Power Podcast Prospects for Sub-franchising in the DisCos: What Next? by Aisi Atiti November 29, 2022 Published by Aisi Atiti The growing urbanisation in the country requires distribution companies (DisCos) to improve power supply to be able to service end-user customers. This episode of the Nextier Power Podcast features Abigail Botsha, the Head of Marketing and Business Development at GVE Projects Limited. Ms. Botsha joins us to explore some of the prospects for sub-franchising in the DisCos DisCos. November 29, 2022 0 comments 0 FacebookTwitterPinterestEmail
LADIES Energising Education to Brighten the Future by Aisi Atiti November 18, 2022 Published by Aisi Atiti One of the most important ways of securing and building a favourable future for any nation is investing in the education of the youths. However, energy access and the lack of it plays a huge role in the educational sector. This week’s guest is Funmi Jones, the component lead of Phase 3 of the Energising Education Programme (EEP) under the Nigeria Electrification Project (NEP). Ms Jones highlights the objectives of the EEP and the programme’s provisions to scale up gender inclusion. November 18, 2022 0 comments 0 FacebookTwitterPinterestEmail
Power Podcast The National Grid: Divided we shine? by Aisi Atiti August 22, 2022 Published by Aisi Atiti On this episode of the power podcast series, our guest is Engr. Stephen Olumuyiwa, Transmissions Advisor, Niger Delta Power Holding Company (NDPHC). Engr. Stephen joins us to explore some challenges impeding electricity supply and the effects of disaggregating the national grid on the Nigerian electricity market. August 22, 2022 1 comment 0 FacebookTwitterPinterestEmail
Power Punch The Senate’s Bill to Improve Power Supply by Aisi Atiti July 28, 2022 Published by Aisi Atiti The Nigerian Senate recently passed a bill to improve the power supply to electricity consumers in the country. The Electricity Bill 2022 is a follow-up to the report of the Senate Committee on Power. It aims to enable a legal and institutional framework that maximally harnesses the sector’s privatisation. The partial privatisation of the electricity sector in 2013 led to the creation of six generation companies (GenCos), 11 distribution companies (DisCos) and the government-run Transmission Company of Nigeria (TCN). Although the introduction of the private sector intended to improve investment and efficiency in the electricity industry, the sector is plagued with many challenges today. The GenCos, DisCos, and the TCN face their respective bottlenecks that impede electricity supply to customers and the sector’s growth. These challenges include unavailable gas supply, poor network infrastructure and Aggregate Technical, Commercial and Collection (ATC&C) losses. However, one of the most pressing concerns is the inability of the transmission and distribution sub-sectors to wheel and distribute generated electricity to customers. The GenCos revealed in a 2021 fact sheet that despite the average power generation capacity being 6,336.52MW every month, the capacity put on the grid averaged at 4,118.98MW. This totalled 26,976MW of stranded power in 2021. However, the Senate’s Electricity Bill to improve power supply aims to reduce the stranded power in the sector. According to Gabriel Suswam, Chairman Senate Committee on Power, the bill would improve the use of generated power through investments when passed into law. He added that the bill would encourage policies and regulations that enable the transmission network’s expansion and address the industry’s technological limitations. However, the bill to improve power supply would not be the first intervention in the electricity sector. In fact, the industry has received over ₦2 trillion in investments post-privatisation. One of these investments is the most recent Central Bank of Nigeria (CBN) intervention of $250 million (₦103 billion) to improve the rehabilitation of transmission and distribution infrastructure. In addition, there is also the CBN-funded Nigerian Electricity Market Stabilisation Facility (NEMSF) of ₦213 billion, among other interventions. The apparent failures of past intervention programmes in Nigeria’s electricity sector have led to stakeholders’ opinions. As a result, some stakeholders have suggested that the privatisation process be reversed as the challenges continue to affect electricity customers in terms of poor electricity supply, tariff hikes and the increased cost of running alternate power generation sources. According to Comrade Hassan Sunmonu, the Pioneer President of the Nigeria Labour Congress (NLC), “Even with the privatisation, the government is still spending public funds on the sector. If not, the whole country would have been in total darkness by now. I’m 100 per cent in support of the government reviewing the privatised power sector.” So, if these past interventions have failed to increase the sector’s efficiency, what assurances are there that the Electricity Bill to improve power supply would be beneficial? What frameworks would ensure the monitoring of investments to develop the electricity network infrastructure? And how can electricity customers in the country be convinced that this isn’t another inconsequential move to improve the Nigeria Electricity Supply Industry (NESI)? July 28, 2022 1 comment 0 FacebookTwitterPinterestEmail
Power Punch State of the NESI: DisCos Being Restructured for Unpaid Loans by Aisi Atiti July 7, 2022 Published by Aisi Atiti The partial privatisation of the Nigerian power sector in 2013 led to the development of six Generation Companies (GenCos), eleven Distribution Companies (DisCos) and the government-run Transmission Company of Nigeria (TCN). Although the unbundling aimed to create a competitive electricity market for the Nigerian Electricity Supply Industry (NESI), that is not the case today. The current state of the NESI is DisCos being restructured for unpaid loans. The federal government recently announced that five (5) distribution companies would be reformed due to the inability to repay loans borrowed during 2013 unbundling. The affected DisCos are Benin Electricity Distribution Company (BEDC), Ibadan Electricity Distribution Company (IBEDC), Port Harcourt Electricity Distribution Company (PHEDC), Kaduna Electric and Kano Electricity Distribution Company (KEDCO). The announcement was made by the Executive Chairman of the Nigeria Electricity Regulatory Commission (NERC), Sanusi Garba, and the Director-General of the Bureau of Public Enterprises (BPE), Alex Okoh. They both stated that the move to reform the DisCos was necessary after Fidelity Bank activated the call on the collateralised shares of BEDC, Kaduna Electric and KEDCO. According to the statement, the bank made the activation due to the DisCos’ inabilities to repay loans used in acquiring assets for privatisation. This current state of the NESI involving DisCos being restructured for unpaid loans has a lot of intricacies. NERC and BPE have approved the list of new board members for the DisCos provided by the bank. BEDC: KC Akuma (Chairman), Adeola Ijose (Member), Charles Onwera (Member).Kaduna Electric: Abbas Jega (Chairman), Ameenu Abubakar (Member), Marlene Ngoyi (Member).KEDCO: Hasan Tukur (Chairman), Nelson Ahaneku (Member), Engr. Rabiu Suleiman (Member).IBEDC: Ahmed Kuru (Chairman), Eberechukwu Uneze (Member), Aminu Ismail (Member). However, to protect the government’s 40 per cent (%) interest in the DisCos, the BPE has also nominated Yomi Adeyemi (BEDC), Umar Abdullahi (Kaduna Electric) and Bashir Gwandu (KEDCO) and Oluwaseyi Akinwale (IBEDC). In addition, NERC and the BPE have appointed managing directors to ensure the process of business continuity for the DisCos: Henry Ajagbawa (BEDC), Yusuf Usman Yahaya (Kaduna Electric) and Ahmad Dangana (KEDCO). According to the statement: Lastly, we are restructuring the Management and Board of Port Harcourt DISCO to forestall the imminent insolvency of the entity. As a condition for support to the entity to meet its market obligations, Iboroma Akpana will take over as the Chairman of the Board. Emmanuel Okotete, Eyo Ekpo, Ismaila Shuaibu and the DG of BPE will form the interim Board. Mr Benson Uwheru will take over as the Managing Director of PHEDC as part of the changes. The current state of the NESI involving DisCos being restructured for unpaid loans was not the envisaged vision post-privatisation. As a result, experts have urged for the power sector’s privatisation to be reversed. In a statement, Kunle Olubiyo, President of Nigeria Consumer Protection Network, said: It is either the Federal Government do a mid-term review of the privatisation process or total reversal of the privatisation. We did not get it right… Mr Olubiyo added that the government has spent more on the sector post-privatisation than on the defunct National Electric Power Authority (NEPA) and Power Holding Company of Nigeria (PHCN). Privatising the power sector was supposed to yield increased generation and efficiency and attract private investment; however, DisCos being restructured for unpaid debts proves otherwise. July 7, 2022 1 comment 0 FacebookTwitterPinterestEmail
Power Punch The Connection Between Generated Power and Electricity Consumers by Aisi Atiti July 5, 2022 Published by Aisi Atiti The worsening state of the power sector in Nigeria has led to electricity customers in the country enduring five grid collapses this year. The country’s peak generation capacity has been hovering around 3,000 MW, drastically inadequate to meet the demand. However, if the generation capacity improves, what assurances are there that the Transmission Company of Nigeria (TCN) can be the connection between generated power and electricity consumers. Recently, the Generation Companies (GenCos) pushed against the activation of a Power Purchase Agreement (PPA) by the Nigeria Electricity Regulatory Commission (NERC). The PPA required the minimum generation capacity to be 5,000 MW. The GenCos gave reasons why this would not be possible, including gas supply challenges and existing debt owed to them. The GenCos stated that for a minimum of 5,000 MW generation capacity to be achievable, gas supply must first be guaranteed. Also, the generation companies mentioned payment shortfalls to them as another factor inhibiting the success of the PPA. For example, in 2019, data from NERC showed that the market shortfall was ₦496.65 billion. While GenCos invoiced ₦675 billion to the Nigeria Bulk Electricity Trading Plc (NBET), only ₦174.3 billion was paid. However, if the GenCos do begin to produce 5,000 MW, what challenges would hinder the connection between generated power and electricity consumers? The TCN’s responsibilities include developing a transmission grid to evacuate all generated power among its many activities. However, even with the current generation capacity, the TCN responsible for channelling electricity to Distribution Companies (DisCos) faces many challenges. These challenges include inadequate infrastructure, the vandalisation of available infrastructure, and the lack of operation management and data sharing systems. The lack of adequate infrastructure and the vandalisation of existing infrastructure is the most pressing of the TCN’s problems. A major factor in unelectrified areas in the country is the lack of infrastructure such as transmission lines. And often, when transmission infrastructure is vandalised, the TCN cannot apprehend the criminals due to a lack of surveillance technology. This vandalism disrupts the electricity supply to consumers. The lack of investment in transmission infrastructure interrupts the connection between generated power and electricity consumers. In April, the Federal Executive Council (FEC) approved ₦1.4 billion to support the development and purchase of TCN infrastructure and equipment to improve power supply to customers. According to the Minister of Power, the funding will help the TCN build KV lines in substations and provide handling equipment and operational vehicles. It is important that while efforts are being made to increase the country’s generation capacity, investments should be put towards improving the transmission link. Proper investment in the TCN, among other benefits, would prevent electricity wastage and strengthen the connection chain between power generated and electricity consumers. July 5, 2022 1 comment 0 FacebookTwitterPinterestEmail
Power Punch NERC’s PPA Order: Achievable or not? by Aisi Atiti June 28, 2022 Published by Aisi Atiti Today, the electricity supply in Nigeria continues to worsen, and stakeholders in the Nigerian Electricity Supply Industry (NESI) have their own opinions on ways to improve the situation. The most recent of these ways is the Nigeria Electricity Regulatory Commission’s (NERC) move to activate a new Power Purchase Agreement (PPA). However, there are concerns about whether NERC’s PPA order is achievable or not. According to the letter sent to one of the Generation Companies (GenCos) by the NERC secretary, Ada Ozoemena, the PPA is expected to be activated today between the Nigerian Bulk Trading Plc. (NBET) and the GenCos. The Power Purchase Agreement conditions GenCos to produce a minimum of 5,000 MW (5 GW) to improve the country’s electricity supply situation. However, Generation Companies have come up with reasons why the order would not be achievable. GenCos have stated that to produce 5,000 MW, firstly, gas supply must be guaranteed. Gas availability has for long been a hindrance to electricity production in Nigeria. According to the National Control Centre, post-privatisation, the thermal GenCos have only gotten about 13 per cent of the 28,000 MW of gas equivalent required for electricity generation. Despite the federal government’s (FG) attempt to address the gas supply challenge to GenCos, it is still a huge factor contributing to the poor generation capacity. And this is a factor in determining whether NERC’s PPA order is achievable. GenCos have also mentioned that they are still owed about 1.64 trillion nairas from the previous agreement. They stated that discrepancies in the previous agreement led to the federal government paying 701 billion nairas to the gas suppliers, but the rest is on their account. Again, it was further agreed under clause 13.4.1 of the Agreement that: ‘for each billing period during the delivery term, seller shall invoice buyer for the capacity payment, energy payment, take or pay payment, and start-up cost payable to seller for such billing period upon receipt of the final settlement statement from the market operator following the applicable billing period.’ The payment shown in such invoice as due to seller shall be paid by buyer on or before the 15th business day following the day the invoice is delivered to sector whether buyer disputes the invoiced amount. Despite the GenCos’ claims, the NBET insists that payment was made to the generators when due. She stated: To put in context, NBET makes payment to GenCos as and when due, and has never defaulted on any payment cycle till date. Furthermore, the percentage payment made to GenCos has continually been on the increase, with the N701.9 billion PAF payment, which ensured a minimum of 80 per cent of GenCos invoices for 2018 and 2019, as well as the second PAF of N600 billion that ensured an average of 95 per cent payment of GenCos invoices for 2020. Also, with the current Power Sector Recovery Operation (PSRO) programme that caters for tariff shortfall, GenCos have continued to receive over 90 per cent payment of their generating invoices for the 2021 payment cycle. To determine if NERC’s PPA order is achievable or not, firstly, strategic efforts must be made to ensure gas availability for power-generating companies. Also, all parties should be involved in drafting agreements to encourage mutual clarity on outstanding debts. Finally, if GenCos succeed in producing 5,000 MW of electricity, will the NESI’s current infrastructure be able to accept this capacity? June 28, 2022 1 comment 0 FacebookTwitterPinterestEmail
