Power sector deficits & socio-economic deformities
Issues dragging over the prevailing deficits in power supply have become interlocking in the analysis of the subject matter. In about a month, power consumers across the Country have been having it tough from incessant outages. This became troubling with the tough circumstances of the scarcity of Premium Motor Spirit, popularly called petrol, in the Country; a situation that has left the masses bitting fingers, as businesses face tough times. Counter-accusations and reactional statements have continued to rove as nationwide blackout occasioned by low grid power generation has continued to linger.
On Tuesday, 8th of March, 2022, the Transmission Company of Nigeria (TCN), had said the current load shedding being experienced nationwide is a result of very low power generation by the electricity Generation Companies (GENCOs) for the TCN to wheel through the transmission grid to Distribution Companies (DisCos) nationwide. In a statement issued in Abuja, the Transmission Company described as “incorrect,” reports in the media “that the TCN has reduced the load allocation to distribution companies.” “The correct position is that TCN can only transmit the quantum of power generated by GenCos through the national grid to distribution load centres nationwide,” TCN had said in the statement signed by Ndidi Mbah GM (Public Affairs). TCN had also argued it does not generate electricity and therefore can only transport cumulative generation from all the GENCOs nationwide to distribution load centres. It said the DisCos are responsible for end-users consumption.
The statement had read partly: “TCN allocates power to distribution companies based on approved percentage (formula approved by NERC), of the total generation available per hour or on day-ahead nomination. Presently, the cumulative generation nationwide is low and generation companies have attributed this to several factors including poor gas supply, fault in generating units of generating companies, scheduled and unscheduled maintenance, all of which have caused most power generating companies to limit their generation, and sometimes not generate at all.
“A summary of the power generating profiles in the last two months, for instance, clearly shows that 14 gas powered generating stations were either not generating at all or had limited generation at various times within the period, further depleting the quantum of power generation available for transmission into the grid on a daily basis. Power generating stations in this category include; Omotosho units 5 & 6, Olorunsogo units 3, 4 & 6. Omoku units 3 & 6, Omotosho NIPP units 3 & 4, Delta units 15, 17, and 18, Afam VI units 11 & 12, Olorunsogo NIPP unit 3, Ihovbor NIPP unit 2, Sapele Steam unit 3, Sapele NIPP unit 1, Odukpani NIPP units 1 & 3, and Okpai units 11, 12 & 18.
“Also, within the same period, Jebba Hydro and Shiroro Power Generating Stations were either out or had limited generation, causing additional loss of 232MW from the grid, while other power generating plants such as Omotosho units 3&4, Olorunsogo units 1, Delta units 10 820, Afam VI unit 13, Ihovbor NIPP units 4, Geregu NIPP units 22&23 and Odukpani NIPP units 2, 4 & 5, have also been out either on fault or for scheduled maintenance, causing a further loss of about 3,180MW from the grid. A combination of the above scenarios have persisted and the total effect on the grid is persistent low generation, which TCN Operators have had to strive to dispatch in a way that will not jeopardize the stability of the grid. More recently, from the 1st to 4th of March, 2022, there was generation shortfall due to water management in Shiroro and Jebba hydro with the loss of 307MW and 125MW respectively from both stations. Within the same period, there were fault and technical problems in Egbin, causing 514MW shortfall and in Geregu causing 230MW shortfall, while reported fault at Alaoji NIPP reduced generation from the substation by 263MW.
“Gas constraint alone in Olorunsogo gas generating plant reduced generation from the station by 104MW, in the same vein, Omotosho gas lost 102MW and Sapele NIPP lost 263MW. In Omotosho NIPP, there was generation shortfall of 233MW and in Omoku a shortfall of 112MW. Two units in Okpai have limited generation due to technical problems causing a 204MW drop in generation and in Afam VI 511 MW drop in generation.
“Gas constraint and fault in Olorunsogo NIPP reduced generation by 240MW, Geregu NIPP by 435MW, and Thovbor by 142MW. Also, due to pipeline pigging, Odukpani NIPP was shut down which caused a reduction of generation by 575MW. A combination of issues ranging from gas constraints, fault, and technical problems within generating plants caused persistent low generation and consequently low load allocation to Distribution Companies nationwide. This is based on the fact that TCN can only transmit what is being generated by GenCos and presently they are all generating below capacity. It is important to note that except cumulative power generation increases considerably for TCN to transmit to distribution companies nationwide, TCN will be left with no choice than to continue to load shed. We will however continue to work hard to ensure the efficient allocation of the total load generated by power generating stations into the grid, bearing in mind the need to ensure that the national grid is stable in spite of the challenges posed by insufficient load on the transmission grid.”
While accusing fingers have been pointed to GENCOs by TCN, new wake of reactions have seen GENCOs accusing the government of defecting in its financial obligations for them to operate efficiently. The GENCOs have claimed they are unable to keep their machines running and pay gas suppliers by the default from the Government; a state they maintained have resulted in low power generation for the grid. Recent deficits have seen power plants generating as low as 2,535 Megawatts for the whole Country, as power outage at critical times have seen blackouts recurring.
In an interview with the Nigerian Television Authority (NTA), the Executive Secretary of the Association of Power Generation Companies (APGC), Dr. Joy Ogaji was quoted to have said lack of payment was hindering the operations of the GENCOs. She was quoted: “The hope we can give to Nigerians is that let the government pay our outstanding. The moment they pay, we will pay our gas suppliers, we will be able to quickly do the maintenance and we will produce again. We are in the business of production. That is something we know how to do. It is money for hand, power for grid. Why is it that hydros (plants) are in maintenance, thermals are also in maintenance? The machines are down; units have been damaged by surges. A lot of destructions on our machines and we are not compensated for that destruction even the power you have taken, you are not paying for it.” Meanwhile, reports have quoted the Nigerian Bulk Electricity Trading Company Plc, (NBET) faulting the claims, saying GENCOs have always being paid as at when due. The company disclosed that for the December 2021 payment cycle, the GENCOs were paid N38billion. Counterargument from Distribution stakeholders have seen claims that the TCN is responsible for the crisis brought to fore in the sector, arguing that in the power value chain the DisCos only collect and give out what is collected. It has been noted that the grid-connected market has stagnated demanding honest solutions.
As Nigeria’s economy suffers the brunt of power deficits, the economic impacts have been debilitating on the masses. The impact of the deficits appear to be clustered in a circle of negativities, bearing strings of incongruous deformities to socio-economic fabrics in the Country. The impacts have seen living conditions becoming unsavoury against the desideratum expected of a Country of Nigeria’s status. The threats against businesses by the deficits have seen increasing notations of cost of production soaring high, as businesses continually resort to alternative sources of power to operate.
The impacts of the increase in cost of production have seen the masses bearing the brunt of increasing cost of goods and services. As purchasing power erodes by harsh economic conditions, among other deforming strings making the business environment harsher, businesses have been going moribund. The impacts on public finance would only see taxes to the government coffers suffering deeply. On macro-economic account, the overarching impact is seeing financing capital projects becoming deeply challenged, except for borrowings as the case have been; reflecting with debilitating impacts, the burdens of accumulated debts. It has become necessary for the Government to, as a matter of emergency, reconfigure the architecture of responses to address the deficits across the chains of the lines of operations in the working structure of the power sector.
