Discos to Procure Power through Alternative Sources

Sam Amadi


Electricity Distribution Companies are to sources for power through alternative means to make up for the shortfall of supply from the national grid to meet the need of consumers

By Anayo Ezugwu  |  Apr. 27, 2015 @ 01:00 GMT  |

THE perennial power problem in the country is still persisting. Power supply from the national grid has slumped below the 3,000-megawatts to 2,988.72MW. The current drop has been attributed to gas shortfall and lower water supply to the nation’s thermal and hydropower plants, respectively. Gas-fired power plants generate about 70 percent of the nation’s electricity, while the balance is derived from hydro power plants, including the Kainji and Jebba power stations, which have a combined installed capacity of 1,330MW.

The downturn in power generation has worsen outages and load-shedding being experienced in many parts of the country, and reversed the recent slight improvement seen after supply fell to 2,767.45MW exactly one month ago. Electricity supply fell to 2,988.72MW on April 12, while 3,060.37MW was generated, according to data from the federal ministry of power. Power generation had on March 11, dropped to 2,747.45MW, while 2,676.64MW was sent out to consumers, down from 3,505MW on March 8.

Power generation and supply in the country have dipped below the 3,000MW mark for at least five times this year. On February 10, electricity supply plunged to 2,869.84MW as 2,936.83MW was generated that day, according to the Presidential Task Force on Power. On January 11, 2015, generation fell to 2,502.39MW, while 2,449.04MW was sent out. Generation fell to 2,948.45MW on January 6, while 2,880.31MW was sent out to the distribution companies.

The downturn in power generation has often been attributed to the sabotage of the Trans-Forcados Pipeline, which supplies gas to several power plants in the country including at least four out of the 11 electricity distribution companies, Discos, across the country. The discos have come together to sign a bilateral power supply agreement which would consequently enable them to purchase power from embedded generation sources to augment shortfalls from on-grid supplies.

The distribution companies, Eko, Ikeja, Ibadan and Jos, have initiated concrete steps to procure additional power from embedded sources to cover up for the shortfall in the amount of electricity supplied to them from the national grid.

Abiodun Ajifowobaje, managing director, Ikeja Electricity Distribution Company, IKEDC, said the Discos that have signified interests on embedded generation were taking advantage of the shortage in on-grid supply to develop alternative supply sources that would always serve as fall back measures at situations of unexpected generation drop in the future. He noted that the initiative would also meet and satisfy the demands of consumers, which is heavily above available supply.

“Most of us want to see opportunities in what are happening with low generation and that is why we are embarking on embedded generation and we are all working to get power from other sources apart from the nation grid. Pending the time we get to that, the little power we are getting is being distributed equitably to our customers,” he said.

On the likely form of tenure that the bilateral supply agreement will take considering the expected Return on Investment, RoI, Ajifowobaje said, “I don’t expect any embedded generator to sign any agreement that is less than five years with a Disco because that is just about the time you can recover your investment but we also pray that we get more power from the national grid. One area that is causing a lot problem for the embedded generation is the cost of gas, they are asking if they will pay for gas at the current government rate or at a market rate and that is where we expect an intervention from the regulator to try as much as possible to see that price of gas for embedded generators is actually cheap,” he added.

Also, Sam Amadi, chairman, Nigerian Electricity Regulatory Commission, NERC, said the distribution companies have opted to explore such off-grid sources as a result of significant drop in electricity generation, which made most of the distribution companies to be getting only one third of their electricity needs from the national grid. He stated this after NERC’s meeting with heads of operators in the country’s electricity sector, that such embedded sources will remain as stop-gap measures pending when there is considerable growth in the country’s on-grid generation supply.

He also stated that such alternative plan would perhaps serve as stabilising sources in the future when Nigeria’s power generation profile grows to planned huge levels. “Some of them have supplies they want to procure quickly. The one from Egbin is available to be sold to two Discos,” Amadi said.


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