March 22, 2022

Power generation now 3,522.80 MW


…CBN intervenes with N103bn, shuts door from borrowing to power firms

…GENCOs, NBET differ on generating capacity

MAN cries out, says factories shutting down

By Ediri Ejoh & Obas Esiedesa

In what seemed to be recovery in the country’s power sector, there were indications that the average available power generation as at 6pm yesterday rose by 12.1 percent to 3,522.80 Megawatts from 2,312 MW recorded last weekend.

This came as the Central Bank of Nigeria (CBN) said it will inject about N103bn into the power sector to curb grid collapses as well as develop its capacity.

Vanguard gathered that more people have been grieved over the the erratic power supply as Nigerians now hardly enjoy a straight five-hour supply of electricity in a day.

CBN intervenes with N103bn

The CBN is currently providing $250 million to expand electricity distribution and transmission infrastructure as part of an emergency approach to ensure the stability of the country’s grid and power system.

The implementation of the emergency plan by the Federal Government follows the collapse of the national grid twice last week which left the country without electricity supply.

The project, which will strengthen the interface between the Transmission Company of Nigeria (TCN) and the electricity distribution companies (DISCOs) is expected to gulp about N103 billion and spread across critical locations in the country.

According to the Minister of Power, Abubakar Aliyu, the CBN funding, would ensure the rehabilitation of critical interface infrastructure between Transmission and Distribution to increase and stabilize power delivery.

He explained the project is in addition to the Siemens Presidential Power Initiative (PPI) that will bring in additional $2 billion or more to the Transmission Grid from the government.

While the grid has continued to fail with two system collapses this week(Last week) alone, Aliyu said government “is almost $4 billion secured by this administration to augment the grid. It should be noted that many of these funds are being actively spent and the results will be felt over time.

According to him, the interface projects along with others already being embarked upon by TCN brings ongoing projects in the transmission segment alone to 135 ongoing projects with 30 completed key Substation Projects and 12 transmission Lines.

On his part, the Market Operator at TCN, Edward Eje said: “The interface project is aimed at providing quick solutions at various transmission/distribution interfaces where there are challenges.

“This makes sense to me. It is a laudable measure to achieve a seamless and a hitch-free power transmission from the Transmission Stations to the Distribution network.”

The Managing Director and Chief Executive Officer of Nigerian Bulk Electricity Trading Company, (NBET) Dr. Nnaemeka Eweluka, disclosed that the apex bank was able to identify critical projects that could quickly address and restore normalcy.

CBN shuts door from borrowing to power firm

However, the GENCOs have argued that they had been shut out from borrowing as Central Bank of Nigeria, CBN, has shut their doors against lending to them.

The Executive Secretary of Association of Power Generation Companies (APGC) Dr. Joy Ogaji, stated that “The GENCOs have exhausted all their borrowing sources, as the CBN had reportedly warned the banks to desist from lending money to them.

“If you give us gas, provide forex to carry out maintenance. I have told you most of the units are down and they need money to fix them. Give us enough money to pay our gas suppliers because it is pre-payment. But for power, it is take and pay later. There is no way that this misalignment will help us.”

Ogaji, stated that the association has never threatened to deliberately put the nation into darkness as reported by the online media.

Ogaji reiterated that “GENCOs are committed investors with patriotic zeal. We commisurate with Nigerians on current situation as we are not exempted from it.

“All we plead for is an enabling environment for business capable of attracting more investment into the power sector strive.”

Emphasizing the key role of PPAs in ensuring stability in electricity industry, Dr. Ogaji said the assumption that GENCOs are asking to be paid for electricity generation capacity instead of the actual power consumption is unethical.

Many Nigerians, she said, have asked endless questions on why they pay for capacity for power we did not consume. 

“We have thought it wise to explain to Nigerians in a way it will be understood. Capacity Charges are fees you pay to ensure that the electricity you might use is there for you when you need to use it.  Capacity payments are global norms in the electricity supply industry and play critical roles in enabling the GENCOs to optimize their power generation capacities, making such capacities available when called upon.

“In every Power Purchase Agreement (PPA), nominated capacity, metered energy, and deemed capacity are among the must-occur events.

GENCOs can generate 9,000MW – APGC

Despite data suggesting otherwise, the APGC has claimed that power generation companies have the capacity to put 9,000MW on the grid if the money owed them for unutilized capacity is paid by the Nigerian Bulk Electricity Trading Plc.

Ogaji, said the N1.6 trillion debt owed by NBET is crippling the operations of the GENCOs.

She said: “the illiquidity caused by the huge sums owed GENCOs by NBET, has more than ever before continued to frustrate the GENCOs and kept them incapable of meeting their obligations which are extremely necessary to keep their power plants running and make capacities available, while observing required Health, Safety and Environment (HSE) standards.

GENCOs have no such capacity – NBET

In its reaction, NBET disputed the figures quoted by the GENCOs, saying only companies with active gas supply and transportation contracts were paid for unutilized capacity.

 The Head Corporate Communication, NBET, Henrietta Ighomrore, explained to Vanguard that in the country only five power generation companies with active Gas Purchase Agreement were paid for unused capacity.

According to her, claims by Dr. Ogaji that the GENCOs have the capacity to generate 9,000MW were not accurate as inspections by NBET have shown that the capacity does not exist.

Similarly, the Kwara/Kogi branch of the Manufacturers Association of Nigeria (MAN) has raised alarm over the skyrocketing price of diesel, saying it has become almost impossible for them to operate.

The branch in a statement by its Chairman, Bioku Rahmon therefore appealed to the Kwara State and the Federal Governments to urgently come to the aid of the manufacturing industry.

Rahmon said failure to rescue the investors and factory owners would result in massive unemployment due to closure of the factories.