J. Basic. Appl. Sci. Res., 3(2)381-385, 2013 © 2013, TextRoad Publication ISSN 2090-4304 Journal of Basic and Applied Scientific Research www.textroad.com *Corresponding Author: Ainah Priye Kenneth, Department of Electrical and Electronic Engineering Niger Delta University Wilberforce Island, P.M.B 071 Yenagoa, Bayelsa State priyeainah@yahoo.com The Benefit of Distribution Generation to the Nigerian Electric Utility System Ainah Priye Kenneth and Afa Tarilanyo John Department of Electrical and Electronic Engineering Niger Delta University Wilberforce Island ABSTRACT The problem of quality power, challenges of generation, transmission and distribution of electrical energy to its end users has resulted in incessant black out in Nigeria. This challenges and problems have driven the electricity industry into a reformation process to solve this menace by privatizing the industry which has led to the introduction of the independent power producers scheme (IPPs). In this paper a solution of integrating IPP into the grid in the form of distribution generation (DG) was analyzed to curb the challenges and problems facing the industry in Nigeria. It looked at the potential benefits of distribution generation (DG) that is, the application of renewable (photovoltaic and solar thermal) and sustainable energy (gas fired micro-turbine) of few KW to 50MW into the distribution network of the Nigerian grid to solve the problem and challenges of the industry. KEYWORDS: Distribution generation (DG), independent power producer (IPP), renewable energy, distribution network. 1.0 INTRODUCTION Nigeria is situated at the heart of Africa with a population of over 150 million people. It is a vast country with a total of 356, 667 sq miles (923,768 sq km), of which 351,649 sq Miles (910,771 sq km or 98.6% of total area) is land and it is divided into 36 states and the federal capital territory (FCT) [1]. The insurgence of electricity supply in Nigeria started way back in 1896 and a subsequent establishment of Electricity Cooperation of Nigeria (ECN) in 1951 and Niger Dam Authority (NDA) in 1962, this pave the way for the advancement of electricity supply in Nigeria. In 1972 the Niger Dam Authority (NDA) and Electricity Cooperation of Nigeria (ECN) were merged to form the deformed Nigerian Electric Power Authority (NEPA), now Power Holding Company of Nigeria (PHCN) which was established to control, coordinate and effectively manage the electricity generation and supply. The establishment of NEPA to form a centralized control did not helped in addressing the growing energy demand but rather resulted in incessant blackout in the country. The over centralization of the Nigerian electricity industry made it practically impossible for electricity supply to keep pace with the growth in population and economic activities. Today, Nigeria has the biggest gap in the world between electricity demand and supply, providing it population of 150 million with roughly 3,800 megawatts of electricity. In contrast, South Africa generates more than 40,000 megawatts for a population of 47 million people, while Brazil generates 100,000 megawatts for its 201 million citizens [2]. Nigerian power system has the flexibility to meet future demands of the user in a particular area, to transmit it to the area where it will be used and then distribute it within the areas, on a continuous basis. It is design to generate electric power in sufficient quantity to meet the consumers present and future load demand in a particular locality. To ensure that maximum return on the large investment in the equipment, which goes to make up the power system and to keep users satisfied with reliable service, the whole system must be kept in continuous operation without any major breakdown. To enable Nigeria, effectively supply electrical energy on a continuous basis without breakdown, the industry has to look into the future and embrace the unique and dynamic DG to optimize electricity supply in Nigeria. Distribution generation is simply the application of small generating plant (few kW - 50MW) connected at the distribution network or the user’s terminal. The investment in distribution generation will stair Nigerian to invest heavily in sustainable and renewable energy resources like gas fired micro- turbines, solar energy (photovoltaic and solar thermal) and wind energy which is in line with the federal government commitment to solve the long lasting energy crisis in Nigeria through the adaptation of renewable energy master plan (REMP) with a target of increasing power generation capacity from 5000MW to 16000MW by the year 2015 [3]. Overview of Nigerian Electricity Industry: Before 2005, Nigeria was operating with only eight generating stations. Three hydro powers stations namely Jebba, Shiroro, and Kainji situated in Niger state, and two thermal stations namely Egbin and Ijora in Lagos state, 381