A total of 10,106.8 megawatts of electricity could not be generated by the nation’s power plants last week amid lingering challenges in the Nigerian electricity supply industry.
Daily electricity generation in the country averaged 4,601.33MW last week as gas constraints and low load demand by electricity distribution companies limited power plants’ output.
The power plants connected to the national grid produced a total of 32,209.3MW last week, according to daily generation figures as of 6am collated from the Nigerian Electricity System Operator.
The plants could not produce 8,924.4MW because of gas supply challenges while 1,182.4MW generation capacity was left idle as a result of Discos’ low demand.
The government-owned Nigeria Electricity Trading Plc buys electricity in bulk from generation companies through Power Purchase Agreements and sells through vesting contracts to the Discos, which then supply it to the consumers.
The NESO data showed that the power plants generated 4,482.55MW as of 6am on December 13, while 1,915.8MW was left unused.
The plants produced 4,719.13MW, 4,416.89MW and 4,514.7MW as of 6am last Monday, Tuesday and Wednesday respectively but could not generate 1,672.4MW, 1,627MW and 1,495.8MW respectively.
Total power generation rose to 4,559.4MW on Thursday and 4,785.70MW on Friday while unutilised capacity dropped to 1,418.6MW and 1,378.9MW respectively.
On Saturday, the plants’ output fell to 4,730.93MW while unutilised generation capacity rose to 1,390.5MW.
The power sector lost an estimated N4.31bn from December 13 to last Friday “due to constraints from insufficient gas supply, distribution infrastructure and transmission infrastructure”, the Advisory Power Team in the Office of the Vice-President said.
The country generates most of its electricity from gas-fired power plants, while output from hydropower plants account for about 30 per cent of total generation. The hydropower plants are Kainji, Jebba, Shiroro and Dadin Kowa, which was connected to the grid this month.
The system operator put the nation’s installed generation capacity at 12,954.40MW; available capacity at 7,652.60MW; transmission wheeling capacity at 7,300MW; and the peak generation ever attained at 5520.4MW.
The Nigerian Electricity Regulatory Commission said recently Discos would be liable to capacity charge for failure to take their entire load allocation caused by constraints in their networks.
The government-owned Transmission Company of Nigeria, which manages the national grid, is responsible for the allocation of load to the Discos.
“Where it is established that the TCN is unable to deliver load allocation, the TCN shall be liable to pay for the associated capacity charge,” NERC said in September.
It said NBET would continue to invoice the Discos for capacity charge and energy based on their load allocation and metered energy respectively in accordance with the December 2019 Minor Review of MYTO 2015 and Minimum Remittance Order for Year 2020.
The Association of National Electricity Distributors, the umbrella body for the Discos, noted in its latest quarterly performance report that there had been no significant improvement in the electricity generated and wheeled by the TCN since 2015.
It said the commercial performance improvement recorded by the Discos within the last quarters had been affected negatively by the impact of the COVID-19 lockdown.
“The Aggregate Technical, Commercial and Collection losses moving average increased to 45.7 per cent by the end of June from 43.3 per cent in March, changing the declining trend that had been achieved in the last three years,” the Discos said.
NERC, in its latest quarterly report, said the financial viability and commercial performance of the Nigerian electricity supply industry continued to be a major challenge.
It said the level of collection efficiency during the first quarter of 2020 indicated that as much as N3.88 out of every N10 worth of energy sold remained uncollected from consumers.
The regulator noted that the financial viability of the industry had remained a major challenge threatening its sustainability.
According to NERC, the liquidity challenge is partly due to the non-implementation of cost-reflective tariffs, high technical and commercial losses exacerbated by energy theft, and consumers’ apathy to payments under the widely prevailing practice of estimated billing.
It noted that the COVID-19 pandemic and the resultant macroeconomic impact of the policies aimed at curtailing its spread in the country had added to the challenge of low remittance to the market.
“The severity of the liquidity challenge in NESI was reflected in the settlement rates of the service charges and energy invoices issued by MO (Market Operator) and NBET respectively to each of the Discos, as well as the non-payment by the special and international customers for the services rendered by MO,” it said.
President Muhammadu Buhari, said in November that his regime remained committed to addressing the liquidity challenges that were adversely affecting the power sector viability.
“We have noted with grave concern the increased fiscal burden on the Federal Government occasioned by the tariff shortfalls in the sector which are no longer sustainable,” he had said.
He said the Central Bank of Nigeria’s Power Assistance Fund targeted at supporting tariff shortfalls could no longer be extended and must be phased out to promote the sector’s financial independence.