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Nigeria: Electricity tariff hike imminent as govt raises gas price

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The price of natural gas for power production businesses has been revised by the Nigerian government to $2.42 per metric million British thermal units (MMBtu) as of Monday. This is an increase from the previous rate of $2.18mmbtu.

More than 70% of Nigeria’s electricity is produced by gas-fired thermal power facilities. As a result, when the Nigerian Electricity Regulatory Commission conducts another tariff review, the increased cost of the item can increase the rate that power users must pay.

The previous price of natural gas was used to determine the Multi-Year Tariff Order, which NERC announced in January 2024 for the power distribution firms.

Since gas is a major component utilized in the production of power, there is a high tendency for an upward revision of power tariffs based on the most recent cost of the commodity.

Gas producers have consistently demanded an increase in the product’s price, citing both domestic and foreign oil and gas businesses, emphasizing that doing so would encourage them to increase production.

Ahmed stated in the announcement on Monday that a clear legislative framework for determining a market-based pricing regime for the domestic gas market was established by the Petroleum Industry Act 2021, which was gazetted in August 2021 and approved by the President on August 16, 2021.

The head of NMDPRA went on to say that the most recent action was done under section 167, the third and fourth schedules of the PIA 2021, which required the regulator to ascertain the marketable wholesale price of natural gas delivered to the strategic sectors as well as the Domestic Base Price.

He said, “The DBP at the marketable gas delivery point under Sector 167(1) and other provisions of the PIA shall be determined based on regulations which incorporate among such other matters, the following principles.

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Uganda discusses power line to South Sudan with China’s Sinohydro

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According to the president’s office, Uganda is in negotiations with Sinohydro Corporation Limited of China to build a $180 million power transmission line that would enable Uganda to export electricity to South Sudan, which is severely short on energy.

Ugandan President Yoweri Museveni received a group led by Vice President of Sinohydro Corporation Yang Yi Xin on Monday as part of the negotiations, according to a late-morning statement from Museveni’s office.

The project, according to the statement, will entail building a new substation and expanding two existing ones in addition to building a 138-kilometre high-voltage transmission line to provide power to South Sudan.

“We are very much willing to help develop this project with the required finance if needed,” Xin was quoted as telling the president.

The statement stated that Museveni endorsed Sinohydro’s proposal to carry out the project. Uganda and South Sudan inked a power sales deal in June of last year, enabling Uganda to sell electricity to South Sudan.

To enable Uganda to export electricity to South Sudan, the two nations inked a power sales deal in June of last year. The Chinese firm is completing a $1.5 billion, 600-megawatt hydropower project on the River Nile in Northern Uganda that is meant to be the source for electricity exports to South Sudan.

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Uganda considers nuclear energy to meet increased electricity demand

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Uganda’s Ministry of Energy and Mineral Development announced on Tuesday that it was collaborating with the International Atomic Energy Agency (IAEA) to develop nuclear energy in the country as power demand rises.

Irene Batebe, permanent secretary of the ministry, stated that the government, with the assistance of the IAEA, is investigating and evaluating uranium deposits to ensure a sustainable supply of nuclear fuel for the projected nuclear power plants and research reactors.

“Uranium is the most widely used nuclear fuel material in nuclear power plants and research reactors and is required for Uganda’s nuclear power program.

“The planned nuclear power capacity will require about 4,000 tons of Uranium annually when fully operational. Thus, there is a need for sustainable sources of uranium,” she said at the opening of the nine-day meeting with the experts from the IAEA.

Batebe stated that the government is modifying the Atomic Energy Act of 2008 to tighten the legal framework for the exploration, mining, and processing of nuclear fuel reserves. She stated that even if completely exploited, the country’s electricity generation capacity from hydro, biomass, geothermal, and peat will fall short of Uganda Vision 2040 ambitions.

“To meet our development targets, nuclear energy among other sources must be integrated in the electricity generation mix,” she said.

The Cabinet approved the Energy Policy for Uganda, 2023 in April 2023, which envisions the long-term development of 52,481 MW of generation capacity to meet future demand, with nuclear power accounting for 24,000 MW.

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