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Nigeria Power Report Q4 2010
Business Monitor International, Oct 2010, Pages: 56
Nigeria Power Report provides industry professionals and strategists, corporate analysts, power associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Nigeria's power industry.
In this new report, BMI forecasts that Nigeria will account for 2.29% of Middle East and Africa (MEA) regional power generation by 2014, with the country struggling to narrow the supply/demand gap. BMI’s MEA power generation estimate for 2010 is 1,221 terawatt hours (TWh), representing an increase of 4.0% over the previous year (where markets were depressed by the economic slowdown). BMI are forecasting an increase in regional generation to 1,463TWh by 2014, representing a rise of 19.8% between 2010 and the end of the period.
MEA thermal power generation in 2010 is estimated by BMI at 1,138TWh, accounting for 93.2% of the total electricity supplied in the region. Their forecast for 2014 is 1,333TWh, implying 17.2% growth in 2010-2014 that reduces slightly the market share of thermal generation to 91.1% – thanks in part to environmental concerns that should be promoting renewables, hydro-electricity and nuclear generation. Nigeria’s thermal generation in 2010 will have been an estimated 15.5TWh, or 1.36% of the regional total. By 2014, the country is expected to account for 1.91% of regional thermal generation. Direct burning of wood and waste materials will have been the dominant energy source for Nigeria in 2010, accounting for an estimated 77.0% of primary energy demand (PED), followed by gas at 12.3% and oil with a 9.5% share of PED. Regional energy demand is forecast to reach 1,074mn tonnes of oil equivalent (toe) by 2014, representing 16.3% growth over the period since 2010. Nigeria’s estimated 2010 market share of 11.36% is set to rise to 11.88% by 2014.
Nigeria now takes fifth place above Saudi Arabia and Kenya in BMI’s updated Power Business Environment Ratings. Its position should prove secure over the medium term, although South Africa just two points above is likely to remain out of reach. Import dependency is average for the region, while the proportion of renewables is relatively high. However, the power sector is not particularly competitive, with limited progress towards privatisation.
BMI forecasts that Nigeria’s real GDP growth will average 7.42% a year between 2010 and 2014, with 2010 growth assumed to be 7.50%. The population is expected to expand from 158.3mn to 174.6mn over the period, with GDP per capita and electricity consumption per capita forecast to increase by 114% and 23% respectively. Power consumption is expected to increase from an estimated 25.4TWh in 2010 to 34.6TWh by 2014, providing an improvement in market coverage on the basis of 10.5% average annual growth (2010-2014) in electricity generation. Losses of more than 2.5TWh during power transmission and distribution mean the market is likely to remain tight for several years.
Between 2010 and 2019 BMI forecast a 135.6% increase in Nigerian electricity generation, near the top of the MEA range. This equates to 58.2% in 2014-2019, up from 48.9% in 2010-2014. PED growth is set to rise from 21.6% in 2010-2014 to 27.6% in 2014-2019, representing 55.1% for the entire forecast period. Hydro-power use is forecast to increase by 29% between 2010 and 2019, while thermal power generation is expected to rise 184% during the period, fuelled largely by natural gas. Details of the longer-term BMI power forecasts can be found later in this report.
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