IDEAS home Printed from https://ideas.repec.org/a/eee/rensus/v52y2015icp35-40.html
   My bibliography  Save this article

Unit cost of electricity in Nigeria: A cost model for captive diesel powered generating system

Author

Listed:
  • Oladokun, V.O.
  • Asemota, O.C.

Abstract

A credible and acceptable pricing template for electricity tariff has been identified as critical to the survival of the deregulated Nigerian power sector. Excess off grid electricity from diesel powered captive systems constitutes a substantial source of electricity for many power distribution companies. This work develops a costing model for determining the unit cost of electricity from diesel generators as a basis for appropriate pricing. Relevant variables and parameters of power system were identified and characterized. A Life Cycle Cost based unit cost mathematical model was developed and coded using electronic spreadsheet for ease of application. Data from users of diesel generators and the literature were used for model validation. At the prevailing diesel pump price of $3.7 per gallon the unit cost of electricity varies between $0.28/kWh and $0.33/kWh depending on the generator capacity. While with compressed natural gas (CNG) fueling, the unit cost, at the prevailing $2 per Diesel Gallon Equivalent (DGE), varies between $0.14/kWh and $0.16/kWh. The study concluded that Nigeria needs to invest on the expansion of her natural gas distribution infrastructures to take advantage of the nation׳s abundant natural gas resources for captive power generation.

Suggested Citation

  • Oladokun, V.O. & Asemota, O.C., 2015. "Unit cost of electricity in Nigeria: A cost model for captive diesel powered generating system," Renewable and Sustainable Energy Reviews, Elsevier, vol. 52(C), pages 35-40.
    • Handle: RePEc:eee:rensus:v:52:y:2015:i:c:p:35-40
    DOI: 10.1016/j.rser.2015.07.028
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1364032115006759
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.rser.2015.07.028?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Ikeme, J. & Ebohon, Obas John, 2005. "Nigeria's electric power sector reform: what should form the key objectives?," Energy Policy, Elsevier, vol. 33(9), pages 1213-1221, June.
    2. Rehman, Shafiqur & Al-Hadhrami, Luai M., 2010. "Study of a solar PV–diesel–battery hybrid power system for a remotely located population near Rafha, Saudi Arabia," Energy, Elsevier, vol. 35(12), pages 4986-4995.
    3. Oseni, Musiliu O., 2011. "An analysis of the power sector performance in Nigeria," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(9), pages 4765-4774.
    4. Roth, Ian F. & Ambs, Lawrence L., 2004. "Incorporating externalities into a full cost approach to electric power generation life-cycle costing," Energy, Elsevier, vol. 29(12), pages 2125-2144.
    5. Adenikinju, Adeola F., 2003. "Electric infrastructure failures in Nigeria: a survey-based analysis of the costs and adjustment responses," Energy Policy, Elsevier, vol. 31(14), pages 1519-1530, November.
    6. Ueckerdt, Falko & Hirth, Lion & Luderer, Gunnar & Edenhofer, Ottmar, 2013. "System LCOE: What are the costs of variable renewables?," Energy, Elsevier, vol. 63(C), pages 61-75.
    7. Mahmoud, Marwan M. & Ibrik, Imad H., 2006. "Techno-economic feasibility of energy supply of remote villages in Palestine by PV-systems, diesel generators and electric grid," Renewable and Sustainable Energy Reviews, Elsevier, vol. 10(2), pages 128-138, April.
    8. Oparaku, O.U., 2003. "Rural area power supply in Nigeria: A cost comparison of the photovoltaic, diesel/gasoline generator and grid utility options," Renewable Energy, Elsevier, vol. 28(13), pages 2089-2098.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Karimi, Hamid & Jadid, Shahram, 2020. "Optimal energy management for multi-microgrid considering demand response programs: A stochastic multi-objective framework," Energy, Elsevier, vol. 195(C).
    2. Adesanya, Adewale A. & Pearce, Joshua M., 2019. "Economic viability of captive off-grid solar photovoltaic and diesel hybrid energy systems for the Nigerian private sector," Renewable and Sustainable Energy Reviews, Elsevier, vol. 114(C), pages 1-1.
    3. Nafisi, Amin & Arababadi, Reza & Moazami, Amin & Mahapatra, Krushna, 2022. "Economic and emission analysis of running emergency generators in the presence of demand response programs," Energy, Elsevier, vol. 255(C).
    4. Dorji Yangka & Peter Newman, 2018. "Bhutan: Can the 1.5 °C Agenda Be Integrated with Growth in Wealth and Happiness?," Urban Planning, Cogitatio Press, vol. 3(2), pages 94-112.
    5. Heinemann, G. & Banzer, F. & Dumitrescu, R. & Hirschhausen, C.v. & Neuhoff, M.E. & Ogechi Nwadiaru, V., 2022. "Transforming electricity access by replacing back-up generators with solar systems: Recent trends and evidence from Nigeria," Renewable and Sustainable Energy Reviews, Elsevier, vol. 157(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Giwa, Adewale & Alabi, Adetunji & Yusuf, Ahmed & Olukan, Tuza, 2017. "A comprehensive review on biomass and solar energy for sustainable energy generation in Nigeria," Renewable and Sustainable Energy Reviews, Elsevier, vol. 69(C), pages 620-641.
    2. Mandelli, Stefano & Barbieri, Jacopo & Mereu, Riccardo & Colombo, Emanuela, 2016. "Off-grid systems for rural electrification in developing countries: Definitions, classification and a comprehensive literature review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 58(C), pages 1621-1646.
    3. Hong, Sanghyun & Bradshaw, Corey J.A. & Brook, Barry W., 2014. "South Korean energy scenarios show how nuclear power can reduce future energy and environmental costs," Energy Policy, Elsevier, vol. 74(C), pages 569-578.
    4. Salmon, Claire & Tanguy, Jeremy, 2016. "Rural Electrification and Household Labor Supply: Evidence from Nigeria," World Development, Elsevier, vol. 82(C), pages 48-68.
    5. Ugwoke, B. & Gershon, O. & Becchio, C. & Corgnati, S.P. & Leone, P., 2020. "A review of Nigerian energy access studies: The story told so far," Renewable and Sustainable Energy Reviews, Elsevier, vol. 120(C).
    6. Mohammed, Ammar & Pasupuleti, Jagadeesh & Khatib, Tamer & Elmenreich, Wilfried, 2015. "A review of process and operational system control of hybrid photovoltaic/diesel generator systems," Renewable and Sustainable Energy Reviews, Elsevier, vol. 44(C), pages 436-446.
    7. Stocker Klaus, 2020. "Financial and Economic Assessment of Tidal Stream Energy—A Case Study," IJFS, MDPI, vol. 8(3), pages 1-20, August.
    8. Kaundinya, Deepak Paramashivan & Balachandra, P. & Ravindranath, N.H., 2009. "Grid-connected versus stand-alone energy systems for decentralized power--A review of literature," Renewable and Sustainable Energy Reviews, Elsevier, vol. 13(8), pages 2041-2050, October.
    9. Oseni, Musiliu O. & Pollitt, Michael G., 2015. "A firm-level analysis of outage loss differentials and self-generation: Evidence from African business enterprises," Energy Economics, Elsevier, vol. 52(PB), pages 277-286.
    10. Tazi, Nacef & Safaei, Fatemeh & Hnaien, Faicel, 2022. "Assessment of the levelized cost of energy using a stochastic model," Energy, Elsevier, vol. 238(PB).
    11. Banerjee, Avishek & Tierney, Michael. J. & Thorpe, Roger. N., 2012. "Thermoeconomics, cost benefit analysis, and a novel way of dealing with revenue generating dissipative units applied to candidate decentralised energy systems for Indian rural villages," Energy, Elsevier, vol. 43(1), pages 477-488.
    12. Olatomiwa, Lanre & Mekhilef, Saad & Huda, A.S.N. & Ohunakin, Olayinka S., 2015. "Economic evaluation of hybrid energy systems for rural electrification in six geo-political zones of Nigeria," Renewable Energy, Elsevier, vol. 83(C), pages 435-446.
    13. Pérez Odeh, Rodrigo & Watts, David & Flores, Yarela, 2018. "Planning in a changing environment: Applications of portfolio optimisation to deal with risk in the electricity sector," Renewable and Sustainable Energy Reviews, Elsevier, vol. 82(P3), pages 3808-3823.
    14. Mohammed, Y.S. & Mustafa, M.W. & Bashir, N. & Ibrahem, I.S., 2017. "Existing and recommended renewable and sustainable energy development in Nigeria based on autonomous energy and microgrid technologies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 75(C), pages 820-838.
    15. Aliyu, Abubakar Sadiq & Ramli, Ahmad Termizi & Saleh, Muneer Aziz, 2013. "Nigeria electricity crisis: Power generation capacity expansion and environmental ramifications," Energy, Elsevier, vol. 61(C), pages 354-367.
    16. Trotter, Philipp A. & McManus, Marcelle C. & Maconachie, Roy, 2017. "Electricity planning and implementation in sub-Saharan Africa: A systematic review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 74(C), pages 1189-1209.
    17. Khalid Almutairi & Seyyed Shahabaddin Hosseini Dehshiri & Seyyed Jalaladdin Hosseini Dehshiri & Ali Mostafaeipour & Alibek Issakhov & Kuaanan Techato, 2021. "Use of a Hybrid Wind—Solar—Diesel—Battery Energy System to Power Buildings in Remote Areas: A Case Study," Sustainability, MDPI, vol. 13(16), pages 1-26, August.
    18. Akinyele, Daniel O. & Rayudu, Ramesh K., 2016. "Techno-economic and life cycle environmental performance analyses of a solar photovoltaic microgrid system for developing countries," Energy, Elsevier, vol. 109(C), pages 160-179.
    19. Dada, Joseph O., 2014. "Towards understanding the benefits and challenges of Smart/Micro-Grid for electricity supply system in Nigeria," Renewable and Sustainable Energy Reviews, Elsevier, vol. 38(C), pages 1003-1014.
    20. Okoye, Chiemeka Onyeka & Solyalı, Oğuz, 2017. "Optimal sizing of stand-alone photovoltaic systems in residential buildings," Energy, Elsevier, vol. 126(C), pages 573-584.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:rensus:v:52:y:2015:i:c:p:35-40. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/600126/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.