July 1, 2022

Electricity output plan kicks off today on 5,505mw FG, GenCos deal


…25 plants guarantee minimum supply

By Obas Esiedesa

The Federal Government has activated a partial Power Purchase Agreement, PPA, with electricity generation companies, GenCos, for the supply of 5,505 Megawatts (mw) of electricity for peak generation and a base load of 4,893mw.

The move, which is part of efforts by the government to improve electricity supply, takes effect from today, July 1, 2022. The agreement was reached on Tuesday with the operators.

The agreement guarantees payment for gas supplied to the GenCos by gas companies and also ensures that the generation companies are paid for power supplied to the national grid.

With the new agreements it means all the 25 power generation plants on the grid now have an agreement in place to generate a certain amount of power and get paid for it.

The Chairman of the Nigerian Electricity Regulatory Commission, NERC, had earlier in June assured consumers that the sector would generate about 5,000mw from July 1, 2022.

Confirming the deal in a chat with Vanguard, the Head of Corporate Communication, Nigerian Bulk Electricity Trading Plc, NBET, Henrietta Ighomrore, said the agreement was good for the sector as now everyone has become aware of what is expected of each operator.

Ighomrore noted that with the deal, NERC has challenged each operator to perform at a certain level in line with the agreement.

“The whole process is to optimize the generation portfolio and ensure efficiency in the system. This ensures all participants within the value chain are committed to improving performance and meeting the target set.   The Regulator has facilitated this process to assure sustained generation within the network”, she stated.

She explained that the PPAs were not entirely new deals as they were already existing but are being partially activated because gas supply and gas transportation agreements are now also in place.

She stated: “We have 5,505mw at peak load and 4,893mw as base load. It is a good target in my own opinion. It is good for us to challenge ourselves to be able to deliver the best. It is good for all of us, let us move towards efficiency”.

The GenCos a few days ago, through the Association of Power Generation Companies, APGC, insisted that the government should provide guarantees for gas supply, but Ighomrore said “what has happened now is that the risk has been allocated to the best person that is supposed to handle it.”