Axxela: From Dependency to Autonomy

According to the International Energy Agency (IEA), over 600 million Africans, representing 43% of the continent’s population lack of access to reliable and affordable energy. In Nigeria, the 4,400 megawatts of electricity distributed at peak capacity is grossly insufficient for its over 200 million population. Consequently, industries are constrained to adopt alternative energy supply solutions to stay productive and effectively meet their revenue targets. This includes integrating diesel or low-pour-fuel oil (LPFO) fueled power generation with grid energy supply to maintain manufacturing processes. In some cases, businesses have been compelled to completely jettison the intermittent grid supply due to the nature of their manufacturing processes, with high costs resulting from wastage when power supply is cut off in the middle of production. This further buttress a recent IEA report which states that “the country has grappled with recurrent power failures, totaling 46 grid collapses between 2017 and 2023”. This reality has pushed diesel or petrol-fueled energy production to reach 40% within this energy mix, hence driving up production costs.

It is therefore very clear that this solution is not sustainable and comes with its own set of economic implications, amongst other challenges.

The question of whether industries can achieve cost affordability and reliable energy supply in tandem with best practice environmental requirements persists.

This is where industries seek energy autonomy to address and control their energy supply needs within the realm of affordability while maintaining the goal of environmental stewardship. The switch to alternative gas-powered solutions including captive and embedded power plants remains a plausible option. This not only ensures a steady, affordable energy supply but also promotes sustainability by reducing dependence on fossil fuels and minimising carbon footprints. These integrative solutions empower industries to be more resilient and enhance their long-term operational efficiency.

Indeed, energy autonomy allows businesses to take control of their energy needs, reducing vulnerability to external factors and assuring uninterrupted operations. Natural gas plays an advantageous role here, it is an abundant, affordable, and cleaner-burning fuel than coal or oil, making it a preferred choice for industries and power generation. With a proven natural gas reserve of 209 Trillion Cubic Feet (tcf), Nigeria holds the largest natural gas reserves on the African continent and has seen significant export growth over the past two decades, exporting approximately 32.2 billion standard cubic meters (scm) in 2022. This national endowment ensures fuel availability prompting the Nigerian government to advocate for a gas-based economy through strategic investments and partnerships, and policy reforms. By prioritising natural gas infrastructure development, expanding domestic gas consumption, and fostering a conducive investment climate, Nigeria is on its way to becoming a global gas powerhouse and a model of energy resilience in Africa. On the other side, industrial and commercial organisations enjoy a two-pronged benefit when they switch; affordability and emission savings owing to its cleaner nature.

Though the unreliability of grid power and the vast chasm between supply and demand have placed an onerous burden on manufacturing companies and other industries alike, Axxela has spearheaded several trailblazing efforts in power development empowering industries to embrace natural gas and customise their power solutions to achieve energy autonomy.

Akute IPP located in Akute, Ogun State, Nigeria, with a capacity of 12.15MW comprising four units of 3.0375MW JMS 620 GS-NL gas-fueled engines is one of such. It was developed and operated by Axxela prior to its divestment. The IPP provides a 24-hour power supply to the Lagos Water Corporation intake at Akute and the Water Works in Adiyan and Iju Lagos.

Alausa IPP located in Ikeja, Lagos State, Nigeria was developed to provide power to the Lagos State Government Secretariat Complex in Alausa. ALPL consists of two (2) units of 3.3 MW gas-fueled engines and two (2) units of 2.0MW series 4000 MTU diesel engines. The distribution network comprises 23 units of 11KV distribution substations in and around Alausa, all connected to a major receiving station. It has now been divested by Axxela.

Most recently is the development of a 5.8MW IPP delivering reliable power supply to Cadbury Nigeria PLC. The IPP which comprises of one unit each of 4.3MW and 1.5MW MTU gas engines provides a 24-hour power supply to Cadbury to power its factories and administrative facilities. The project was financed by and is owned by Axxela. All the three plants are supplied with Natural Gas via a pipeline network by Gaslink Nigeria Limited, a subsidiary of Axxela.

Whilst the journey to energy self-sufficiency is not without challenges, the rewards are immense. Industries that are embracing autonomy contribute to a more resilient and sustainable energy ecosystem. Axxela’s innovative solutions to self-generation and collaboration with customers can pave the way for a future where energy self-sufficiency can become the reality not just a goal, driving economic growth and prosperity for Nigeria’s industrialisation.

Axxela recently took Final Investment Decision (FID) for the development of a gas processing plant situated in OML 56, Delta State, South-South Nigeria. The Plant will be developed in phases with a total capacity of 50mmscf/d. The project is strategically cited in OML 56 to serve as a potential hub that upstream players with fields within a 30km radius can partner with to process associated and non-associated gas. Upon completion, processed gas from the facility will be readily available for utilisation across various market segments including Compressed Natural Gas (CNG) for vehicles, feedstock for industries, decentralised power solutions among others.

Source: Axxela