Power Grid Falls To 3,530 MW As Countrywide Rationing Continues
Gas suppliers have so far refused government entreaties to increase supply to power plants citing a debt.
Power supplies across the nation remained unreliable over the weekend due to issues with the financial outlook and gas supply, as federal government efforts to enhance national grid supply were ineffective.
According to the Independent System Operator's national grid data, as of yesterday at 3 p.m., only 16 of the country's power plants were producing 3,530.33 Mega Watts of electricity for the grid, with Egbin Power, the largest power plant in Nigeria, completely off the grid.
The largest generators were Shiroro Hydro (275.73MW), Kainji Hydro (415MW), and Azura- Edo IPP (420MW).
Gas suppliers have so far rejected government requests to expand supplies to power plants, claiming they owe the government more than $1.3 billion for previous deliveries.
The Nigerian Electricity Supply Industry, or NESI, was to receive electricity subsidies totaling N1.6 trillion from the government in 2024; however, only N450 billion had been budgeted for this purpose.
The industry's liquidity problem was made worse last week when Chief Adebayo Adelabu, the Minister of Power, confirmed that no payment had been made for the month of January.
The Minister mentioned, “The persistent liquidity issues coming from inappropriate tariff regime, poor collections and inadequate funding of government subsidies leading to huge debts owed to the transmission, generation and gas supply companies.
“This has restricted investments required for sustaining supply flow, capacity expansion and infrastructural improvements. It has also not only discouraged lending to the sector by financial institutions as the sectoral activities are not bankable, but has also made the sector unattractive to new investors.”
The “settlement of existing sectoral outstanding debt obligations to the gas supply and power generation companies using partly cash payment and guaranteed debt instruments” is one of the solutions being considered by the government, he continued. There are $1.3 billion in legacy debts owed to the GenCos in addition to the N1.3 trillion in current debt.
Electricity distribution companies, or DisCos, moved to appease customers after the supply fell, promising them better services in the near future.
In a statement, the Abuja Electricity Distribution Company, or AEDC, said: “We would like to inform you that we are aware of the unstable power supply experienced in recent times essentially caused by insufficient power allocation to us.
“This has constrained us to implement load curtailment directives across our franchise to manage the situation for grid stability. This will involve occasional temporary interruption of power supply to certain areas for a limited period. We understand the inconvenience this may cause and sincerely apologize for this disruption. We are working diligently to minimize the impact of these outages.”
Customers were also notified by Ibadan Electricity Distribution Company, or IBEDC, that “the current drop in electricity supply is due to generation shortfall as a result of gas shortage to the generating companies.”
“We are working with stakeholders in the electricity value chain on a sustainable resolution. We sincerely apologize for the inconvenience and appeal for your understanding,” it added.
The European Union has announced plans to invest 37 million euros in the power industry in the interim. It stated that since 2008, the sector has received grants totaling more than $200 million.
When he visited Chief Adebayo Adelabu, the Minister of Power, the EU Ambassador to Nigeria, Samuela Isopi, revealed that the funds would go toward small hydro power, solar energy for medical facilities, rural electrification through connected and isolated mini-grid projects, and projects promoting the circular economy in the power industry.
Chief Adelabu responded by stating that the government is attempting to address the liquidity issue as the primary issue facing the sector and that a cost-reflective tariff is a prerequisite for the market to be sustainable and function well.
He acknowledged that the EU projects are in line with the Ministry's sector strategy, but he still thanked the EU for its support of the industry. In the new act, he committed to cooperating with the EU on their programs, particularly those pertaining to small hydro and state electrification.
No comments:
Leave comment here