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Assessment of Energy Losses and Cost Implications in the Nigerian Distribution Network

Hachimenum N. Amadi*, Ephraim N.C. Okafor, Fabian I. Izuegbunam

Department of Electrical & Electronic Engineering, Federal University of Technology, Owerri, Nigeria

Abstract: Energy shortages is the major challenge facing the industrial sector in Nigeria. This paper assessed the energy shortages due to technical losses in the Nigerian distribution network and the cost implications. The study was carried out based on network data collected over the period 2011-2015 from three electricity distribution companies (DisCos) drawn from the three major industrial cities of Nigeria. These data were simulated on the Electrical Transient Analysis program (ETAP) Version 12.6. The calculated energy losses for these cities for the said period are 108,959.87 MWH, 149,256 MWH and 72,743.08 MWH respectively. The corresponding revenue losses are 2,434,164,012, 3,538,754,758.8 and 1,699,751,530.1 respectively. The paper suggested remedial measures to reduce energy losses, mitigate losses arising from unannounced electricity cuts as well as achieve a more efficient and reliable electricity distribution network. The outcome of this research provides a data bank for policy makers and future researchers in the areas of electricity generation, transmission and distribution.

Keywords: electricity failures, energy loss implication, energy shortages, Nigeria firms, power outages

Citation: Hachimenum N. Amadi, Ephraim N.C. Okafor, Fabian I. Izuegbunam, Assessment of Energy Losses and Cost Implications in the Nigerian Distribution Network. American Journal of Electrical and Electronic Engineering, 4 (5). 123-130. January 2016. doi:10.12691/ajeee-4-5-1

1. Introduction

Energy is fundamental for socio-economic and industrial development. Energy stimulates productive activities in all sectors of a nation’s economy including industry, commerce, agriculture and mining. Energy shortages have severe negative impact on both industrial and commercial growth. Ref. [1] investigated the relationship between energy consumption and the Nigerian economy from the period of 1970 to 2005 and found that energy consumption positively correlated with economic growth. Similarly, ref. [2] studied energy consumption and economic performance in Nigeria and found that the volume of energy consumption is a strong determinant of the nation’s economic growth. Ref. [3] studied the relationship between energy consumption and economic growth for 11 countries in sub-Saharan Africa and found that energy consumption co-integrated with economic growth in Cameroon, Cote d’Ivoire, Gambia, Ghana, Senegal, Sudan and Zimbabwe thus proving that energy consumption has a significant positive long-run relationship on economic growth of those countries. Similarly, ref. [4] examined the impact of energy consumption on economic growth in Nigeria over the period 1980-2010 and found a long-run relationship between economic growth and energy consumption.

In their own work, ref. [5] employed a multiple regression model to ascertain the effect of electricity supply on economic development as well as the possible effect of electricity supply on industrial development in Nigeria during the period 1970-2010. Their findings show that electricity, gross fixed capital formation, industrial production variables and population positively correlated with the gross domestic product per capita in the country. In other words, energy shortages result in low economic activities. Figure 1 is a graphical representation of the effect of power outages on the Gross Domestic Product (GDP) of selected countries in Africa. As can be seen from the figure, the higher the economic cost of power outages in a nation, the higher the percentage of the nation’s GDP that gets eroded.

Figure 1. Economic Costs of Power Outages in selected African countries [7]

Energy shortages result from technical (load and no-load losses, line losses etc.) and non-technical losses (losses due to vandalism, illegal connections to transmission/distribution lines or energy theft, meter tampering etc.). In 2014 alone, about 12% of energy losses in the Nigeria distribution network was due to technical losses [6]. The established correlation between electricity supply and Gross Domestic Product makes it necessary, therefore, to ascertain energy losses due to technical losses and the cost implications in the Nigerian distribution network in view of perennial shortages in electricity supply to the nation’s industrial sector.

The estimation of the quantity and cost of energy losses in the distribution systems due to vandalism and illegal connections to distribution lines, though these too are important factors of electricity losses is beyond the scope of this study.

Electricity Distribution companies (DisCos) in Nigeria are all privatized and are responsible for the expansion of the distribution network’s MV and LV grid. The companies are generally owned by consortia among which are larger state governments. The 11 distribution companies were scheduled to handle over 5,000 MW and cover the areas: Abuja, Benin, Eko, Enugu, Ibadan, Ikeja, Jos, Kaduna, Kano, Port Harcourt and Yola. At the time of handing over to these core investor companies the concept of Aggregate Technical, Commercial and Collection (ATC&C) loss reduction was employed in the bidding process. What this means is that the investor that proposed the highest ATC&C loss reduction (in absolute percentage terms) over a five-year period was deemed to have won the bid. This concept was preferred over other sale evaluation methods in order to commit the distribution companies to pursuing loss reduction as a fundamental issue and a priority. Two years down the privatization line, however, these companies are faced with myriad operational challenges including lack of investment funds. Thanks to the Central Bank of Nigeria (CBN) which provided a 10-year intervention to the power sector to ensure provision of low cost, long-term debt financing to the DisCos. Recently, Kano DisCo acquired 62,000 energy meters courtesy of the CBN facility [8]. Some DisCos have opted to raise long term debt by way of debt securities issuance and listing and quotations of such securities on the market while a handful of other Discos are considering the adoption of off-balance sheet funding solutions to finance capital items such as metering, network expansion and embedded generation. To complement the distribution companies’ effort towards energy efficiency improvement, the Federal Government in April 2015 adopted the Nigeria’s National Renewable Energy and Energy Efficiency Policy which provides incentives for selling, manufacturing and importing energy-efficient products, while also promoting policies for renewable energy sources [9].

2. Methodology

Data and information on the sampled distribution networks were collected from three electricity distribution companies located in the three major Nigerian cities under review. The distribution companies are Eko Electricity Distribution Company (EKEDP) in Lagos city for data and diagram on the Agbara/Badagry distribution network, Kano Electricity Distribution Company (KEDCO) in Kano city for data and diagram on the Sabon Gari distribution network and the Port Harcourt Electricity Distribution Company (PHEDCO) in Port Harcourt city for data and diagram on the Port Harcourt distribution network. Data and information collected from each of the sampled distribution companies include: (i) Single line diagram of each injection substation and its associated feeders (See Figure 2 annexed). (ii) Monthly maximum loading on the feeders for the period 2011- 2015 (iii) Feeder route length (iv) Size of conductor used for feeders (v) Daily outages on each feeder for the period 2011-2015. These data were simulated on the Electrical Transient and Analysis Program (ETAP) version 12.6 software and the simulation results used in the computation of energy losses and the corresponding revenue losses in the respective distribution networks. The research findings are presented using appropriate statistical tables and charts.

Figure 2. ETAP Single line representation of SabonGari distribution network

According to ref. [10], energy is the total amount of work done and power is how fast the work is done. In other words, power is energy per unit of time. Power is watts. Energy is watt-hours.

Given a typical network, therefore, the relationship between the energy input and the energy lost in the network respectively can be expressed as:

[picture] | (1)

[picture] | (2)

Where: is the energy in Joules (J) delivered in the network, is the time in Seconds (S) taken for energy transfer and is the energy lost in Joules (J) in the network.

Let represent the electricity tariff or cost in Naira () per unit of electrical energy lost, in Kilowatt-Hour (KWH), we can then express the total revenue lost, as follows:

[picture] | (3)

Table 1 - Table 3 show the calculated yearly energy losses and the losses in revenue due to energy losses in Beecham and Evans industrial feeders in Agbara/Badagry injection substations, Independence and Bompai industrial feeders in Sabon Gari/Dakata injection substations and Glass factory and Old Aba Road industrial feeders in Akanni/Trans-Amadi injection substations respectively for 2011-2015.

Table 1. Calculated Yearly Energy Losses and Losses in Revenue due to Energy Losses in Beecham and Evans Industrial Feeders in Agbara/Badagry Injection Substations for 2011-2015

Table 2. Calculated Yearly Energy Losses and Losses in Revenue due to Energy Losses in Independence and Bompai Industrial Feeders in Sabon Gari/Dakata Injection Substations for 2011-2015

Table 3. Calculated Yearly Energy Losses and Losses in Revenue due to Energy Losses in Glass factory and Old Aba Road Industrial Feeders in Akanni/Trans-Amadi Injection Substations for 2011-2015

3. Results and Discussion

3.1. Energy Losses in the Distribution Network

Table 4 – Table 6 show the maximum energy losses in the respective sampled distribution network substations. During the period 2011-2015, the Agbara/Badagry substation in the Eko distribution network in Lagos showed a maximum energy loss of 108,959.87 MWH (Table 4).

Table 4. Maximum Energy Loss in Agbara/Badagry for 2011-2015

Table 5. Maximum Energy Loss in Sabon Gari/Dakata for 2011-2015

Table 6. Maximum Energy Loss in Akanni/Trans-Amadi for 2011-2015

Figure 3. Average Energy Losses in Agbara/Badagry for 2011-2015

Figure 4. Average Energy Losses in Sabon Gari/Dakata for 2011-2015

Figure 5. Average Energy Losses in Akanni/Trans-Amadi

It was observed also that the highest maximum energy loss during the period was reported on the Gezewa feeder in the Sabon Gari/Dakata injection substation in Kano distribution network. This high value of energy loss (21,684.5 MWH) reported on Gezawa feeder is attributable to the power losses on the feeder during the five (5) year period covered by the study. It is obvious from Tables 4 – 9 that the energy losses in each of the distribution networks increased yearly. This is attributable to yearly increases in power losses resulting from overloaded transformers, distribution lines and other system components [10,11]. Figure 3 – Figure 5 show the average energy losses in each of the distribution networks.

Recent researches [10,11,12] have shown that high power losses contribute to high energy losses in distribution networks. It is important therefore that utilities minimize power losses in the system in order to reduce the resultant energy losses. Other factors that contribute to increased energy losses in distribution systems are vandalism, illegal connection to transmission/distribution lines, poor workmanship, use of wrong sizes of conductors etc.

3.2. Loss of Revenue in the Distribution Networks

Table 7 - Table 9 show the maximum revenue losses in the industrial substations of the sampled distribution networks. During the five year period (2011-2015) covered by the study, the Agbara/Badagry substation in the Eko distribution network in Lagos showed a maximum revenue loss of 2,434,164,012 (Table 7). The Sabon Gari/Dakata substation in Kano distribution network showed a maximum revenue loss of 3,538,754,759 (Table 8) while the Akanni/Trans-Amadi substation reported maximum revenue loss of 1,699,751,530 (Table 9). It is obvious from the Tables that the revenue losses in each of the distribution networks increased yearly. This is due to yearly increases in energy losses as reported by each of the distribution companies investigated.

Table 7. Maximum Loss of Revenue in Agbara/Badagry per year

Table 8. Maximum Loss of Revenue in Sabon Gari/Dakata per year

Table 9. Maximum Revenue Loss in Akanni/Trans-Amadi per year

The Gezewa feeder in the Sabon Gari/Dakata injection substations in the Kano distribution network showed the highest energy loss (21,684.5 MWH) during the study period and so incurred the highest revenue loss of 511,597,951.9 when compared to the feeders in the Eko and Port Harcourt distribution networks that recorded lower energy loss values. Figure 6 – Figure 8 show the average revenue losses in each of the distribution networks.

Figure 6. Average Revenue Loss in Agbara/Badagry for 2011-2015

Figure 7. Average revenue loss in Sabon Gari/Dakata for 2011-2015

Figure 8. Average Loss of Revenue in Akanni/Trans-Amadi for 2011-2015

Table 10 shows the summary of the energy and revenue losses in the three distribution networks surveyed. These findings confirmed claims by earlier studies [10,13,14,15,16,17] that energy shortages result in loss of revenue and depletion of funds available to the distribution companies to invest in and render more satisfactory services to electricity consumers [18,19,20].

Table 10. Summary of Energy and Revenue Losses in the Lagos, Kano and Port Harcourt Distribution Networks

4. Conclusion

The calculated energy loss for the period 2011-2015 yielded 108,959.87 MWH for the Eko distribution network. This is while the Kano distribution network and the Port Harcourt distribution network reported 149,256 MWH and 72,743.08 MWH respectively. The calculated revenue loss for the same period showed 2,434,164,012 for the Eko distribution network, 3,538,754,758.8 for the Kano distribution network and 1,699,751,530.1 for the Port Harcourt distribution network. In other words, a total of 7,672,670,300.91 (Seven Billion, Six Hundred Seventy-two Million, Six Hundred Seventy Thousand, Three Hundred Naira, Ninety Kobo) only was lost as a result of a total energy loss of 330,958.95 MWH in the three distribution networks during the period covered by the research.

The paper recommends government legislation against vandalism and energy theft such that suspected vandals are prosecuted and convicts made to suffer stiff penalties. Such legislation should in addition compel Utilities make pre-paid meters available to every electricity consumers in order to checkmate power wastages and exploitation of unsuspecting customers by dubious staff of distribution companies (DisCos). The paper further recommends an immediate and comprehensive power generation planning programme that would determine the country’s maximum load demand when the suppressed loads are added to the national grid. Government should emulate Ghana and Niger Republic and legislate an energy conservation and efficiency policy that would encourage consumers to use electricity gadgets and devices that do not consume much current. There should be intensive enlightenment programmes to educate the public and especially electricity users on how to use the energy economically and efficiently and on the need to safeguard electrical installations and equipment in their domains from being vandalised. The study findings would find application amongst energy policy makers and stakeholders in the energy industry.

Acknowledgements

The researchers are grateful to the Management and Staff of the various distribution companies (DisCos) that aided the successful completion of this study by providing data and information that facilitated the assessment of the impact of outages on their respective distribution networks.

Competing Interests

The authors declare that no conflicting interests exist.

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