Electricity Generation Companies (GenCos ) have said although they have increased their generation capacity to 8,145Mega Watts (Mw) in 2020, they only produce 3,987mw for Nigeria. Owing to constraints in the national grid capacity, 4,159mw has been left stranded.
The GenCos under the umbrella of the Asociation of Power Generation Companies (APGC) highlighted the remedies for improved performance of the Nigerian Electricity Supply Industry (NESI) to include the unbundling of the Transmission Company of Nigeria (TCN).
Their explanation of the state of the power sector came on the heels of the Senate’s call for a reversal of the privatisation of the power sector.
On capacity and stranded power, the GenCos said: “Part of the obligations imposed on the owners of the GenCos at the point of privatization, was meeting of a minimum performance target (MPT) of 5,000MW set by the Federal Government of Nigeria (through BPE) for the GenCos.
“Each GenCo was mandated to increase the generation capacity of its plant to a threshold set by the FGN within 5 years. The penalty for not meeting the MPT was a possible takeover of any defaulting GenCo by the FGN.
“Notwithstanding the non-payment of GenCos’ invoices for power supplied to the national grid, the GenCos took loans and other credit facilities to fund the capital expenditure required to meet the MPT by ramping up capacity.
“It is very important to stress that The GenCos have doubled their available capacities from 4,214MW at takeover in 2013 to 8,145MW in 2020. Out of the 8,145MW available capacity, only 3,987MW is generated for Nigerians. The balance 4,159MW is stranded as a result of constraints in the national grid capacity.”
APGC added the maximum capacity attained by the national grid ever is 5,375 MW as opposed to the current overall average available capacity 8,589 MW and installed capacity of 13,427 MW with an expansion capacity of 20,000MW in an enabling environment.
The association submitted that “Average stranded capacity that could have been made available to Nigerians in the light of maximum attained grid capacity is an average of 3,214MW.
“This implies that if we had a grid capacity that matches our average available capacity, 3,214 MW can be immediately made available to Nigerians with the current state of operations of the GENCOS and at no additional cost.”
Suggesting solutions to the challenges in the electricity market, the GenCos sought the urgent review of the Electric Power Sector Reforms Act (EPSRA), the Multi-Year Tariff Order, Orders made by NERC so far, Policies, Market Rule and other governance document in the NESI.
It urged the Federal Government to conduct a viable and independent stress test on the Generation, Distribution and Transmission capacities to enable it to plan proactively and build the sector.
It sought the “Immediate separation and unbundling of the Independent System Operator (ISO) and Transmission Service Provider (TSP) from the existing Transmission Company of Nigeria (TCN) to drive efficiency in the wheeling and allocation of power.”
The GenCos asked for the provision of local/foreign guarantees (backed by World Bank/AFDB) to enhance guaranteed payment plans for GenCos to enable them to improve generation and implement expansion plans (for power growth).
