Nigeria to Start Electricity Trading within W’African Region in June

Report: Power sector loses N2.8bn to gas constraints, others

Nigeria and its other West African neighbouring countries will begin formal trading in electricity generated within the region from June this year, the Chairman of the West African Power Pool (WAPP) and Managing Director of the Transmission Company of Nigeria (TCN), Mr. Usman Mohammed, has disclosed.

Mohammed explained yesterday in Abuja that the formalisation of the electricity trading arrangement would be done under WAPP and the ECOWAS Regional Electricity Regulatory Authority (ERERA).

He added that Nigeria would be able to sell and buy electricity from other West African countries within the arrangement.

At the moment, Nigeria sells electricity generated from her power stations to Benin Republic and Niger Republic. Mohammed however stated at a meeting of the WAPP executives that under this arrangement, the country would be able to sell and buy power from other ECOWAS countries like Ghana and Ivory Coast.

According to him, “WAPP in conjunction with ERERA, the regulatory body for West Africa is hoping to launch the regional electricity market by June 2018. Because of that, there are several sensitisation we are carrying out to sensitise member utilities firms on the plan to kick off the regional electricity market.

“There are several things that are involved in the regional electricity market and synchronisation is just one of them. It means that all the electricity that is generated across the sub region have to be synchronised so that from Nigeria to Cote D’Ivoire, can have the same power frequency and other places.

“As TCN, we anticipated this and that is why last year, we embarked on the frequency control which we achieved and attained at 39.5 and 30.5 frequency. In the last 20 years this has not been achieved and it enabled WAPP and the rest of the country to synchronise their power,” Mohammed added.

Asked if the launch of the regional market has taken care of payment for power generated and sold to utilities across the region, and especially with regards to Nigeria’s challenges with payments for electricity, Mohammed said that a lot of mechanisms are being put in place to ensure prompt payment.

He said: “We have other mechanism we are putting in place to ensure payment in the market but even as it is, the payment in the international market is far better than the local market and we are still working to improve it. Whether it will gurantee 100 per cent payment, I cant tell you because even in the WAPP sub region like Benin and Niger, the distribution companies are still the weakest link as they are not collecting all the money.

“We are working with WAPP to improve the collection capacities of distribution firms by forming mechanisms that will guarantee payment like this synchronisation.”

Speaking further on how Nigeria could benefit from the regional power trading arrangement, Mohammed stated: “The WAPP is to enable trade between Nigeria and other countries. Trade create jobs; if there is a generation company in Nigeria that sells power to Benin, that company will create job for Nigeria. It is also creating business for our country because the company that is selling energy in Benin will also be able to make profit.

“The vision of the regional electricity market is also to provide energy security so that if tomorrow, Nigeria has a problem of gas supply, Nigeria can import energy from Ghana or Burkina Faso depending on which has cheaper source of energy. We are not also building transmission lines for just five to 10 years, it is something that should last for 100 years to boost electricity trade.

“For the Nigerian electricity market, we are doing many things to ensure things work differently. For transmission, we have put significant money to put enough capacity for transmission. We believe that in the next two to three years, we will have the N-1 international standard all over the country. We are making sure to optimise and implement our projects in the most effective way. If you check, almost on weekly basis, we are commissioning transformers,” he added.

He also talked about the status of a couple of cross border transmission projects that are going on and should support the launch of the regional market.

He said: “The north core (project) is the transmission line that four countries plan to build to connect Nigeria with Benin, Niger and Burkina Faso. It will run from Birnin Kebbi in Nigeria to the border and from Niamey in Niger, it will also tee off to go to Benin and from Niamey, it will move to Burkina Faso.

“That line is going to be financed by the African Development Bank and the French Development Agency. The component of the AfDB is concentrated on the side of Ouagadougou, Burkina Faso and Niamey in Niger. That component have been already approved by the board of AfDB and the agreements signed with those countries.

“The component that concerns Nigeria is about 62 kilometres from Birnin Kebbi to the border and we are discussing with World Bank to finance it. All the studies for it have been carried out including the environmental disclosure. For us to be able to supply energy on that line, we also have to build a 330kV double circuit line from Kainji hydropower plant to Birnin Kebbi which is part of the northern corridor project of TCN. We have done the feasibility study and what AfDB is waitin for is the validation of the feasibility study which we have hired a consultant to do hat. We are at the final stage of completing the procurement of that contract,” Mohammed explained.

Meanwhile, operational reports from the power sector advisory team in the Office of the Vice-President for the first three days in April have shown that Nigeria’s electricity market lost a total of N2.877 billion to gas shortage and other constraints in the sector.

The reports also noted that the sector could not generate up to 5,993 megawatts (MW) of power into the national grid within the period, adding that both water, distribution and transmission constraints were responsible.

It said on April 1, the sector could not generate 1,946MW of electricity thereby losing N934 million; on April 2, it lost 1,942MW and N932 million; and then on April 3, it failed to earn N1.011 billion because it could not generate and sell 2105MW of power.