School of Electrical, Electronic and Computer Engineering, University of KwaZulu-Natal
Durban, 4041, South Africa
Phone: +27-31-260-1246, Fax: +27-31-260-2727, Email: Davidsoni@ukzn.ac.za
Abstract \u2013 Power sector deregulation is a global phenomena but driven locally by a mix of complex forces peculiar to each country. Using a case-study example, this paper evaluates distribution (embedded) generation as an option for developing economies to ensure system stability and improve reliability.
A methodology for evaluating distributed generation (DG) services is proposed and a framework for integrating them into the restructured power system is presented and discussed.
Nigeria with an estimated population of 126.9 million people, surface area of 923800 square kilometers, a GDP of US$41.2 billion is the largest electricity market in Africa. The electric power industry is the largest single industry typically spanning much of the geographical area and serving all sectors of the economy. NEPA the state-owned monopoly utility is undergoing rapid restructuring and privatization. It maintains a varied portfolio of plants: oil fired, gas turbine, coal fired and hydroelectric power as shown in Table 1.
(I - III)
4 x 80
2 x 100
2 x 120
6 x 90
6 x 100
6 x 120
4 x 75
1 x 20
The country has an installed capacity of about 6.0GW and an average generating capacity of 3500 MW. Several isolated power stations exist and serve major cities, such as Calabar, Kaduna, Makurdi, Maiduguri, Minna and Suleja. These diesel units operate off-grid to serve specified loads. The generation pool comprises of 32% hydro, 44% gas, 23% oil, while diesel and small power producers (SPP) account for 1%.
The transmission system is made up of 5000 km of 330 kV lines, regional lines amount to 6000 km at 132 kV, while the 415 V reticulation network is 55143 km long. Nigeria\u2019s low electricity consumption of 85kWh per capita , served mainly by NEPA, makes it a highly under served market. Distributed (embedded) generation has been practiced in Nigeria but in a hap-hazard manner.
DG schemes are small modular generating machines ranging from kilowatts to few megawatts capacity, typically kilowatts up to 10 MW power plants at or near the loads, operating in a stand-alone mode or connected to a grid at the distribution or sub-transmission level [2, 3]. Table 2 shows a number of electric power generation technologies.
DG schemes may harness alternative energy resources such as biomass, wind, ocean tides and waves, solar, and geothermal. Small power sources have been developed and employed for industrial, commercial, space, underwater, and biomedical applications. Another area for DG application is in remote rural areas far removed from grid infrastructure. Here, integrated renewable energy systems (IRES) may be suited for these situations.
Since DG schemes are located on-site or nearby the location where the energy is used, they usually operate at the low voltage (i.e. 11kV and 33kV) supply chain of bulk electric power transport infrastructure. Their on-site location provides the opportunity for greater local control and more efficient utilization to boost efficiency and reliability .
The global recognition of the importance of involving the private sector in national infrastructure development has encouraged reform of the electricity supply industry (ESI). Market liberalization and industry privatization trend is not limited to the electricity industry, but also applies to the communications, petroleum, defense and other industries in many countries.
The poor performance of NEPA in providing reliable electricity supplies has influenced the decision of government to deregulate the industry by unbundling the single vertically integrated organization into three
transmission, distribution/supply sectors. Constituent companies will then be privatized and allowed to operate under competitive market principles . Figure 2 shows the proposed structure of the unbundled industry.
Under this structure, generating companies will compete with each other (that is horizontal unbundling) to export power to a single company controlling the high voltage transmission network which will then supply electricity to distribution companies controlling the low voltage network in their franchise areas of the country. An industry regulator will be setup to have oversight over the activities of industry participants to ensure fairness in all their operations and protect consumers\u2019 interests. The transmission and distribution sectors will operate as monopoly business in designated franchise areas, with strong oversight from the regulator. This arrangement is expected to transform the ESI into an effective, innovative and profitable industry.
A factor in favor of distribution generation especially in developing economies like Nigeria is the unreliability of monopoly electric utilities to meet the electricity demand by large industrial customers\u2019 . Hence distribution or small industrial (i.e. embedded) generation should be encouraged, because of their benefit to industrial customers, whilst complementing the activities of NEPA\u2019s electricity distribution service. The benefits brought about by DG to such large industrial customers include :
Distribution generation in Nigeria is generally a point-to- point radial connection from the generating machine straight on to the load centre. Examples are major cities such as Calabar, Kaduna, Makurdi, Maiduguri, Minna and Suleja. NEPA\u2019s electricity distribution service to consumers cover a wider geographical area involving both radial and mesh networks used to supply electricity to several customers on the low voltage end of a bulk electricity delivery industry value chain.
Figure 3 shows an application of embedded generation interconnected with the grid to serve large customers and provide grid support.
Domestic customers and small businesses with
Domestic Generator can alsogenerate electricity
which flows back onto the Distribution network
Industries with CHP
generate electricity which
flows back to the network
Such innovative deployment of typical DG technologies can serve the coastal regions like Lagos, Warri and Port Harcourt where wind energy can be harnessed. Major manufacturing and mining cities such as Kaduna and Jos in the interior as well as Lagos can benefit from CHP technologies as well as surrounding settlements. In Nigeria, small-scale on-site distribution or embedded generators have been established along side NEPA\u2019s 11 to 33kV distribution networks. These small generators (mainly diesel or furnace oil-fired) supply power to industries and in some cases communities/estates attached to them, through indigenous private distribution networks. NEPA has not taken advantage of the opportunities provided by DG to alleviate the problem of power shortage especially in rural electrification program in the country. Over emphasis on costly conventional large centralized electricity supply facilities has deprived many customers the benefits that DG located in their area could provide.
Under deregulation, the delivery network is the vehicle through which competition occurs. The stronger the network, the less incidents of line congestion, the easier it will be to site generating plants across the system. The dispersal of generation across the network will facilitate competition in the generation sector.
In liberalized electricity markets, four key strategic issues relating to distributed generation (DG) are high on the agenda of any distribution company , namely:
For Nigeria, the on-going ESI restructuring process needs to address pertinent issues regarding DG and their impact on the operations of local Distribution Network Operators (DNO):
areas have the monopoly status as the sole provider of electricity in their region, especially in rural areas, and are they required to oversee the operations of DG connected to their networks, as they affect their wider network system integrity? The main concern here will be how to stop DNO abusing their monopoly power.
networks after deregulation and privatization, taking cue from the current performance of NEPA\u2019s distribution sector .
To encourage investment and promote competition, the following is proposed: introducing DG into the power planning mix and load forecasting, the standardization of network requirements (DG) and open access to the network. Both the DNO and DG operating and maintaining electricity distribution service in their franchise area must be accountable to the customers and the industry regulator. These should be clearly spelt out in the policy, which should undergo development as the new era unfolds.
It should be noted that there will be financial, geographical and environmental constraints on quick capacity expansion of generation, transmission and distribution facilities which
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