Electricity generation firms give conditions to avoid shutdown

High tension electric powerlines
High tension electric powerlines

Following last week’s warning of an imminent nationwide blackout in the country, electricity generation companies (GENCOs) on Sunday gave conditions the federal government have to meet to avert the complete shutdown of their operations.

On Friday, the Executive Secretary, Association of Power Generation Companies (APGC), Joy Ogaji, warned that the power generation plants belonging to the GENCOs have already shown signs that they could shut down any moment without any further notice.

“The shutdown will happen automatically, because the machines are already giving us the signal that they are about to shut down. It could happen this month. It could happen next month or even tomorrow. Nobody knows exactly when,” Mrs Ogaji warned.

The GENCOs blamed the imminent shutdown of the power generating plants on the inability of the Transmission Company of Nigeria (TCN) to fully take up and transmit more than 4,000 megawatts (MW) of over 7,000 MW available generated electricity.

In a reaction to the warning, Hakeem Bello, spokesperson to the Minister of Power, Works and Housing, Babatunde Fashola, said the TCN has embarked on a number of projects to improve its transmission capacity.

“There are a number transmission facilities constructed by the TCN that the DISCOs are yet hook on to. Other similar projects are ongoing. So, let no operator try to blackmail either the nation or the ministry with claims of inadequate transmission capacity by TCN and a possible nationwide blackout,” Mr Bello said.

The General Manager, Public Affairs of the TCN, Ndidi Mbah, denied TCN has any problem transmitting power generated, considering that all energy demanded by the DISCOs and other consumers are delivered on bilateral/eligible customers’ basis.

“Our capacity to transmit electrify is sincerely on the increase and rapidly too. We do not have any problem transmitting power generated. Available generation is presently higher than demand from DISCOs and other customers.

“What they (DISCOs) demand or are able to take, we collect from GENCOs and give to them. GENCOs can only be allowed to produce what is being demanded in real-time by DISCOs and other end users.”

The TCN spokesperson said at all times, there must be an absolute balance between what customers are consuming and what generating plants produce.

“Ensuring the balance is a very intricate and delicate exercise. Any imbalance will lead to severe system instability,” she said.

“An imbalance occurs when power generated by power plants is greater than load demand from customers or vice versa.

“TCN strives to maintain power balance by adjusting output of generating plants connected to National Grid on continuous basis, to match demand by DISCOs and other customers or force a reduction of demand by consumers.”

Considering that available generation at the moment is more than demand from DISCOs and other customers, Mrs Mbah said TCN is adjusting output of power plants whilst advocating for increased load take up by DISCOs as option for load balancing.

However, in a separate statement on Sunday, Mrs Ogaji identified low power transmission as a result of persistent directive from TCN’s National Control Centre (NCC) to GENCOs to generate electricity below optimal capacity as a major hindrance to efficient power supply.

She urged the federal government to urgently tackle the transmission challenges, apart from taking immediate steps to settle all outstanding payments due to the GENCOs under the N213 billion Nigeria Electricity Market Stabilisation Facility (NEMSF) by the Central Bank of Nigeria (CBN) in 2013.

Also, the GENCOs asked for the outstanding payment for power generated as at January 2015 before the take-off of the Transition Electricity Market (TEM), as well as outstanding invoices for power supplied to the national grid between February 2015 and December, 2016 with accrued interests.

The other demands included payments for deemed capacity for the period 2013 to date; setting up of an effective financing plan after the completion of the N701 billion assurance facility to sustain payments of invoices until 2021. The government had estimated the power market would become self-sustaining then.

According to Mrs Ogaji, contrary to impressions by government officials, power producers in the country have not been better off with existing financial intervention schemes initiated by the federal government.

The GENCOs recalled that at the inception of the power sector privatisation exercise, government had planned to provide them a World Bank Partial Risk Guarantees (PRGs) supported by sovereign guarantees from Nigeria, which has not materialised.

“Without such instruments and the required sovereign backing, it becomes impossible for any bank or financial institution to provide any funding or credit to any GENCO.

“Yet, there is an obvious need for substantial additional investments and funding to develop the Nigerian Electricity Supply Industry (NESI) and put the electricity market on the right growth trajectory,”Mrs Ogaji said.


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