Cummins Power Generation Nigeria Limited, one of Nigeria’s leading independent power providers (IPP) and part of the Cummins $19 Billion Fortune 500 Company, has rolled out action plan leading to the building of the 300MW Africa’s largest gas fired power plants with Sapele Power.
According to the Power Purchase Agreement (PPA) signed with Sapele Power, Cummins will invest in the construction, operation and maintenance of the plant to ensure continuous power supply and Sapele will then evacuate the power through the national grid.
The plant will operate on natural gas and utilise cogeneration waste heat recovery technology of Cummins gas engines, one of the most efficient on the global market, designed and manufactured in the UK, making the project both economically viable and environmentally friendly.
Sapele Power Plc (SPP) operates Nigeria’s second largest power plant with installed capacity of 1020 MW, capable of meeting the energy needs of around 750,000 homes at full capacity. Since its acquisition by Eurafric Power Limited in February 2014, SPP has come under new management with a mandate of transforming the plant into a power hub over the next 5 years.
Outlining some of the strategies to be deployed by the company to achieve the set target, Chairman, Sapele Power Plc (SPP), Mr Anthony Onoh explains, “we have put together a detailed business plan for the phased and sustainable actualization of this goal. The first phase of this plan focusing on capacity recovery is billed to bring plant output to 250MW by Q2 2016, with the return to service of a third Steam Turbine Unit. The second phase of the plan will triple plant output in the short-midterm through a mix of projects such as the present project with Cummins.”
“Sapele Power Plc, leveraging its parent company’s pedigree in the energy and Oil & Gas industry, is poised to facilitate the timely implementation of this project. Our growth plan is driven by strong transaction economics, a robust and expanding sector supported by favourable government and fiscal terms, and strong potential financial results’ Mr Onoh further explained. Satisfactory contractual framework for gas supply, transport, and power purchase coupled with the plants comparative advantage of ample land and water-front real estate are also contributing drivers.
We need to understand that the Buhari’ government’s effort to boost power production is imperative to long term growth and improving the standard of living in Nigeria. Projects such as the Cummins-Sapele deal are strong indicators that the private sector is investing in power generation.” He said.
Deepak Khilnani, Chairman of Cummins Cogeneration Ltd, the investor in the project, reaffirmed Cummins Power commitments to lighting up Nigeria, guaranteeing up to 99% power availability at all times, which is why Cummins is committed to investing and building gas fired power plants across Nigeria.
According to Deepak Khilnani, “With the gas fired power plants across Nigeria, the development of the power industry will significantly boost employment – construction, operation and plant services directly boost local jobs. The most significant medium term employment driver for these plants will also be to enhanced industrial growth.
As the country moves away from private diesel generation towards a reliable national grid, domestic manufacturing is likely to increase, reducing the nation’s dependence on imports and foreign currency.
“We have significantly invested in our after-market and maintenance capability as well as our sister company Powergas which is Nigeria’s largest compressed natural gas (CNG) operator so that we can deliver CNG when piped gas is not available – for example one of our plants in Lagos was down for less than a minute in 2015, operating at over 99% power availability,” said Deepak Khilnani.