Industrial Energy Management
Practices in Nigeria
By
Prof. A. S. Sambo, OON, NPOM
Director-General, Energy Commission of Nigeria
Being Country Paper Presented at the UNIDO EGM on Industrial Energy Efficiency and Energy
Management Standards Held from 21st – 22nd March 2007 at Vienna
Outline
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Introduction
An Overview of the Nigerian Industrial Sector
National EE & C Activities
Energy – Efficient Appliances in Nigeria
Walk-through Energy Audits
Barriers to EE & C Programmes
Opportunities for Collaboration
Conclusion
Prof. A. S. Sambo
2
Introduction
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Population ( 2006 census): 140 million
Location/Size: West Africa/ 923,770 square kilometers (356,700
square miles), slightly more than twice the size of California
Languages: English (official), Hausa, Yoruba, Ibo
•Total Energy Consumption (2002E): 275billion kWh (0.2% of world total energy consumption)
•Fuel Share of Energy Consumption (2002E): Oil (67.3%), Natural Gas (25.1%), Hydroelectric
(7.5%), Coal (0.1%)
•Energy-Related Carbon Dioxide Emissions (2002E): 91.94 million metric tons (0.4% of world
carbon dioxide emissions)
•Per Capita Energy Consumption (2002E): 1,964.3 kWh (vs U.S. value of 99,356.3 kWh)
•Per Capita Carbon Dioxide Emissions (2002E): 0.66 metric tons (vs U.S. value of 19.97 metric tons)
•Energy Intensity (2002E): 2.712 kWh/ $ nominal-PPP (vs. U.S. value of 2.738 kWh/$ nominal-PPP)
Prof. A. S. Sambo
3
Introduction Contd….
7%
TRANSPORT
8%
3%
12%
INDUSTRY
RESIDENTIAL
70%
Energy Consumption by Sector ,
2005
Residential
Industry
Transportation
Commercial/Public Services
Others
Energy Consumption by Sector, 2005
Prof. A. S. Sambo
4
An Overview of the Nigerian Industrial Sector

Currently, the growth rate in GDP is
about 6% with the share of
manufacturing sector being only
about 5%.
Item
unit
2005
2010
2015
2020
2025
2030

Agriculture
[%]
40
36.7
34
30.6
26.9
20
Constructio
n
[%]
3.04
4
4.93
5.54
5.98
8
To industrialize Nigeria :
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Mining
[%]
0.387
0.45
0.5
0.55
0.6
1
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Manufacturi
ng
[%]
7.25
9.1
11.4
14.2
17.6
22
Energy
[%]
9.203
8.1
5.97
4.91
4.19
4
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Source: Presidential Report on Industrializing Nigeria, 2006
Prof. A. S. Sambo
In 2005, manufacturing sector
contributed just 7.25% to GDP);
the share of manufacturing
sector in GDP must be higher
than 15%
per capita income must lie
between US$4,232 and US$6,350
in PPP terms.
attain the lower middle income
average level by 2028 if the
economy grows at an average of
7% per annum, 2021 if the
economy grows at 10% per
annum and by 2019, if the
economy grows at a very
optimistic mean of 11.5% per
annum
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An Overview of the Nigerian Industrial Sector – Contd…
S/
N
SUB-SECTOR
CAPACITY
UTILIZATION
1998
1999
2000
1.
Food, Beverages, Tobacco
31.5
36.1
32.6
2.
Textiles, Wearing apparels, Footwear, Leather
products, Carpet/Rug
33.1
39.2
37.8
3.
Wood & Wood Products, including furnitures
27.2
29.6
26.5
4.
Pulp, Paper & Products, Printing & Publishing
28.9
28.1
27.9
5.
Chemical & Pharmaceutical
30.6
25.6
29.0
6.
Non-Metallic Mineral Products
37.2
45.5
35.5
7.
Plastic, Rubber & Foam products
27.2
35.5
37.8
8.
Electrical & Electronics
27.0
35.5
37.8
9.
Basic Metal, Iron & Steel and Fabricated Metal
products
27.2
33.9
14.5
10.
Motor Vehicle & Miscellaneous Assembly
26.2
24.8
30.4
Average for the Year
29.6
32.4
29.7
Prof. A. S. Sambo
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30% average capacity
utilization
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Old, obsolete,
inefficient industrial
equipment/
machinery;
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Inadequate and
inefficient energy
supply and use
situation is the main
cause of Nigeria's
poor industrialisation
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National EE & C Activities
The Provisions of The National Energy Policy on EE & C are:
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Efficient and cost-effective consumption pattern of energy
resources;
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Importation of the more energy-efficient
equipment/appliances;
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Promotion of awareness of the benefits of EE & C;
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Development of codes, standards, regulations and
guidelines on EE & C.
Prof. A. S. Sambo
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National EE & C Activities Contd…
NATIONAL AWARENESS CREATION/ CAPACITY
BUILDING
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Sensitization Workshop on Energy Efficiency – 1993, 2001, 2002
National Sensitization Workshop on Energy Efficiency in Industry –
1998 (with support of UNIDO)
Industrial Energy Efficiency and Demonstration Walk-Through
Energy Audit – May 2001, 2003,2004 (UNIDO Technical Assistance)
NNC- WEC Africa Forum on Energy Efficiency – January 2007
“Nigerian Energy Labeling Program for Appliances” – proposed to
GEF/UNDP for support – at negotiation stage
Approval by Government for establishment of a National Centre for
Energy Efficiency and Conservation.
Prof. A. S. Sambo
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Energy Efficient Products in Nigeria
Prof. A. S. Sambo
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Walk-through Energy Audits
Energy Savings Potential
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Energy efficiency in the industrial sector in Nigeria is low;
Over 40% of total energy used is wasted on old, obsolete
and inefficient equipment;
25% saving potential exists through good housekeeping
measures alone;
Retrofitting in industries could save over 35% of energy
currently used;
40% of electricity consumption for air conditioning could be
saved through more efficient equipment and practices;
30% and 35% saving potentials can be achieved in
residential and transport sectors respectively;
Prof. A. S. Sambo
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Walk-through Energy Audits
Power Outage Cost Analysis
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While electricity from PHCN accounted for about 60% of total electricity
consumption by the firms, the average cost per kWh is N8.5. Auto-generation
accounted for only 40% of electricity consumption, but the average cost was
N40.47 per kWh. The audits show that 262 firms spent nearly N2 billion on
privately supplied electricity in 2003.
Firms lost 900 working hours to power outages in 2003;
Assuming an eight-hour working day, this translates to about 113 working
days in 2003. Also, about 35% of the firms reported having to shut down
production at one time or the other in the year as a result of power outages.
The annualized cost of generator to the firms is N318.63 per kW.
Annualized other capital items like generator house (N282.57); stabilizer
(N20.51); fuel oil tank (N100.46); and others (N256.98). Thus the capital cost
of keeping a generator is N700 per kW.
For the industrial sector, existing measure of outage costs vary between $2.27
to $32.46/kWh of unserved electricity. Residential outage costs vary between
$0.05 and $24.61/kWh unserved.
Prof. A. S. Sambo
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Walk-through Energy Audits
Electricity Supply Situation
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Frequent power cuts and
voltage fluctuations;
Every industrial
establishment undertakes
extra investments in
generators;
Over 30% of total cost
of production is on
energy supply that is
wasted on inefficient
equipment;
Capital value of
generators is on the
average, 25% of the
total value of machinery
and equipment
Prof. A. S. Sambo
Proportion of Electric Power
Supply from Own Gen. Sets by
Firm Size, 2002
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Barriers to EE & C Promotion
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Lack of Detailed and Reliable Data;
Lack of Awareness on EE & C Benefits among Policymakers and
End-Users;
Lack of skilled manpower to identify and implement specific EC
measures;
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Lack of Adequate Institutional Framework;
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Inefficient Energy Pricing Policies;
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Lack of Capital to finance EC programs/projects;
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Low Manufacturing Capacity
Prof. A. S. Sambo
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Opportunities for Collaboration
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Industrial Energy Assessment Program
Trading on Energy-efficient products – CFLs, Energyefficient Motors, Improved steam boilers,
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ESCOs on EE & C – not existing
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Human capacity building on EE & C programs
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Energy Labeling – urgently required
Prof. A. S. Sambo
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Conclusion
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Inefficiency in energy use has brought a significant
negative impact on the cost competitiveness of the
manufacturing sector in Nigeria;
There is the urgent need for international support
to see to the take off of the NCEEC in Nigeria and
the subsequent entrenchment of the EE & C
practices.
Prof. A. S. Sambo
15
Thank You and God Bless!!
Prof. A. S. Sambo
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Industrial Energy Management Practices in Nigeria