Nigeria loses N40.55 billion revenue in the power sector due to inadequate gas supply, and challenges with distribution and transmission infrastructure and water reserves

INADEQUATE gas supply to run turbines in the last one month in the country has made the Nigerian government to lose N40.548 billion revenue. Apart from insufficient gas supply, the challenge with distribution and  transmission infrastructure and water reserves contributed to the loss.

In January 2018, the highest electricity revenue loss was N1.695 billion occurring on the January 1, while the least revenue loss was N906 million on January 11. On average, N1.308 billion in electricity revenue is lost on a daily basis.

Data obtained from the Nigerian Electricity Supply Industry Statistics, NESIS’s website, revealed that the loss was as a result of the shutting down of some gas turbines which led to insufficient gas supply, limitations in distribution and transmission infrastructure and water management constraints in some of the hydro plants.

Delta Gas Turbine, GT, 18 tripped on high inlet differential pressure and it was eventually shut down. Para Energy, GTs 2 to 9 was shut down due to a planned outage on Ikorodu/Shagamu 132KV Line, putting the total load loss at 68.6mw. Also, Omoku, GTs 1 to 3 and 6 tipped on reverse power due to tripping of Alaoji/Afam132kv line, with a total load loss of 53.6mw.

Further statistics from the Advisory Power Team indicated that on January 28, 2277MW was not generated due to unavailability of gas, 150MW was not generated due to unavailability of transmission infrastructure, while 287MW was not generated due to high frequency resulting from unavailability of distribution infrastructure and 290MW was not generated due to unavailability of water.

As a result, the power sector lost an estimated N1,44,000,000 due to insufficient gas supply, distribution infrastructure, transmission infrastructure and water reserves same day.

Realnews also gathered that the largest power generation for the month was 4,148MWh/hour, generated on the January 12, whereas the lowest power generated was 2,596MWh/hour on the January 3. While the average daily generation was 3,705Mwh/hour at the national level.

Also, the Distribution Companies, Discos, remittances to the Nigeria Bulk Electricity Trading Plc, NBET is still below 30 percent. This has over time, affected liquidity in the sector.

Perhaps, this is whyJoy Ogaji, executive secretary, Association of Power Generation Companies, said GENCOs have no contractual agreement with the Discos on debt recovery but they have an agreement with the NBET who act as the link between the GENCOs and the Discos through Power Purchase Agreement, PPA and vesting contracts.

“Therefore, the decision lies with NBET to put in place measures to ensure that the Discos improve their monthly revenue remittances which as at today, is below 30 percent. Since takeover distribution companies have failed to improve on their networks leading to high load rejection, Discos have also failed to meter customers and only insist on tariff hike.

“Tariff increase should come with a corresponding improvement on distribution infrastructure nationwide. The GENCOs have repeatedly stated that the transparency and visibility of market funds collected by the Discos remain the best way to reduce the liquidity squeeze in the sector but the Discos have kicked against this,” she said.

She emphasised the need for adequate investment in the distribution infrastructure to increase efficiency. “They should further ensure that Service Level Agreements are implemented for distribution companies’ performance based on their business plans,” she said.

In a related development, the Eligible Customer Declaration by the ministry of power which enables GENCOs to sell power directly to some selected class of consumers, when implemented will also help reduce the debt burden of GENCOs.

Babatunde Fashola, minister of power, works and housing, has put the total percentage contribution of the three hydropower GENCOs in Nigeria – Kainji, Jebba, and Shiroro, to the country’s daily power generation at 26 percent, up from 15 percent that he said was the situation in 2015.  The minister stated that the contributions of hydropower to Nigeria’s energy mix has reduced that of gas power generation to 74 percent from 85 percent he said was the case in 2015.

– Feb.  17, 2018 @ 5:00 GMT |