. It should, hence be reviewed to create a structurally divided regional grid, with the ability to take energy from diversified sources. It follows therefore, that Mini/Micro grid is the future for the country.

Furthermore, the DISCOs are having a suppressed tariff regime that is not cost effective. A tariff that was calculated on the wrong forecast that by 2018, the country would be generating over 8,000MW and failure to achieve that level of generation means the DISCOs are having more shortfalls in the market.

Revenue shortfalls adversely affect the ability of the DISCOs to make capital investment in metering, network expansion, equipment rehabilitation and replacement, which are critical for service delivery. The GENCOs should have assurance of constant gas supply and ability of the TCN to absorb all the electricity generated on full operation capacity, in order to sustain their viability and existence as business ventures.

The Federal Government intervention rescue package with the engagement of Siemens, should deal with the problems by revamping the generation, transmission and distribution infrastructure network across the existing national on-grid power supply chain.

Renewable energy is a thriving global industry, has Nigeria demonstrated enough interest in this regard?

Renewable Energy Association of Nigeria (REAN) remains the existing umbrella association for all Renewable Energy promoters enabling and encouraging the sustainable development of the Nigerian economy through Renewable Energy.

In a country with a weak national grid, the market opportunities lie in developing off-grid alternatives to complement the national grid. The off-grid energy sector is fast emerging as one of the most exciting new sectors. With over 90 million Nigerians off the grid and with another 30 million with less than four (4) hours a day of on-grid power, the opportunity is enormous.

Imagine a situation where the vast potentials of solar, wind, biomass energy system, waste-to-energy plants, land fill gas plants, and hydro power are harnessed to help close Nigeria’s energy gap. The possibilities are endless.

The rise of solar as a renewable energy source and the various technological advances to improve battery technology and photovoltaic capacity is changing the lives of millions of people in rural communities and even in cities where grid power is insufficient. Currently, only one off-grid company in Nigeria is a household name ~ LUMOS. But there are many more coming up behind them ranging from  Solar Home Systems to larger standalone system, IPPs, mini-grids.

When it comes to hydro, Nigeria also has vast untapped potential. The Federal Government has committed to completing huge hydro power projects including the 3,050 MW Mambilla projects, 700-MW Zungeru and 30MW Gurara. There are several smaller hydro projects lying idle. A 2013 study by the United Nations Industrial Development Organization (UNIDO) showed that six hydro power sites including: Ikere Gorge Dam, Oyan Dam, Bakalori Dam, Tiga Dam, Challawa Dam, Doma Dam have huge hydro power potential.

Revamping these abandoned dams around the country will deliver 350MW of hydro power which can serve about 350,000 people.

Among renewable energy sources which one best suites Nigeria?

Individuals and businesses in Nigeria are popularly using renewable energy solutions ranging from

pico-solar products and solar homes systems to stand alone solar systems – devoid of  toxic fumes from fossil fuel generators as well as a noise free environment.

The Nigerian Government has therefore prioritized the exploitation of renewable energy sources to complement the limited power generation and supply and to provide clean and cost-effective electricity especially to unserved and underserved rural areas, economic clusters and Federal Universities. The Rural Electrification Agency (REA) is currently implementing multiple off grid electrification programs with the support of the World Bank, African Development Bank and the private sector, mostly through the deployment of solar power to electrify, homes, communities and businesses.

The Federal Government, Sterling bank and Virtus Energy Solutions Limited have concluded arrangement to enhance power production for small businesses in Nigeria. The project will provide electricity access to over 80,000 shops across 16 economic clusters, empower over 340,000 micro, small and medium size enterprises.

 

 How much can you say Nigeria Loses perhaps yearly in the face of her energy crises?

.The Power Sector Recovery Plan, a document that outlines reforms required to ramp up grid power states that the national economy is losing $29.3 billion annually, due to the lack of adequate power.

StarCore Nuclear Group has put proposal for establishment of 23 mini power stations across the country can you give update?

Our current proposal to the Federal Government of Nigeria is to establish twenty-three (23) StarCore Nuclear modular/mini power stations in selected remote locations across the country. The selection of the location is based on the strategic areas of economic activities which includes heavy manufacturing, mining operations, large-scale agricultural undertakings and huge commercial clusters which require adequate and constant electricity supply on 24/7.

Developing nations need power if they are to grow their GDP and provide the basic needs of their citizens. The StarCore design was established specifically to meet the requirements of these applications, with the vision of being able to provide the vital resources of water and electricity to those most in need. And being small we can bring the power to where it is most needed. The nuclear power plants will be located in those targeted large scale industrial, mining, agricultural and commercial areas in Nigeria.

TREDIC StarCore is the manufacturer of Generation IV Nuclear Power Plants with Small Modular High Temperature Gas Reactors (HTGRs), which offer the ultimate in safe design and bring the benefit of having no possible failure scenarios during operations. Our plants are specifically designed for remote operation in countries that do not have a nuclear regulatory commission or the ability to meet maintenance, refueling and operational standards. This is NOT conventional nuclear.

StarCore naturally respects all forms of sustainability, but nothing comes even close to nuclear power in terms of its effectiveness. A typical StarCore plant produces 10,000x as much energy per square meter of space as wind and solar combined.

We therefore see StarCore as the future of global energy, with the realistic potential for a major IPO, quite possibly the largest in history, in less than a generation. This confidence is borne out of conversations with nearly 60 Countries in the past two years and vast demand (almost unfulfillable) for our product globally.

StarCore designs include the 200, 400, and 600 series with 2, 4 and 6 fully independent reactors respectively. StarCore plants are designed to be clustered together into load-following micro-grids but can also connected to existing grids and renewable plants where they can provide dispatch able energy. All plants are available with water purification systems, are fully automated, are remotely monitored and can be shut down by satellite link. These links are also available to provide high speed internet service to the local communities.

The plants are available in three different outputs, as follows: 

BLOCK ONE – These plants have 35 MWt reactors that provide 14 MWe each, so a Series 200 would produce 28 MWe. They are designed for small communities with limited industry and modest water requirements.

BLOCK TWO – The Block Two 50 MWt reactors produce 20 MWe each for small towns and larger associated industries. A 400 Series Block two would produce 80 MWe, and a 600 series would produce 120 MWe.

BLOCK THREE – These plants are the Nation Builders. They are rated at 150 MWt reactors and produce 60 MWe, and designed for remote cities, edge of grid, or new grid construction. Each 600 Series Block Three plant will produce 360 MWe.

All plants can be linked to each other, and the consumers, by StarCore High Voltage DC transmission lines, which are more efficient than AC lines and do not require the constant control of reactive power needed – and the DC is inverted into AC at the consumer point and can be synchronized with locally generated (including renewable) electricity if needed.

All plant construction, licensing, operation and decommissioning costs are borne by StarCore (on a Finance, Build, Own, Operate & Decommission basis) without incurring financial burden to the Government and the tax payers. But would only require a long term Power Purchase Agreement (PPA) to be put in place for say 25 to 40 years; and also the Government Sovereign Guarantee (SG) through the Ministry if Finance to help the investors obtain project finance from the international lending market.

StarCore installations can be developed to provide power as both an ‘on-grid’ solution as well as an ‘off-grid’ solution. The cost of energy production will make StarCore comparable with other forms of generation such as renewable (wind, solar, hydro) and coal when it comes to an off-grid solution. When providing off-grid power and heat direct to remote communities and mining operations, StarCore is significantly cheaper than diesel and natural gas generation.

In addition, a StarCore installation can directly provide heat for industrial purposes, community heating or cooling (absorption chilling), agricultural purposes, water purification and other purposes required by the community. Other electricity generating sources cannot do so without contributing the GHG emissions that we are trying to avoid.

TREDIC StarCore will continue to provide funding for education of the next generation of Nuclear Students, Physicists and Scientists through university exchange, outreach, commercial best practice and the development of test reactors within select University campuses with Nuclear Engineering course programmes.

 What is the commercial viability of the initiative.?

The total cost of power provided by StarCore is between 30% and 10% of the cost of power at remote sites, and StarCore provides a local smart grid to manage energy usage for both industry and communities.

The plants also provide full satellite communications and internet infrastructure to the most remote areas and can be built in record time (less than 2 years); what is more  is that they are just as at home in both the city centre and the most remote locations on earth. With their small size and ease of modular mass construction technology, they can almost be built anywhere, in any environment, both on land and at sea.

StarCore has recently been the subject of two in-depth Due Diligence studies that examined the Design and Business Plan from three main area: (1) is the technology sound, (2) can it be licensed and (3) is it commercially viable.  The first of these studies was in the application for the first two site licenses in Canada, and was conducted by the Canadian National Laboratory.  This resulted in StarCore passing Stage One of the license application for the sites in Chalk River, Ontario, and Whiteshell, in Manitoba.

The second study was commissioned as part of a large investment in the StarCore, and conducted by DBD, and independent nuclear consultant in the United Kingdom.  This study also resulted in a glowing endorsement of StarCore Technology, Licensing, and Business Plan and commercial viability.  The first study is the property of CNL, but the StarCore application is available on request.  The second study is available and we will be glad to provide it.

 

How would it operate, is it a Joint Venture initiative?

StarCore is the only company with a Build-Own-Operate-Decommission (BOOD) Business Plan. We finance our own plants with the client only committing to purchase the off-take (for example electricity or water) over a contracted period of time. StarCore is a full life cycle manager, and we do not sell the plants or technology. Instead we negotiate a long term (25 to 40 year) Power Purchase Agreement (PPA) with the consumer and then we obtain the license, construct the plant, run the operation, and decommission the facility at the end of life – and our modular design allows for 1-2 year construction after site selection and licensing. And we set up a fund to decommission the plants, so that at the end of the plant life equipment and materials are returned to StarCore for recycling or disposal.

The consumers are not required to raise capital for the StarCore plants, nor do they need to be involved in licensing, fuel logistics, plant operation or invest in power distribution equipment. All we need from the Nigerian Government is obtaining the Sovereign Guarantee (SG) through the Federal Ministry of Finance and by extension the Central Bank of Nigeria. This Sovereign Guarantee is required by the international investors to secure funding for the power project. Remarkably, this unique SG funding method ensures that there is no financial burden on the Government purse and no single kobo of Nigerian tax payers money will be expended.

What is the total cost of the project and the timeline?

The total cost of implementing StarCore Nuclear mini modular power plants in Nigeria, is divided into three parts: (1) the Power Purchase Agreement, which would be paid as the power is supplied. (2) the cost of expanding, training and operating the Nigeria Atomic Energy Commission (NAEC), and Nigerian Nuclear Regulatory Authority (NNRA) and  (3) the cost of establishing a joint StarCore/NAEC/NNRA site selection and licensing program.  The costs of all three elements have been analyzed by StarCore and would be expected to be the subject of negotiations with the various administrations.  We are in the process of negotiating similar costs with other countries, but there is a general agreement – backed up by the independent analysis by DBD – that the full cost of installing StarCore energy in a developing country is far lower than any other power source or technology.  And in addition, StarCore would bring in local investment and expertise in the modular nuclear market, offering the possibility of plant exportation to other countries in Africa.

If, by the end of this year 2019 or thereabout, the Federal  or State Government of Nigeria gives approval to the StarCore Nuclear power project with issuance of the requisite Sovereign Guarantee and Power Purchase Agreement for a period of 25-40 years, the investor TREDIC StarCore will start the project in 2021//22.

, Tell us about your group and why we should believe in your rescue capacity?

 

StarCore Nuclear is a partnership between British HQ’d Infrastructure developer and investor TREDIC Corporation and Canadian HQ’d StarCore Nuclear Inc (collectively, the founder shareholders).

It is a ten-year-old clean energy company operating in the highly innovative, risk free, extremely safe, and specialized Small Modular Reactor (SMR) power generation sector; utilizing fully automated satellite-monitored advanced High Temperature Gas Reactors (HTGRs) to provide fail safe clean electricity, thermal energy, water, desalination and telecommunications infrastructures to both remote off grid locations, and to major conurbations around the world.

StarCore has plans for a major generational global roll out around the world. Small Modular Reactor (SMR’s) are the highly disruptive next generation of nuclear power and should not be viewed as conventional nuclear power. They are known as ‘Generation 4 Nuclear’ and are completely different.

Nuclear is slowly moving away from the large scale Multi-Billion USD Generation 2/3 pressurized water reactors (PWRs) and into much smaller, more mobile, modular, safer (much safer – in fact 100% safe) and far lower budget nuclear power. Power that can be used for electricity, fresh water production and food security, district heating and cooling, satellite and communications, the retrofitting coal fired power stations and the powering of commercial shipping fleets and cruise liners.

StarCore Nuclear Small Modular Reactors (SMRs) design is inherently safe as adjudged by the International Atomic Energy Agency (IAEA), which means it cannot overheat and would shut down automatically when there is a problem in operation.

The total cost of power provided by StarCore is between 30% and 10% of the cost of power at remote sites, and StarCore provides a local smart grid to manage energy usage for both industry and communities.

StarCore utilizes TRISO fuel which is widely available throughout the world. The reactors that hold the fuel are 30 meters below the ground. A typical plant will house between 2-6 reactors. These reactors are built by BWXT, the organization that supplies the USA Naval fleet with their nuclear fuel. It is IMPOSSIBLE for terrorists to do anything with the fuel and it cannot be weaponised under any circumstances. The plants are also satellite monitored and controlled and can be shut down from remotely if required.

Licensing and permitting are far easier and simpler than conventional nuclear power plants.

The anticipated core lifetime is 5 years. At the end of every fifth year of operation, the graphite fuel prismatic blocks and spent fuel will be removed from the reactor pressure vessel and will be transported from the plant site to the repository site in Canada using the certified (Type B) transfer cask. The fuel is encased in spheres that are coated with pyrolytic carbon – as used on the Space Shuttle tiles – and Silicon Carbide, a very, very tough coating, and is completer safe during transport. StarCore intends to work with the Canadian government to process the spent fuel, but this cannot occur until we have sufficient political and financial resources; we will pursue this at the same time as the campaign to reprocess and burn Light Water Reactor waste fuel.

The plants are developed on a BOOM&D basis (build, own, operate, maintain and decommission) over a 25 to 40 year power purchase agreement. The execution of the power plants will not result in any financial burden to the public purse and no single kobo of tax payers money will be committed.

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Satellite and telecommunications infrastructure bringing high-speed broadband internet, to even the most remote areas.

Can be built almost anywhere – in any environment, for both on-grid and off-grid power and water solutions.

The U.N. are also supporters of StarCore. The StarCore business model fits very closely with the U.N.’s sustainability and clean energy agendas. StarCore is in regular dialogue with the U.N. and the Secretary General’s staff and close associates have been made aware of our motives and ambitions.

StarCore Nuclear has initiated contacts with the leading  nuclear regulatory agencies in Nigeria including Nigeria Atomic Energy Commission (NAEC), and Nigerian Nuclear Regulatory Authority (NNRA), with a view to obtain due diligence report on nuclear power plants installations in the country.

Having done your due diligence of the industry can your proposal survive the test of time?

DBD Group has provided a robust Due Diligence Report detailed in Document Reference No. DBD/16201/TEC/RP/001, to determine the investment viability of StarCore Nuclear and StarCore High Temperature Gas Reactor (HTGR) Technology. DBD is an international organization that engages world leading experienced consultants to carry out due diligence for nuclear installations. DBD credentials span across five core capabilities including (a) strategic and technical consulting; (b) process and chemical engineering; (c) simulations and modeling; (d) safety, security and environment; (d) nuclear site support.

DBD independent due diligence review of the StarCore High Temperature Gas Reactor (HTGR) project is required to support decision making for key stakeholders in the project.

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