Strategy for a Gas based Smart Energy Infrastructure in · PDF fileStrategy for a Gas based...

Strategy for a Gas based Smart Energy Infrastructure in Africa

Izebe EgwaikhideVice President / Managing Director, E.ON Ruhrgas Nigeria Limited

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Contents

1. Overview of African Gas and Power Markets2. Gas Based Smart Energy Infrastructure Concept3. Market communication and smart grid 4. Security in a Smart Energy Infrastructure5. Business Opportunities and Collaboration Space6. E.ON’s Involvement

0. Contents

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African Oil and Gas Development: New Frontiers (1)

1. African Gas and Power Markets

New frontiers emerging besides existing oil and gas producing countries:

Mozambique: e.g. MambaTanzania: e.g. WindjammerGhana: e.g. Jubilee field

New exploration activities further west from Ivory Coast to Gambia

Encouraging gas focused exploration activities in Eastern Africa

Venus

Jubilee

Mamba South 1

Windjammer, Lagosta, Camarao

Tanzania

Mozambique

Ghana

4Nigeria Presentation ER SGF LNG

African power pools and interconnections

Adapted from sources: Izebe Egwaikhide, Field Research Report Forschungszentrum Karlsruhe 2000 and Power Africa 2004, South Africa

EAPP

SAPP

CAPP(PEAC)CAPP

(PEAC)

WAPP: West African Power Pool

SAPP: Southern African Power Pool

CAPP: Central African Power Pool

NAPP: North African Power Pool

EAPP: East African Power PoolDRC Ingahydro

WAPP

Zone B

Zone A

Planned

Existing

NAPP(COMELEC)

NAPP(COMELEC)

1. African Gas and Power Market

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Western Africa: Ongoing Developments: WAPP

WAPP 330 kV coastal transmission backbone

AccraLom

ePorto Novo

AbujaGhana

NigeriaBenin

TogoCóteD’Ivoire

NigerMali

Burkina Faso

Abijan

Guinea

Senegal

Liberia

Sierra Leone

Gambia

Guinea Bissau

Interconnect to NAPP + Desertec

Planned

Existing

From Inga (CAPP+ SAPP + EAPP)

Source: WAPP – Master Plan; Field Research Izebe Egwaikhide, 2002


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Source: NEPA Field Research: Izebe Egwaikhide, Compass Finesse Ltd., Karlsruhe Institute of Technology, 1995-2001

African Power Sector Challenges: Nigerian Example

Gas shortage for gas fired turbinesWater shortage in existing hydro systems due to unplanned run Generation in mid and southern sections of country Longitudinal Networks (few redundancies) Imbalance / strain / high losses in gridInadequate SCADA facilitiesBottlenecks in maintenance and rehabilitation Potential in other generation types e.g. wind, solar, Coal, (small) hydroMicro-Grids and Off Grid Power Generation: Rural Power GenerationRenewable Energy Master-Plan


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Economic Competiveness and Energy Supply Requirement

• Development of competitive economies in Africa requires amongst others:• Improved and maintained macro economics; business environment as

well as regional integration and collaboration• Modernized tax systems; business policies and regulations• Improved education systems and alignment to development targets• Improved physical infrastructure (transport; water; housing etc)• Enhanced capabilities of the financial sector to finance (regional)

infrastructure projects• Economic diversification based on cluster development (e.g. around

natural resources such as natural gas)• Aligned interests of African nations and regional economic organizations

around competitiveness• A key element for competitiveness is comparably cheap, affordable and

reliable energy in the domestic and regional markets in Africa

2. Smart Energy Corridor Concept

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Socio-Economic Challenges

Financing:(Energy) Infrastructure development and capital requirementsProject finance capacity for large scale industries and SMEsGlobal recession and influence on the finance industry

(Predictability in) policy and regulatory environment: Harmonization of fiscal, regulatory, legal and investment regimesInnovation and growth:

Capacity development: in institutions of education and companiesInstitutions of higher education as centers of technological innovation

Energy (gas and power) technologyDownstream market development for gasSustained peace and stability (security)Trends in global (gas) supply: e.g. through shale gas revolutionClimate concerns (e.g. fuel substitution: diesel via gas in power / transportation


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Gas-based Economic Cluster: Engine for Development

LNGEducation and Research


Power Supply Cluster

Agriculture Cluster

Energy SectorConsulting Services

Government and Regional Economic

Agencies, NGOs

Gas-based Petrochemicals

EPCContractors

Fertilizers

Transportation(CNG)

E&PGas

Gathering & CPF

Transmissionand

Distribution

Ammonia

LPG

Cooking Gas Cluster

CDM Projects Cluster

Metal Industry

Transportation(Electro)

Water Supply Cluster

Bio Fuel(Gas)


African Energy Corridor Concept: Smart Power Grid IntegrationSPAIN Europe (Mediterranean Ring)

Jordan / Israel

Updated version from sources: Izebe Egwaikhide, Field Research Report Forschungszentrum Karlsruhe 2000 ;and Power Africa 2004, South Africa

Gas-to-Power as a key driverJoint Storage Infrastructure for Gas (Market Hubs and Power-to-Gas) Integration of Regional Power PoolsCoal-to-PowerRenewables: Hydro, Solar in Desert and Sahel RegionsSmall gas and renewables based micro grids e.g. for Rural EnergyHVDC and HVAC TransmissionEnergy Mix for:

Secure and Cheap Energy Supply for Competitive DevelopmentSustainable Energy Development of African StatesCreation of a viable Energy Market

Market to unlock even more gas-focused exploration and production

DRC IngaHydro

Angola Gas

Algeria Gas

EthiopiaHydro

Nigeria Gas


Desertec

Namibia Gas Mozambique

Gas

Tanzania Gas

GhanaGas

Egypt GasLibyaGas

Cameroon: GasEquatorial Guinea: Gas

Planned / concept

Existing

Renewable Planned / concept

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Gas Development Plans


Examples:Nigerian Gas Master Plan (NGMP)Cameroon Gas Master PlanEquatorial Guinea 3G Project (Gas Master Plan) MozambiqueTanzaniaAlgeriaEgypt

Outlook on Industrial Development:Gas-to-PowerGas-to-Petro-Chemicals; Gas-to-Heating (Industrials); CNG; LPG; (Domestic LNG)E- and Gas-based Mobility (Fuel substitution for imported diesel and petrol)Gas Storage InfrastructurePower-to-Gas (Storage of excess supply from renewables) and in off-peak)Energy Efficiency

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African Gas Development: New Frontiers (2)

Nigeria

NEPAD Targets (Regional Supply and Export):

West African Gas Pipeline (WAGP)Trans-Sahara Gas Pipeline

New LNG Export Terminals:NLNG T7 / T8 , BrassLNG, OKLNGEG LNG Train 2; Angola LNG Train 1 (2?)Mozambique; Tanzania; Cameroon: Kribi

Proposed Small Scale LNGFirst Proposed LNG RegasificationProjects Integration into global commodity markets (LNG, NGLs, LPG, Ammonia, Fertilizer)Solution of security situation in Somalia important for energy corridor development in Eastern Africa

Trans-SaharaTrans-Sahara

Cameroon

Equatorial Guinea

Namibia Mozambique

Tanzania

Egypt Algeria

Angola Planned / Concept

Existing

LNG Export

LNG Import


Libya

WAGP

Gabon

Ghana


Nigerian Gas Master-Plan

Diagram adapted from Source: NGMP Infrastructure Blueprint Presentation, David Ige, NNPC, 2009

Gas Flaring ReductionCreation of energy corridors in the country.

On-Grid: Combination of renewable energy power supply with gas-based base-load generation.

Micro-Grid (On- and Off-Grid) based on renewable energy as well as small gas fired turbines (CNG and LNG)

Gas for Industries (Petro-Chemicals etc)

Job creation through gas service companies

CDM Opportunities

QIT-Obigbo Pipeline: test-bed project for this structuring support process


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Generation

Transportation

Systems Services

Wholesales

Distribution

Sales & Retail

Metering & Billing

Regulator

ELECTRICITY

Generation

Transportation

Systems Services

Wholesales

Distribution

Sales & Retail

Metering & Billing

Regulator

ELECTRICITY

Production

Transportation

Systems Services

Wholesales

Distribution

Sales & Retail

Metering & Billing

Regulator

GAS

Production

Transportation

Systems Services

Wholesales

Distribution

Sales & Retail

Metering & Billing

Regulator

GAS

Market integration along value-added chains

Production

Transportation

Storage Services

Proc. & Trading

Distribution

Sales / Retail

Metering & Billing

Regulator

GAS

Generation

Transmission

Systems Services

Trading

Distribution

Sales / Retail

Metering & Billing

Regulator

ELECTRICITY

Sources: Izebe Egwaikhide: Multi-Utility Regulator Concept for Emerging Restructured National Utility Market: Forschungszentrum Karlsruhe 1999; E.ON 2006; AFREC: African Energy Commission

Upstream

Mid-Stream

Down-Stream Regional

Markets

Cross-regionalregulatorycoordination e.g. WAPP,SAPP, AFREC

Value-added chain

Electricity-Gas Convergence

Regulation


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Regulatory and Commercial Factors in Gas-To-Power: Nigeria

Proposed - Petroleum Industry Bill (PIB) and NNPC RestructuringNigeria Gas Master-Plan Infrastructure Process (NGMP)New gas tariffs approved (also for Manufacturing Industry)GSPA template developed and in use especially for Gas-to-Power

Power Sector Reform BillMulti Year Tariff Order (MYTO)Roadmap for Power Sector Reform / Ongoing PrivatizationRenewable Energy Master Plan

Partial Risk Guarantee from the World Bank for gas supply contracts to the power sector (PHCN)

NGL and LPG Contracts not included; Flows for regulated and unregulated contracts; SA = Strategic Aggregator

Gas (E&P)Supplier

Gas Gathering

& CPF

Gas Transco

GasDisco

Genco/ IPP

Power Sector

Customers

Gas ProcessingAgreement

Gas Interconn-ectivity

Agreement

Gas Transportation

Agreement

Title Transfer Point

Power Supply Contract

Gas Sales and Purchase Agreement (GSPA): Tripartite with SA

Bulk Trader

Power Purchase

Agreement

Transco Disco

Power Sales

Contract


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Communication and contractual challenges: Nigerian example

Customer

(Smart Metering

Point)

Settlements / Invoices

Schedules

Deal / Confirm

ations

Metering Data

Settlement &

Invoicing

Billing

Dispatch Plans

Tariff, Loads,

Metering Data

Transco Distribution Company

(Disco)

Regulatory Authority

(NERC) Genco / IPP

3. Communication challenges and smart grids

(Bulk) Trader

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Information and communication infrastructure challenges

Web Servers

Access Network

Back-End (and Middle-Tier) Front-End

Database Cluster

Application Servers

Data Ware-house

Server Farm

Utility OfficeASP (consolidated data center)

Client Workstations

VLAN

Internet Firewall

Corporate Partners

Systems Administrator Workstations

Mobile Workers Remote A

IP-Telephony

Corporate VPN

Clients (Smart Meters)

Source: Izebe O. Egwaikhide; Georg Bretthauer: Knowledge-based Systems Development in Deregulated Markets: IntegratingProcess and Security, PES2005), 11 – 15.07.2005, University of KwaZulu Natal, Durban, South Africa

3. Communication challenges and smart grids

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Integrated corporate and homeland security in energy corridor development

Business Unit

Level

System-/Project-

Level

Corporate Level

CorporateIT Security

Guidelines and Policies

Department IT security guidelines

and policiesUser

Representatives

Utility Management

Chief IT Security-Officer

Business Unit- (IT) Security Officer

Project-/System-(IT) Security

Project-/System-IT Security guidelines

and policies

PoliciesSecurity Process

Owners

G. CERT 2G. CERT 1 G. CERT n

e.g. NNPC-CERT

e.g. PHCNCERT

e.g. NITELCERT

Corporate Level CERTs

Regional / Governmental CERTS

CERT Organizations and Industry Sector Security Boards

Utility Company

Utility-CERT-Org.?

IT Security Manageme

nt Team

ITCoord.Board

Source: Lecture: Izebe Egwaikhide, Proceedings of the Inaugural IEEE PES Conference and Exposition in Africa Durban South Africa 2005

4. Security in Integrated Smart Energy Infrastructure

CERT: Computer Emergency Response Team

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Opportunities and potential areas of collaboration: Examples

Gas focused explorationGas and power transmission grid (extensions)On-grid IPPs and Micro / Off-grid (captive or distributed) generationShared services for emerging market entities Ancillary services provision in restructured power marketsImprovement in service delivery and systems management

Customer relationship managementSmart grids (including smart metering)

Capacity developmentMarket communication processes and information systems

Communication protocols for market participantsStandardized contract templates (e.g. master trade agreements)West African Power Pool (WAPP) / Gas exchange (hub)

Cross- /multi-commodity markets development: Exchanges for gas & powerRegional and Global Energy trading & risk management

5. Opportunities and Collaboration Space

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Examples of E.ON’s activities in Africa

Private Sector Initiatives:E.ON Ruhrgas E&P involved in gas-focused exploration activities in Algeria with a local subsidiaryE.ON Ruhrgas Nigeria Limited, focused on developing E.ON’s LNG supply and technical partnership activities in Nigeria.Technical partnership with Oando Gas and Power on gas infrastructure Development of a pre-feed design for the South-East Franchise Area of the Nigerian Gas Master-Plan with Oando Gas and Power (Project Concluded in 2010)

Public-Private-Partnerships:Shareholder of the Desertec Industrial Initiative (DII)Member of the Steering Committee for the Nigerian-German Energy Partnership (NGEP) and the Energy Working Group of the German-Nigerian Bi-national Commission

6. E.ON’s Involvement

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E.ON is one of the world’s largest investor-owned power and gas companies, with more than 88,000 employees around the world and generated sales of over €112 Billion in 2011.

78,889Employees (at year-end)

6,524Investments

152,872Total Assets

5,438

9,239

112,954.0

1,718.4

1,144.8

2011

Adjusted EBITDA

Adjusted EBIT

Sales

Gas sales (billion kWh)

Power Sales (billion kWh)

in Mio €

E.ON – A global energy leader

6. E.ON’s Involvement

New Presence / Local Project / (Representative) Subsidiary / JV

Presence

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A note of warning

This presentation may contain forward-looking statements based on current assumptions and forecasts made by E.ON Ruhrgas Nigeria Ltd management and other information currently available to E.ON Ruhrgas Nigeria Ltd. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company, the estimates and concepts presented here. E.ON Ruhrgas Nigeria Ltd does not intend, and does not assume any liability whatsoever, to update these forward-looking statements or to conform them to future events or developments.

Strategy for a Gas based Smart Energy Infrastructure in Africa

Izebe EgwaikhideVice President / Managing Director, E.ON Ruhrgas Nigeria Limited

Strategy for a Gas based Smart Energy Infrastructure in · PDF fileStrategy for a Gas based...

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