The Nigerian Government’s policy towards coal has changed and evolved from the time of its discovery in colonial times to date. This article looks back at recent policy changes by government in harnessing the full potential of coal for Nigeria.
Colonial Policy
The British colonial government started to exploit coal in 1914, mainly for export to Britain, and then to provide fuel for train locomotives and coal-fired plants. However, with the discovery of crude, both the Nigerian Railway Corporation and the Electricity Corporation of Nigeria switched to diesel, causing the abandonment of coal mining.
National Energy Policy (2003)
The National Energy Policy proposes extensive exploration and production of coal, increasing private sector participation and utilizing coal reserves in an environmentally acceptable manner. It also defines strategies to achieve these aims, including offering investors incentives for the establishment of coal-based industries and the production of coal stoves at affordable prices, developing adequate infrastructure for the handling and transportation of coal within and outside the country
Vision 2020:20 (2009)
The Vision 20:2020 which is the development plan of the Federal Government to grow Nigeria’s economy to be the 20th largest in the world by Year 2020 and was approved in 2009 does not define any policy or development plan for coal mining or coal power generation. However, the document makes reference to the need to revive coal mining and to exploit coal for power with reference to South Africa which generates 96% of its power from coal.
Roadmap for Power Sector Reform (2013)
The Roadmap drawn by the Presidential Task Force on Power projected that 1,000MW of power will be generated from coal by 2020 which will account for 3% of the Nigerian generating capacity of 30,000MW. It also recommended feed-in tariffs to encourage investment in coal power.
Draft National Energy Master Plan (2014)
The Energy Commission of Nigeria released a draft National Energy Master Plan (NEMP) in 2014 which will ensure a guided implementation of the National Energy Policy (NEP). The Master Plan makes reference to a study conducted by a Presidential Advisory Committee on 25-Year Development Plan for Power, which projects electricity demand by 2030 to be 192,000MW and recommends that coal contribute 11% of the power (21,120MW). In order to achieve this, the NEMP recommends, among other things, an intensification of coal exploration and production, provision of incentives to coal investors, and the promotion of the use of smokeless cola briquettes as alternatives to fuel wood. The NEMP also proposes an action plan for the development of coal and assigns responsibility to various government agencies for implementation of each action step.
In August 2014, however, the government announced that 30% of Nigeria’s electricity would be generated from coal.
Ministerial Polices (2015)
The Minister for Power, Works and Housing, Mr. Babatunde Fashola declared government’s intention to revive the Oji River Thermal Station. His counterpart in the Ministry of Solid Minerals, Kayode Fayemi has indicated his willingness to invoke the “use it or lose it” doctrine enshrined in the Nigeria Minerals and Mining Act 2007 to ensure those given mining licenses use it or risk losing it. Minister Fayemi is also quoted as saying that in the year 2020, Nigeria would generate 1,000 MW from coal. However, in 2016 licences worth more than 1,000MW had been issued already.