NERC: Gas Pipelines Vandalism, Not Non-Payment Of GenCos, Responsible For Worsening Power Supply

The NERC yesterday stated that the worsening power situation in the country was caused mainly by the vandalism of the country’s gas supply assets.

Chairman of the commission, Sanusi Garba, who gave an update when he spoke with journalists in Abuja, noted that the country lost at least 1,000 megawatts to the challenge.

The NERC boss also dismissed the position expounded by Executive Secretary of the Association of Power Generation Companies (APGC), Dr. Joy Ogaji, that the Gencos were unable to make more power available because they were owed N1.64 trillion.

Garba stated that although the Gencos were owed legacy debts, that had nothing to do with their current operations, maintaining that if at all there has been temporary delays in payment in the normal course of business, it shouldn’t lead to the generators stopping business for any reason.

Furthermore, Garba noted that whereas the thermal plants, which supplied 80 per cent of the country’s electricity, was supposed to buffer the fall in generation from the hydro plants, due to water management issues, they had not been able to do so this year, due to the inability of gas companies to supply gas.

Flanked by his deputies, Garba acknowledged that the amount of power being enjoyed by electricity consumers in the last two to three months had dipped considerably, as supply dropped from about 5,300mw in October 2021, to about 4,350megawatts in March.

He stated, “Now, obviously, looking at the level of generation, 1,000 megawatts is a lot and this has consequently impacted on supply to many consumers and, in particular, those who are living in Abuja.

“Just for clarification, in October 2021, the hydros were doing about 1,350 megawatts, now they are doing about 1,100. But that’s not enough to clearly explain why there are so much outages across the country.

“The reality is that normally at this time of year, when generation in the hydro plants are down, the gas plants, which currently contribute about 80 per cent of the generation capacity, will ramp up to cover the shortfall in generation of hydros.

“Unfortunately, at this time of the year when the gas plants are supposed to improve generation, we have had a number of multiple events that contributed to their lack of capacity to deliver on the shortfall of generation.”

Starting from the Okpai plant, owned by Agip and the Nigerian National Petroleum Company (NNPC), the chairman stated that the pipelines were disrupted in obvious acts of vandalism, which further affected generation in the plants.

He noted that there were issues with the gas-powered plant in Calabar with generation capacity of about 500 megawatts owned by the Niger Delta Power Holding Company (NDPHC).

Added to that, Garba noted that the Afam 6, owned by Shell, had supply issues from Okolobo plant, which required some refurbishment, explaining that the multiplicity of events, “presented a perfect storm for the industry.”

He said, “But I want to say that on a positive note, all hands are on deck to remedy the situation with gas supply being restored to the Okpai plant and because there is also another plant that has just been completed on the same side. We recently had a meeting to discuss how that can also be brought on board to cover the shortfall in generation.

“The Okpai plant that has gas challenge from the Okolobo gas processing plant, we had a meeting two days ago to see how NNPC and Shell can expedite the repair of the gas plant so that the plant can also combine to cover generation.

“So we also have the Niger Delta power plants. The federal government has invested in 10 new power plants of which eight are in operation; most of them affected have gas shortages because they haven’t contracted officially for gas.

“Now, the discussion we have had in the last 24 hours has been for the Nigerian gas market and company to now contract for gas for those clients, so that they can also compulsorily not only restore our generation capacity, but also exceed what we’ve been doing.”

He explained that by March 21, what was being done would have materialised to produce “very firm generation capacity.”

Asked to react to a comment by Minister of Finance, Zainab Ahmed, that subsidy had been fully halted in the electricity sector, he confirmed that in the past four or five years, the level of subsidy had gradually been reduced, but did not say whether it had now completely stopped.

He said, “All of you can understand that you cannot run the electricity market on life support and a situation that investors will not get the kind of return on investment until government steps in to provide the required funding itself.

“The subsidies have been, at one time, as high as N600 billion a year and gradually coming down, I think about N30 billion this year.”

On the Gencos debt allegation, Garba said, “There were debts that were being owed Gencos called legacy debts. It was a historical liability that is backed by the Nigerian Electricity Liability Management Company (NELMCO).

“Occasionally, there may be delays, one, two weeks, three weeks and so on. But in the course of an ongoing business, you wouldn’t say that’s the reason you cannot perform or that’s the reason why this thing is killing my business.”

The vice chairman of NERC, Musiliu Oseni, attributed the power problem to a problem with the Benin axis, saying a panel has been set up to resolve all the outstanding issues.

Oseni said, “Currently, there is an investigative team that has been set up and the commission is currently awaiting the final report of the team. The cause was the snap on that 330 kV line in the Benin axis, which cascaded into loss of 440 megawatts from Ughelli plants.

“And when you have such an event, where you lost 440 megawatts immediately, we have constrained generation availability, so that could cause imbalances in the system that can immediately cascade into total collapse.

“So the team is currently working to unravel both the immediate cause of the events and the commission is expecting the reports from TCN and in line with the grid code.”