FG Clears Air on Why there’s Drop in Electricity Generation

Turbo generator Electricity Generation
Turbo generator Electricity Generation

The Federal Ministry of Power has clarified the issue of electricity generation decline.

In a statement released on Saturday, the ministry clarified the situation.

“We wish to notify the general public that the current dip in electricity generation is as a result of the partial shutdown of the Oben gas plant to address the repair of critical gas processing equipment.”

“The incident unfortunately occurred at a time when other power plants on other gas sources are undergoing planned maintenance and capacity testing.

“We wish to notify the public that Seplat Energy Plc has mobilized equipment, material and personnel to site with a view to expediting the restoration of normal gas supply to the affected power plants.

“We have been assured that the repair work would be concluded this weekend and normalcy will be restored. While pleading with electricity consumers with the current state of supply, we wish to assure the general public that efforts are being made for a sustained improvement of supply across the country.”

There have been complaints regarding a drop in electrical generation, particularly in Abuja, the country’s capital.

Nigerian Electricity Power Generation

Nigerian power generation began in 1886 with the installation of two (2) generating sets to supply the then-colony of Lagos. The Electricity Corporation of Nigeria (ECN) was created in 1951 by an Act of Parliament, and the Niger Dams Authority (NDA) was established in 1962 for the production of hydroelectric power. The National Electric Power Authority (NEPA) was formed in 1972 as a result of the merging of the two (2) organizations. It was tasked with generating, transmitting, and distributing power throughout the country. NEPA was unbundled and renamed Electricity Holding Company of Nigeria in 2005 as part of the power sector reform process (PHCN).

In March 2005, the Electric Power Sector Reform (EPSR) Act was signed into law, allowing private enterprises to engage in the generation, transmission, and distribution of power. PHCN was split up into eleven electricity distribution businesses (DisCos), six generating companies (GenCos), and a transmission firm by the government (TCN). The Nigerian Electricity Regulatory Commission (NERC) was established as an independent regulator for the sector as a result of the Act.

The federal government has sold 60 percent of its interests in the eleven (11) DisCos to private operators, while it has totally unloaded its position in the six GenCos. The Transmission Company is still owned by the government.

The generation sub-sector currently has 23 grid-connected generating plants in operation with a total installed capacity of 10,396 MW (available capacity of 6,056 MW), with thermal based generation having an installed capacity of 8,457.6 MW (available capacity of 4,996 MW) and hydropower having a total installed capacity of 1,938.4 MW (available capacity of 1,060 MW). The National Integrated Power Project includes private GenCos, Independent Power Producers (IPPs), and producing plants (NIPP).

Prior to privatization, IPPs are power facilities that are controlled by the private sector. Shell’s Afam VI (642MW), Agip’s Okpai (480MW), Ibom Power, NESCO, and AES Barges are among them (270MW).

The Federal Government established the Niger Delta Electricity Holding Company (NDPHC) as a public-sector-funded emergency intervention scheme in 2004 in an effort to enhance power generation. The corporation is responsible for managing the National Integrated Power Projects (NIPP), which entails the development of important infrastructure in the generation, transmission, distribution, and natural gas supply sub-sectors of the electric power value chain.

In the generation sub-sector, NDPHC plans to add ten (10) new gas-fired power plants to the grid, some of which have already been finished and commissioned and others which are in various stages of construction across the country. After completion, the NIPP power stations will add approximately 4,774MW of power to the national grid network. The following are the NIPP stations:

  1. Alaoji (1,074MW) in Abia state,
  2. Benin (Ihovbor) (451MW) in Edo state,
  3. Calabar (563MW) in Cross River state,
  4. Egbema ( 338 MW) in Imo state,
  5. Gbarain (225 MW) in Bayelsa State
  6. Geregu (434 MW) in Kogi State
  7. Olorunsogo in Ogun state
  8. Omotosho (451 MW) in Ondo state,
  9. Omoku ( 225MW) in Rivers state.
  10. Sapele (Ogorode)

Some NIPP power stations have already been privatized, and plans are in the works to sell the rest to interested investors in order to boost private sector engagement in the industry and support the government’s reform program.

The Nigerian Electricity Regulatory Commission (NERC) has already licensed many private Independent Power Producers (IPPs), some of which are at various phases of project construction, as part of the reform program. The Commission has also passed Bulk Procurement Guidelines, which will ensure that large-capacity generation is procured in an efficient and orderly manner in the future. The Commission will be able to accurately anticipate the quantity of electricity that can be added to the system each year as a result of this.

In addition, the Commission has devised an embedded generation regulation that permits power producing stations (including renewable energy) to be directly connected to and evacuated through a distribution network. It gives investors, towns, states, and local governments a way to generate, sell, and use power without having to go through the transmission grid. This also allows DisCos to raise the quantity of power they may sell while removing the transmission cost component from the tariff.

Nigeria aims to achieve 40,000MW of generating capacity by 2020 by implementing reforms, and will need to spend about $10 billion per year on the power sector over the next ten years to do so. The Nigerian Bulk Electricity Trading PLC (NBET) purchases power generated by GenCos and IPPs at agreed prices mentioned in Power Purchase Agreements (PPA) and resells to DisCos who distribute the power to the end consumer in the post-privatized power sector.

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