Electricity generating companies (GENCOs) on Sunday faulted the allegation that they claim to generate more electricity than they do so as to collect more money.
They said the allegations by the Transmission Company of Nigeria (TCN) shows a lack of adequate knowledge of the workings of the country’s electricity market.
In a recent statement through its spokesperson, Ndidi Mbah, TCN said most of Nigeria’s power plants submit generation capacities they are unable to deliver to the National Control Centre (NCC) on demand.
“The NCC operates strictly in line with the grid code and merit order. Stability of the national grid is paramount. Unfortunately, many GENCOs, due to greed, destabilise the grid through illegal practices in order to collect more money from NBET.
“They do so through false capacity declarations, unwillingness to put their generators on effective frequency response, delay in executing NCC dispatch instructions, intimidation and blackmail of NCC operatives,” the TCN statement said.
But the Association of Power Generation Companies (APGC), the umbrella body of all GENCOs in the country, described TCN’s allegation as malicious and baseless.
It said it also shows ignorance of the Nigerian electricity market proceedings by TCN.
The APGC Executive Secretary, Joy Ogaji, in a statement sent to PREMIUM TIMES said its members “strongly disputed” the allegation.
“It is important to clarity that GENCOs are not currently paid on capacity declaration, but only on delivered capacity,” Mrs Ogaji said.
Delivered capacity, she explained, means conversion of metered energy to capacity, a practice, she noted, was “unknown or practiced by any electricity market in the world.”
According to her, it is impossible for the GENCOs to falsify their generation capacity claims since such declarations are usually confirmed by the NCC before allocating same to the distribution companies (DISCOs).
Besides, she argued, considering that the NCC cannot allocate what was not available, it was absurd and baffling how the TCN reached its conclusion.
The APGC executive secretary insists GENCOs not only have available capacity, but well above the capacity of the national transmission grid to evacuate.
She said the question that should concern the TCN should be why the national grid with about 12,000 megawatts (MWs) capacity is not able to evacuate 7,500MW of electricity.
“Can the DISCOs’ alleged load dropping account for TCN’s inability to evacuate the GENCOs available capacity?” Mrs Ogaji asked.
According to her, the grid constraints and inefficient grid administration by TCN could be the reason why the NCC forced GENCOs to ramp down on their generation capacity and is refusing to take responsibility for incidental charges.
Mrs Ogaji said it was difficult to distinguish between the alleged load dropping by the DISCOs and transmission inefficiency by TCN, pointing out that of late the latter was to blame for serial burning of power transformers across the national grid.
She said the inability of the grid to evacuate available electricity generated by GENCOs resulted in the NCC dictating the volume the grid can carry.
“No GENCO can declare the generation capacity it does not have. The NCC uses SCADA (supervisory control and data acquisition) and other electronic means to confirm every GENCOs declared capacity.
“Therefore, it takes ignorance of the market flow to make such a frivolous allegation that GENCOs declare false capacity they cannot make available on demand,” Mrs Ogoji said.
Again, she said the NCC’s capacity monitor, the Nigerian Bulk Electricity Trader (NBET) as well as the Independent System Operator (ISO) periodically send their teams to conduct capacity test on all GENCOs to re-confirm NCC’s capacity data.
The APGC boss said in a regulated electricity market such as Nigeria’s, operators and market participants are bound by regulations and rules.
She noted that since TCN, through its subsidiary, the NCC, was the source of all power sector data on generation, transmission, distribution and consumption/demand forecast, the allegation of falsified capacity declaration was worrisome.
Early this year, Vice President, Yemi Osinbajo disclosed that for the first time the country’s power generation capacity rose above 7,000MW, with delivered capacity at about 5,100MW.
Minister of Power, Works and Housing, Babatunde Fashola, also confirmed the figure, while President Muhammadu Buhari in his Democracy Day speech on May 29, said the country’s current available power generation capacity stood at about 7,500 MW.
“If TCN’s allegation is taken seriously, it means the President and all other top government officials based their information on false data provided by the NCC, for which TCN has serious questions to answer,” Mrs Ogaji stated.
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