50% of NIPPs power stranded over distribution hiccups ... privitisation underway as gas supply hiccups resolved
Electricity Generation Companies (GenCos) under the National Integrated Power Project (NIPP) have over 50 percent of their power generation stranded due to the poor distribution network to wheel it to consumers, Daily Trust can reveal.
The NIPPs parent company, Niger Delta Power Holding Company (NDPHC) which built, operates and maintains the 10 NIPP GenCos, have a combined design capacity of 5,453 megawatts (MW) with 4,774MW installed capacity.
NDPHC said it has drastically combated gas constraints, but it is now facing the lack of adequate distribution facilities and networks for the 11 Distribution Companies (DisCos) to take more electricity to customers in spite of the huge generation capability and the incessant outages being recorded in Nigeria.
The Managing Director of the NDPHC, Mr Chiedu Ugbo confirmed this last week in Abuja when he said gas supply to the NIPP GenCos improved due to the N701bn PAG intervention.
“The introduction of the N701bn Payment Assurance Guarantee (PAG) by the federal government since April this year, operators of the NIPP GenCos along with other power stations said they now get up to 80 per cent of their monthly invoices for January 2017 till 2019.”
The Nigeria Bulk Electricity Trading Plc (NBET) in its recent publication said it has paid about 50 per cent of such fund in addition to the 30 per cent remittances from the DisCos for GenCos’ invoices from January to October 2017, ensuring gas suppliers are paid adequately for the last 10 months.
Statistics on electricity generation obtained from the Transmission Company of Nigeria (TCN) yesterday showed the status of the operational NIPP plants as at last Thursday when the national grid reached a peak generation of 4,293MW with 6,083MW available generation capability.
After seven years, the first two, 434MW Geregu Generation Company (GenCo) in Kogi state and 513MW Omotosho GenCo in Ondo state were commissioned in October 2013. Six others were commissioned and began operation between 2014 and 2016.
Breakdown of the TCN report showed that the 434MW Geregu GenCo generated only 100MW which was less than half of its capacity; Alaoji GenCo could do about 540MW but it was down during the period; Sapele GenCo generated 174MW but has capacity for 451MW; Benin GenCo generated 86MW but has 451MW installed capacity.
The others are 562MW Calabar GenCo which generated 287MW; Omotosho GenCo has 451MW capacity but generated 103MW; Olorunsogo GenCo has up to 676MW capacity but only produced 153MW, and Gbarain GenCo produced 94MW from its 225MW capacity.
The records however showed that the generation was below 50 per cent of their installed capacities while two GenCos - 338MW Egbema NIPP and 225MW Omoku NIPP, are still under construction.
The Minister of Power, Works and Housing, Mr Babatunde Fashola confirmed the inability of many GenCos to generate higher electricity because they are now limited by the ability of the DisCos to take more power to customers, and not the issue of gas constraints which had prevailed before May 2017.
Fashola who spoke at a power sector operators’ meeting at Geregu near Lokoja specifically said: “When I visited in 2016, only one turbine was running in each of Geregu I and II plants because of no gas out of six turbines. Today, all the three turbines in each are running because there is now some gas.”
Mr Ugbo who spoke about the new challenge of inadequate distribution networks said the focus of the NDPHC for 2018 is how to deliver more distribution projects and injection substations across cities in Nigeria so that the DisCos will have improved capacity to deliver more electricity to customers.
NDPHC commissioned the Ikot Ekpene 330 kilovolt (KV) transmission switching station on November 21, 2016 to improve power evacuation by the Transmission Company of Nigeria (TCN). With the station, TCN can now evacuate over 1,000mw electricity from Alaoji, Afam, Calabar and Ibom Power after being stranded for about two years.
Documents obtained from the NDPHC spokesman, Lawal Yakubu show that since 2016 when Mr Ugbo assumed office, 36 units of 330kV and 132kV substations have been commissioned for TCN operation.
It also constructed about 1,635km of 330kv Double Circuit (DC) lines, 720km of 132kV DC lines and 10 new 330kV substations among others. These interventions contributed to boosting Nigeria’s transmission capacity to about 7,000MW as at November 2017.
The Daily Trust also gathered that within the first one year of Mr Ugbo, the privatisation of the 10 NIPP GenCos have advanced with the hope of achieving the deal to privatise three GenCos soon.
An NDPHC official who is privy to the transaction said Nigeria will earn $1.975 billion (about N711.8 billion) from the deal by selling 80 per cent of the shares in 560MW Calabar station, 513MW Omotosho station, and 434MW Geregu GenCo.
The transaction was delayed in 2014 some few months after the PHCN privatisation of 2013, the electricity market had liquidity crisis and foreign exchange (forex) issues which challenged investors and lenders in the power sector.
The preferred bidders emerged for the 10 thermal plants in March 2014 seeking to own 80 per cent equities of $5.8 billion (about N2.09 trillion) in the plants while government retains the 20 per cent equity.
The three operational GenCos are in the first phase: EMA Consortium won Calabar GenCo at $625m (N225.3bn), Omotosho Electric Power won Omotosho GenCo at $659.9m (N237.8bn), and Seoul Electric Power Ltd won that of Geregu GenCo at $690.2m (N248.7bn) totalling $1.975m and about N711.8bn.
Confirming the on-going phased privatisation of the GenCos with full support from President Muhammadu Buhari, Mr Ugbo said: “We have negotiated the share sales agreement and we are negotiating what percentage the bidders should pay now and what they should pay later and when they should pay.”