The need for Joint optimization of Gas and Electricity Supply Systems in Nigeria

Introduction

This article examines the complexity of increasing interaction of gas and electricity systems in Nigeria. Nigeria with about 200 TSCF [1] of proven gas reserve is pursuing gas markets reforms that is expected to usher competition through private sector driven investments.

Gas and Electricity Systems

Gas and electricity systems are operated currently separately by different operators in Nigeria. The use of gas fired turbine generators in power generation links natural gas and electricity supply systems. The increased use of gas fired turbines in power generation is driven by economic and environmental reasons and has become the preferred source of energy especially power generation [1]. Combined Cycle Gas Turbines (CCGTs) are cost effective to build with higher efficiencies compared to other fossil fuel-based electricity generators. In Europe for example, CCGTs serving as spinning reserves have been utilized to balance intermittent power generation from wind turbines. The increasing interaction between gas and electricity systems have attracted interest from primary energy regulators like DPR and secondary energy regulators like the Nigerian Electricity Regulatory Commission (NERC). Therefore, there is a need to assess the impact of interaction of gas and electricity systems on the security of energy supply.

“The use of gas fired turbine generators in power generation
links natural gas and electricity supply systems.”

In an electric power system with a high penetration of CCGTs, the disruption of gas supply or the loss of a major gas network component (e.g. pipeline) may curtail the delivery of gas and consequently constrained power supply. Also, the regulatory prearrangement for gas supply to priority consumers during a major supply disruption may lead to a forced interruption of gas supply to CCGTs and hence additional bulk power outages (system collapse). Fluctuation of gas demand for power generation poses a major challenge of managing the gas network within acceptable gas facilities pressure limits. A coordinated approach of operating future gas and electricity networks is required to ensure optimal operation of both systems in a manner that assures infrastructure investment and guarantee revenue streams. Figure 1 in reference [2] shows a future interaction of gas and electricity networks. Nigeria does not currently have a fully functional gas distribution system, however, companies like Greenville and Transit Gas Nigeria Limited (TGNL) are on the verge of implementing a virtual pipeline technology to truck Liquefied Natural Gas (LNG) to stranded customers in the North. Greenville have recently been issued an interim LTO by DPR for its 40 MMSCFD Train 3 Rumuji Mini LNG Plant Project while TGNL have secured an LTE for its 20 MMSCFD Mini LNG plant in Ajaokuta.

Figure 1: Interaction of Gas and Electricity Supply Systems

Integrated Framework

Revenue flows from last mile customers on Electricity Distribution Networks determine the payment to Electricity Generating Companies (GENCOS) utilizing gas for CCGTs. This in turn affects the revenue streams to GENCOS Gas providers. The Electricity Distribution Networks in Nigeria are owned and operated by Distribution Companies (DISCOS). Reference [3] argues that DISCOS have continuously been unable to meet payment obligations for power supplied by GENCOS through the Nigerian Bulk Electricity Trading Plc (NBET) which in turn makes it impossible for GENCOS to pay gas suppliers. This is increasingly limiting further investment and expansion projects for grid connected gas to power projects [4].

Consequently, the above narrative shows that developing a sustainable gas to power infrastructure is a complex challenge. It requires solving a joint optimization problem to incorporate the constraints of the power system in the development of gas infrastructure for CCGTs. Optimization models have been utilized to solve complex problems in industrial systems, power systems and the oil and gas sectors. Integrated gas and electricity models have been utilized in references [2], [5]–[7] to solve complex joint optimization problems.

The Nigerian Gas Flare Commercialization Program (NGFCP) could be utilized with input from NERC to optimally determine flare points for power to gas projects while incorporating electrical network constraints (Transmission Company of Nigeria and DISCOS). This will provide insights for effectively deploying economically sustainable future gas to power infrastructure across the country.

Conclusion and Recommendation

With increasing demand for electricity in Nigeria, gas has also increasingly become the choice fuel in CCGTs due to its abundance (about 200 TSCF proven reserve in Nigeria) and environmentally friendliness when compared to other fossil fuels. This also means increasing interaction between gas and electricity supply systems. However, looking at both systems in isolation has not been in the best economic interest for investors in gas infrastructure for power systems. Hence the need to have an integrated framework that will ensure revenue streams are guaranteed for future expansion of gas to power infrastructure in Nigeria. Joint optimization models for gas and electricity have been deployed successfully for optimization of gas to power infrastructure.

Based on the above, the author is of the opinion that a joint unit should be formed between NGFCP and NERC to develop an effective model for future gas to power infrastructure (transmission network, distribution network) in Nigeria.

Disclaimer

All that is expressed in this post are the opinions of the author.

References

[1] T. Oyewunmi, “The evolving international gas market and energy security in Nigeria,” in Energy in Africa: Policy, Management and Sustainability, Cham: Springer International Publishing, 2018, pp. 117–145.

[2] C. He, X. Zhang, T. Liu, L. Wu, and M. Shahidehpour, “Coordination of Interdependent Electricity Grid and Natural Gas Network—a Review,” Current Sustainable/Renewable Energy Reports, vol. 5, no. 1, pp. 23–36, Mar. 2018.

[3] I. A. Yusuf, “GenCos, DisCos at war over mounting debts,” 2017. [Online]. Available: https://thenationonlineng.net/gencos-discos-war-mounting-debts/. [Accessed: 27- May-2019].

[4] D. Peng and R. Poudineh, “Gas-to-Power Supply Chains in Developing Countries: Comparative Case Studies of Nigeria and Bangladesh,” Energy Insight 6, pp. 1–19, 2017.

[5] C. Unsihuay, J. W. M. Lima, and A. C. Z. De Souza, “Modeling the integrated natural gas and electricity optimal power flow,” in 2007 IEEE Power Engineering Society General Meeting, PES, 2007, pp. 1–7.

[6] V. Krishnan et al., “Co-optimization of electricity transmission and generation resources for planning and policy analysis: review of concepts and modeling approaches,” Energy Systems, vol. 7, no. 2, pp. 297–332, May 2016.

[7] J. P. Deane, M. Ó Ciaráin, and B. P. Ó Gallachóir, “An integrated gas and electricity model of the EU energy system to examine supply interruptions,” Applied Energy, vol. 193, pp. 479–490, May 2017.