The Nation Newspaper

Tag: power sector

  • ‘Power sector funding gap exceeds N300b’

    ‘Power sector funding gap exceeds N300b’

    The 11 electricity Distribution Companies (DisCos) under the umbrella of Association of Nigerian Electricity Distributors (ANED) yesterday said from 2013,  the funding gap in the power sector is now over N300billion.

    The  group’s spokesman, Barr Sunday Oduntan, who spoke to reporters in Abuja yesterday, urged the Federal Government to create mechanisms to drive further investments into the sector.

    According to him, a fair Multi Year Tariff Order (MYTO) was meant to cushion the impact but has not been cost reflective until the recent one signed in December last year.

    Mr.Oduntan said the MYTO 2.1 was then suspended till February this year noting that the privatised companies bore the revenue gap of January when the MYTO was not enforced.

    The spokesman also urged the Federal Government to strengthen transmission services by doing a proper concession on managing and investing in the Transmission Company of Nigeria (TCN).

    He said the Discos can distribute over 10,000megawatts (Mw) but are constrianed by inadequate transmission infrastructures citing instances of poor allocation to Kano DisCo.

    TCN requires about $7billion to construct a new 10,000Mw grid and another $1.2billion to fix the existing grid, Oduntan said.

    Reacting to recent court judgment reversing the prevailing tariff last week, ANED said the DisCos could not get loans from banks prior to the current tariff as the business was deemed not bankable.

    “I enjoin us to look at the issues in the sector. Inappropriate tariff leads to shortfalls and that leads to funding gaps which has risen above N300billion.

    “The MYTO 2015 corrects the funding gap but it is spread over 10 years and recovered gradually; if you look at the template, the tariff will go down after the first three years,” Oduntan explained.

    The Nigerian Electricity Regulatory Commission (NERC) last Friday said it has filed a stay of execution action on the 45 per cent average rise in electricity tariff while appealing against the court ruling.

    Mr Oduntan admitted that but for vandals’ actions on oil and gas infrastructures since March this year, industry operators expected a rise in generation to about 6,000Mw from the 5,072Mw attained in February, a day after the tariff was enforced.

    He said significant improvement in power supply would have led to more revenue generation and speedier investments in rolling out meters, transformers and strengthening of networks since March.

     

  • Power sector loses 4,407Mw

    Power sector loses 4,407Mw

    The Nigerian Electricity Supply Industry (NESI) would have supplied the 11 Distribution Companies (DisCos) 6,410 Megawatts (Mw) on Monday, but for constraints ranging from water and gas shortages, as well as delays of switching on the Alaoji-Ikot Ekpene transmission line.

    All the constraints culminated in the loss of 4,407MW on the day under review, said the NESI daily report that it yesterday posted on its website as part of Monday activities in the market .

    Despite the challenges, The Nation gathered that the Nigerian Electricity System Operator (SO) of the Transmission Company of Nigeria (TCN) sent out 2,003 Mega Watts MW to the 11 DisCos

    It said the electricity market recorded 4,322MW gas constraints and lost 85MW consequent upon line constraint.

    “Repair of critical gas pipelines is stalled due to threats to contractors by the so-called Niger Delta Avengers,” it was gathered yesterday.

    The website of the Nigerian Electricity Supply Industry (NESI) that made the disclosure as its daily summary report for Monday, added that that the market did not record any water constraint.

    Following the data, the market would have supplied 6,410MW if there were no constraints.

    The SO said that the constraints resulted in the loss of an equivalent of N2.115b.

    It reported that : “On June 27 2016, average energy sent out was 2003 MWh/hour (up by 72MWh/h).  The reported gas constraint was 4322MW. The reported line constraint was 85MW. The water management constraint was 0MW. The power sector lost the estimated equivalent of N2,115, 000, 000 on June 27 2016 due to constraints.”

    The Nation however learnt that Okpai has been reconnected to the grid. The source that spoke with our Abuja correspondent said that there was a total system collapse at 1505hours of June 25.

    He added that Odukpani (Calabar) plant was shutdown in the wake of vandalism of critical pipeline infrastructure, stressing that Alaoji was also affected. The source also revealed to The Nation that “Ikot Ekpene switching station is undergoing pre-commissioning tests, also completed Alaoji-Ikot Ekpene 330KV DC Line is delayed.”

  • Fed Govt urged to revisit privatisation of power sector

    Fed Govt urged to revisit privatisation of power sector

    The  Chief Executive Officer (CEO), Mommas Engineering Meters Manufacturing Company Limited (MEMMCOL),  Kolawole Balogun, has urged President Muhammadu Buhari to re-visit the privatisation of the power sector.

    Balogun spoke at a news conference in Lagos.

    He said the role of the DISCOs should be separated from that of electricity marketing companies (EMC) for the development of the power sector.

    Balogun said: “Power sector “re-privatisation” may have to be tabled again, wherein DISCOs role is limited to power distribution up to the transformer-point (at one-end) and allow for electricity marketing companies (EMC) to take it from there to the consumers. So, DISCO ensures power transmission is always and effectively delivered to the connecting transformers, while EMC ensures the power is effectively distributed to the consumers (metered for billings and feedbacks).”

    According to him, most  transformers in place cannot withstand the amount of power required by the consumers.

    “Technically speaking, power transmission companies have enough electricity to supply to the consumers through the DISCOs, routed through power transformers. However, most current transformers in place cannot withstand the amount of power or energy required by the consumers.”

    He argued that the DISCOs have been overwhelmed by distribution and marketing. He said the marketing companies should not be organs of DISCO, but interdependent.

    He added that Nigerians clamoured for locally manufactured electricity meters.

    He said local manufacturers want government to promulgate an enabling law to enhance the patronage of locally-manufactured meters and products.

    He said the country has local manufacturers of meters that can produce close to 150,000 meters monthly, explaining that his company  has the capacity of producing 50,000 meters per month.

    “Infact, more licences should be given to more companies, after accreditation in order to flood the markets with enough and quality meters and smart meters. Investors here and abroad will begin to look into the power sector to stock it with much more funds than we presently have. With time, Nigeria will run an efficient, steady-state power sector to be envied,”he said.

     

  • ‘Reduce corruption in power sector’

    ‘Reduce corruption in power sector’

    President of the International Centre for Commerce, Chief Alex Obi Odunukwe, has lauded President Muhammadu Buhari’s determination in the anti-graft war and urged him to take the battle to the power sector.

    Odunukwe lamented that unstable power supply makes it difficult for businesses to power their operations while homes that are able and willing to purchase prepaid metres can usually not do so because of artificial scarcity.

    “There is no power to encourage production of goods and services in the country. Many industries and factories cannot produce due to scarcity and high cost of diesel. Let there be availability of prepaid metres everywhere. People are willing to pay for it at any cost but it is no where to be found,” he said.

    Odunukwe, who is also President, Balogun Business Association ((BBA) Trade-Fair, Lagos, hailed the Governor Akinwunmi Ambode and his Anambra State counterpart, Willie Obiano, for their strides in road construction and security.

    He spoke when he donated cash and food items worth N500,000 to two orphanages- Life Changers Orphanage Home, Festac and So-Said Charity Home, Okota, Lagos. He urged the President to look at ways of reducing the cost of doing business in the country.

    “We used to buy $1 for N150 but now it has risen above N300. This seriously affects the last consumer, thus increasing the sufferings of the masses. Let the government reduce the exchange rate,” Odunukwe said.

     

     

  • Power sector loses 3,956Mw to gas shortage

    Power sector loses 3,956Mw to gas shortage

    The crisis rocking the Nigerian oil and gas sector has caused the power sector 3,956 Mega watts (Mw), The Nation learnt yesterday.

    The serial cases of pipeline vandalism and the intense bombing raids on oil facilities in the Niger Delta region, have combined to deny power generating plants the needed feedstock to power and generate electricity for the nation.

    A daily summary of the Nigerian Electricity Supply Industry (NESI) however showed that the electricity market on Monday sent out an average of 3,956Mw to the 11 Electricity Distribution Companies (DisCos).

    The post on the NESI website indicated that the power sector lost N2,280, 000, 000 on the day under review.

    It noted that the electricity market also recorded 414Mw line constraint and 380 water management constraint.

    The NESI Monday daily report said: “ On June 06 2016, average energy sent out was  2,423Mwh/hour (down by 113 Mwh/h). The reported gas constraint was 3,956Mw.

    “The reported line constraint was 414Mw. The water management constraint was  380Mw. The power sector lost the estimated equivalent of N2,280, 000, 000 on June 06 2016 due to constraints.”

    It was gathered that at 8.00am yesterday, power allocation to the Kaduna Electricity Distribution Company and Kano Electricity Distribution Company was 120 Mw each.

    According to an insider source, at noon, the allocations to the two firms reduced to an average of 75MW.

     

  • Power sector records zero ‘spinning’ reserve

    • Loses N2.008b

    The Nigerian Electricity Supply Industry (NESI) yesterday recorded zero megawatts spinning reserve, which made the grid unstable.

    Spinning reserve is the difference between the total generated energy and what Nigerian Electricity System Operator sends out to the  electricity distribution companies (DisCos).

    An industry source said there was zero megawatts  spinning reserve on Tuesday, thereby making the grid extremely unstable. “It was a difficult decision to take but there was no point building up a back-up when there was no energy to send out.”

    In its data on daily summary system performance, NESI however said on Monday that the electricity market’s lowest generation was 2,482.90Mw while it sent out an average of 2,530Mw.

    The market lost 3,667Mw to gas constraint, 136Mw to management constraint and 380Mw to water management constraint, which culminated in a financial loss of N2,008, 000, 000.

  • Why not subsidy for power sector? 

    SIR: The on-going fuel crisis has brought the nation’s attention to the importance of petrol, diesel and kerosene to the lives of Nigerians, rich or poor. Even though petrol price is subsidised by government, its availability is not guaranteed because it is largely imported. At the moment, our various refineries are not working at full capacity as a result of our notorious  and well  known  poor  maintenance  culture. In  addition, most Nigerians believe  that because  Nigeria is known as an oil rich  nation,  Nigerians  don’t  have to pay  for petrol  to  power their  vehicles.  Worse  still,  they believe, wrongly though,  that  since corruption is the prevalent  culture of the land, petrol at the lowest price or at  no  price at all is their own  share of the national  cake. Unfortunately  that  national  cake is dwindling in value  with falling  oil  prices  prompting urgent  calls  for  diversification  to  agriculture, Solid Minerals  and  Steel, all hitherto  neglected.

    At the foundation laying ceremony of the Kam Steel Integrated   Project  in Jimba  Oja, Ilorin recently,  there  were  calls for a N500bn intervention fund  for  the steel industry, N500bn   for  Solid  Minerals,  and   calls  for special  consideration for indigenous players  in the industry. These  are calls that the Federal  Government, represented  at the ceremony  by   Vice  President Yemi Osinbajo  has vowed  to take  seriously as part of  the  on-going diversification of the   economy.  This is a task  that any  government worth its  salt must take  seriously and  certainly the  Buhari  Administration  will want  to  be seen  in that light .

    It is on that  premise therefore  that  I  call on the federal  government to seize  the  bull  by  the  horn  and  do same for the electricity  and power  sector what  it is being  asked for the solid minerals and  steel  sector.

    The intervention funds or subsidy  in the power sector  should be solely  for  power  generation  and delivery.  This is because power  distribution  companies have  become  the whipping boys of the sector through no fault of theirs. They  are being asked to distribute  power  which  is  not  available. Yet  electricity delivery  will make even  more immediate economic   and  commercial  impact  than  subsidized  fuel  and intervention in solid  minerals and steel.

    After all, availability of electricity  will power small businesses  and  cottage  industries  which  have  made  developed  nations like Italy  famous in spite of their poor economies. Small  scale industries and  the  private  sector will  be quite  productive if subsidized  electricity is delivered  for their operations  and commercial activities. The  multiplier effect  of this on our educational and health  sectors  will make  the future  brighter and healthier  for our  children  and youths.  It  will burnish   as well  our  fast growing entertainment industry and theatre  arts organizations,   and the music  industry  which  is fast  growing and providing  meaningful  employment  to our otherwise unemployed  youths and talented artists.

    Discos  are the face of electricity supply because  they are the people and organisations the consumers  see in terms  of  bills  and  complaints but they  are  just  a link in the value  chain  of electricity  delivery. They  do  not  generate electricity but  only  deliver  and customers  usually  hold them  responsible for blackouts and lack of power that is beyond them and quite unfair.

    It is the  core  responsibility  of  government  to  ensure  that generated  power is available  for  Discos  to  distribute. If  government  can subsidise  fuel  consumed  mostly by  vehicle  owners, there is no reason why it cannot do the same for  electricity  and its  distributors especially as  power is the engine of  growth and prosperity  in any economy  and its dividends  and benefits  when available in affordable  prices and proportions are the real and steady path to sustainable  and meaningful economic development.

     

    • Engineer Mohammadu Bagudu

    Kaduna.

  • Power sector blues

    Power sector blues

    •Stakeholders must be guided by public interest at all times

    Last week, protesters under the aegis of the Citizen Access to Electricity Initiative (CAEI), in conjunction with the Nigeria Labour Congress (NLC), took to Lagos streets to decry the abysmal service delivery of Ikeja Electricity Distribution Company (IKEDC)). The organisers also identified “indiscriminate sacking of over 400 workers without any reason” as one of the reasons behind their protest.

    Alarmed by the potentially disruptive effect of the protests on their operations, the company went to court seeking to restrain “the National Union of Electricity Employees (NUEE), Senior Staff Association of Electricity and Allied Companies (SSAEAC), Nigeria Labour Congress (NLC), their agents, officers, privies, representatives or otherwise, whether acting of their own accords or in concert with other bodies, persons or unions, from disrupting or shutting down the operations of the company or barricading the entry and exit points of her corporate headquarters… or any other premises or location where the company carries out commercial and (or) technical operations”.

    Also on Wednesday last week, Transmission Company of Nigeria locked out workers from its headquarters in Abuja over outstanding issues relating to severance payment for some workers of the defunct Power Holding Company of Nigeria (PHCN).

    For a sector already hobbled by operational and other logistical challenges, there seems to be no end in sight to the many crises facing the sector. In February, it was a storm over the new electricity tariff structure proposed by the Nigerian Electricity Regulatory Commission under the Multi Year Tariff Order, MYTO. This was at a time of worsening power supply and in the background of the continuing failure of the Discos to issue electricity consumers with meters. The angst provoked by that move had barely quietened down when the grid experienced total shutdown – twice within a fortnight – from an alleged sabotage of gas infrastructure.

    Last week’s street protests would appear to have marked a new phase in the struggle to address the worsening crisis and to get the Discos to address consumer concerns.

    Nearly three years after the take-over of the entities of the erstwhile PHCN by the private sector, Nigerians are about now wondering how much worse things would have to get before they get better – or whether they ever will.

    As it is, the same vices – of corruption and extremely poor service delivery which took the sector to the nadir, and which necessitated the privatisation, appears to have metastasised into new malignant forms, hence the current tragedy of the greater majority of electricity consumers continuing to pay premium for services not delivered.

    More than that, far from delivering on their promise to attract new investments, revamp and upgrade the inherited infrastructure and modernise operations, the operators have demonstrated neither the financial muscle nor the technical/managerial capability to inspire confidence in their ability to turn things around.

    Unfortunately, while the constant threat of eruptions over unresolved labour issues would ordinarily appear normal, given that the industry is currently in the throes of transition, that these have come at the pains of sabotage and overt threats to the system would suggest that something more fundamental is amiss.

    We must state that nothing would be achieved by constant threats of sabotage and disruptions to the operations of the electricity companies. Both would most certainly injure public cause and set the industry back. Yes, the electricity consumer deserves far better than currently served. Surely, they deserve more than the anaemic operators foisted on them.

    As for the workers, they deserve fair and equitable settlements in the spirit of collective bargaining and to the extent permissible by the law.

    Yet, we are constrained to restate that the parties should be guided by public interest at all times just as the nation’s collective interest should override every other consideration.

    In summary, the parties are admonished to refrain from acts capable of further aggravating the current crisis.

  • How to solve power sector problems, by NLNG chief

    How to solve power sector problems, by NLNG chief

    Nigeria should adopt an all-inclusive approach to solve the myriad of problems of the power sector, the Managing Director/Chief Executive officer, Nigeria Liquefied Natural Gas Limited (NLNG), Mr. Babs Omotowa, has said.

    He said gas-to-power has become a problem in the industry, urging stakeholders, including the Federal Government, to proffer solution to problems in generation, transmission and distribution of electricity.

    He canvassed the exploration of opportunities in the grid and off-grid systems of power generation and also leverage on the strengths of the six geo-political zones through their resources, such as coal, wind, solar, water and gas, among others, to improve power supply.

    Omotowa said the country needed a holistic approach to solve its energy problems since it has tried various methods in the past, without success.

    He said: “A more comprehensive approach to resolving problems in the power sector is what Nigeria needs at this moment. There is the need to look at the energy strengths of each of the geo-political zones for growth.  For instance, states such as Benue, Kogi, Plateau, and others within the Middle Belt zone rely on hydro power, and should be allowed to use hydro power sufficiently.

    “The Eastern part of Nigeria should rely on coal because of the abundant coal deposit in the area, to solve the energy needs of that zone. The Southern part of the country especially the South-south should rely on gas, which means that turbines would operate optimally in that area, once there is gas infrastructure. A lot of the demands for gas are in the South-western part of the country, especially Lagos and Ogun axis. They have thermal plants and some of these plants are operating sub-optimally due to lack of gas. The power plants should be linked to gas pipelines to power the turbines. There are huge but unexplored opportunities in the country.”

    Omotowa urged stakeholders to give more attention to issues such as citing of power plants where gas facilities are, and the evacuation of electricity generated from the plants to the grid, adding that they are crucial to the growth of the sector.

    According to him, it is one thing to build power plants side by side with gas facilities, it is another thing for the plant to have capacity to take or evacuate the power generated to the grid citing Afam VI as an example.

    He said: “Afam power plant, for example, is cited close to a gas facility and today it generates 650 megawatts (Mw) of electricity. However, the grid cannot take all the megawatts of electricity generated by Afam. May be the grid takes about 300Mw or thereabout. Alaoji is another one power plant with similar problems. Having considered all the issues listed above, it is safer to conclude that an all embracing approach is what Nigeria needs to solve its energy problems.”

    He said the need to provide facilities that would help in evacuating electricity to the grid for onward distribution to customers is imperative for the growth of the sector.

    The industry is battling shortage of gas, poor power generation and distribution. This has resulted in poor supply of electricity.  To resolve the problems, the Federal Government embarked on upward review of gas price to ensure competitiveness, ensures effective policing of gas pipelines to forestall vandalism,among other initiatives. However, the problems persist.

  • Fed Govt, stakeholders parley on power sector debts

    •MDAs debts hit N60b

    The Federal Government has begun talks
    with players in the power sector value chain (generation, transmission, distribution and regulatory bodies) on how to find ways of paying the huge arrears of unpaid electricity bills owed by Federal Ministries, Departments and Agencies (MDAs) put at N60 billion, The Nation has learnt.

    The Executive Director, Research and Advocacy, Association of Nigerian Electricity Distributors (ANED), Sunday Oduntan, stated this when he spoke with The Nation on the 2016 budgetary allocation to the Ministry of Power, Works and Housing.

    Oduntan said he could not measure the impact of the budget on the power sector until it is broken down and Nigerians know how much goes to the power sector.

    He however said that whatever allocation that is due to  the power sector would be for the transmission segment of the value chain because other segments are private sector owned and controlled.

    He said: “The budget is not broken down so I wouldn’t be able to assess how it would impact the electricity power sector. But remember that among the value chain, government needs only to fund the transmission. Actually what we need from the government is conducive policies and environment, encouragement of direct foreign investment into the power sector.

    “The government should also encourage investors in the sector, ensure steady and adequate supply of gas to power generation stations because if the power stations generate more power, the distribution companies will have more power to distribute. What Nigerians need is let there be light.”

    He said whatever is allocated to the power sector may not matter much, saying what matters is, “let the allocation be judiciously utilised. What matters now is let every stakeholder do what is supposed to be done.”

    On the MDAs’ debt, Oduntan said, it was N58 billion at the end of last year. It has gone up to N60 billion now, but he did not disclose the details of the ongoing discussion with the government on the issue.

    “Negotiations are ongoing because the debt is for the entire value chain and each segment of the chain needs funds for effective performance. They (government) are on it. They are working on it that is all I will tell you,” he stated.