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We are being owed N1.75trn – GenCos

Dr Joy Ogaji, Executive Secretary, Association of Power Generation Companies (APGC) on Thursday said generation companies were being owed about N1.75 trillion for power generated for the electricity market since 2013.

Ogaji spoke during a panel session at the

Association of Energy Correspondents of Nigeria (NAEC) Strategic International Conference in Lagos.

The topic of the  session was: ” Power Sector Dilemma: Issues, Challenges, Opportunities and Strategic Key Solutions.”

She said the liquidity challenge of the Nigerian Electricity Supply Industry had made operating in the generation value chain very difficult for the companies.

Ogaji said GenCos were currently owing their gas suppliers about N1 trillion and also servicing loans used for acquisition of the companies in 2013.

She said the Nigerian Bulk Electricity Trading Company (NBET) needs to intensify efforts to ensure remittances by the 11 electricity Distribution Companies for energy consumed by their customers.

Ogaji said GenCos were ready to generate the power needed in Nigeria, but utilisation had been stagnated in the country for a long time due to transmission and distribution constraints.

“Just to give you a context, on Nov.1, 2013 when the privatisation took place, power was 3,427MW on the day of takeover.

“On Dec. 1, 2013, power had

gone from 3,427MW to over 4,003MW and by 2020 it had gone up to nearly 8,000MW,” she said.

Ogaji said, however, that the average uptake of power from the GenCos was about 4,000MWh from 2013 till date which was not good for business.

“So, this does not encourage any investor to keep investing because clearly it shows that your product is not needed.

“Notwithstanding how Nigerians are always saying give us power, but generation production is driven by demand.

“When demand is not  moving in line with the production, the producer is not incentivised to produce and this is a major problem,”she said.

Ogaji also decried lack of access to foreign exchange by GenCos which had become a major  challenge to their operations in recent times.

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Gencos bemoans erratic  power supply, calls for roundtable

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The Electricity Power Generation Companies (GenCos) have called on stakeholders in the power sector to come together to resolve the current erratic supply instead of blame game.

Mrs Joy Ogaji, the Executive Secretary, Association of Power Generation Companies (APGC) said this at a news conference in Abuja on Sunday.

Ogaji said to ensure electricity sustainability in the country, stakeholders in the sector must address the root causes of the current erratic power supply and not the symptoms.

“Let us fix the power sector, instead of the blame game. We want to sit with government and look at the issues and come up with  solutions that will improve electricity supply.

“As a matter of urgency, we want to have a sit-down with government, if we want sustainability of power in the market.

“We are also calling on the various agencies in the power sector to call the GenCos to a room, we are tired of crying on the pages of newspapers before we can be heard ’’she said.

According to Ogaji, the current state of the national grid must be addressed in order to stop denying Nigerians their legitimate expectation of unhindered and reliable electricity supply.

She also disclosed that the poor management of the grid had affected the performance of the GenCos and damaged some units of their infrastructure.

Specifically, she said they engaged the services of an expert the previous year to look into the problem and the expert discovered  that the machines were not operating optimally.

Ogaji said GenCos could generate 8000 megawatts – 9000 Megawatts  of electricity if the power sector could get things right.

The Executive Secretary also disclosed that load rejection had been a major problem affecting their performance.

“As at now we are generating an average of  4000MW and above ,  we hope to generate more,” she said

Ogaji said that GenCos had consistently demonstrated their commitment to Nigeria, Nigerians, and the power sector.

“We have continued to make huge sacrifices and bear inestimable losses in our bid to see to a virile and thriving power sector that will benefit all and sundry.

“ We reaffirm our commitment to work with all stakeholders to fix the power sector. If we get the Nigerian Electricity Supply Industry right, we will get the Nigerian economy right, ‘’ she said.

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NLC quarrels over Nigeria’s plan to cut price of industry gas

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 The Nigeria Labour Congress (NLC) yesterday said  Federal Government’s plan to reduce the price of industry power gas from $2.50 to $2.18.

The labour body said the move was a flagrant repudiation of the  agreement between it and the government. It said the proposal fell far short below expectation.

A seven – man Sub- committee on electricity tariff set up last year in its report recommended the reduction of gas sold to generating companies (GenCos) to $1.50.

Government representatives at the meeting “unanimously accepted” that the current practice of gas pricing in US dollars would be discontinued to enable gas supply to GenCos to be made payable in Naira.

The recommendation was adopted at a meeting in February this year with Minister of Labour and Employment, Dr. Chris Ngige stating that: “Nigerians will witness a reduction in the cost of electricity tariff” with the reduction in gas pricing.

However, Minister of State for Petroleum Resources, Timipre Sylva, at the 2021 Gas Stakeholders Forum in Kano said the Federal Government had approved the reduction of domestic gas prices for electricity generation from $2.50 to $2.18 per standard cubic feet (SCF).

Responding to the minister’s comments, President of the NLC, Ayuba Wabba, asked the Federal Government to reduce the pricing of domestic gas supply to GENCOs to less than $1.50 per standard cubic feet (SCF).

The NLC also asked the Federal Government to respect the agreement it reached with Labour on electricity tariff.

According to the Congress, the resolutions of the Principals (government representatives) “cannot certainly be the basis for the minuscule gas price reduction announced by Minister Timipre Sylva.”

The statement said: “Consequently, Congress demands of the Federal Government to reduce the pricing of domestic gas supply to GENCOs to less than $1.50 per SCF. We also demand that payment for gas by GENCOs should be denominated in Naira.

“Congress remains implacably committed to the ultimate reduction of electricity tariffs by N15 per kilowatt-hour by December 2021 as contained in the agreement. Congress hereby serves notice that the posture of the Federal Government to flout agreements is completely unacceptable and would be resisted.”

The NLC demanded the inclusion of Gas Companies in the Central Bank of Nigeria (CBN) and Nigerian Electricity Service Industry (NESI) payment waterfall to guarantee payments for gas and contract sanctity with GENCOs.

The NLC argued that the pricing of domestic gas for GENCOs in US dollars represented the “quintessence of underdevelopment of Nigeria’s energy sector.”

The statement added: “Therefore, the dollarisation of domestic gas supply to local power generating companies similarly feeds neatly into the debate of the commodification of the indigenous resources to forcibly incorporate the developing countries into spawned dependency.

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Only 25 of 160 licensed GenCos operating in Nigeria

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Dr Joy Ogaji, Executive Secretary, Association of Power Generation Companies (APGC), says only 25 out of 160 GenCos licensed by the Nigerian Electricity Regulatory Commission ( NERC) are currently operating in Nigeria.
Ogaji made the disclosure during a panel session at the ongoing Nigeria Oil and Gas (NOG) Conference and Exhibition on Wednesday in Abuja.
She noted that data from the National Control Centre, Osogbo, showed that Nigeria’s energy demand was about 28,000MW while the current available power was about 6,000MW.
“NERC has issued 160 licences to power generation companies. Only 25 are operational currently.
“The other thermal stations are waiting on the sidelines and if they are actively involved, we can generate an additional 30,000MW.
“The 25 operational GenCos have an installed capacity of about 13,000MW,” Ogaji said.
She, however, disclosed that current available capacity had dropped from about 9,000MW in 2020 to about 6,000MW.
According to her, this is not being optimally utilised due to load rejection by electricity Distribution Companies for various reasons.
Ogaji noted that the three hydro power plants — Kainji, Jebba and Shiroro — with an installed capacity of 1,500MW were also not being optimally utilised.
She said the take-off of the African Continental Free Trade Agreement had made it imperative for Nigeria to fix its power sector to make its companies able to compete with their counterparts across the continent.
Ogaji described gas supply constraints as one of the major challenges facing GenCos and responsible for the drop in power generation.
She said that this could be remedied by the Nigerian National Petroleum Corporation agreeing to supply 60 per cent of the gas needed by the GenCos.
Ogaji said the move would enable the sector to achieve its vision of generating 30,000MW by 2030, with 3,000MW coming from renewables and 27,000MW from the power plants.