GenCos indict NBET, explain blackouts as power supply drops to 1,393.40MW in Nigeria

*The electricity Generation Companies have blamed the Nigerian Bulk Electricity Trading (NBET) Plc for the abysmal power supply situation because of the latter’s  refusal to fulfill its financial obligations to GenCos in line with the Power Purchase Agreements

*The figures the APGC is brandisging about are untrue, as only companies with active gas supply and transportation contracts were paid for unutilised capacity, reacts NBET Spokesperson

Isola Moses | ConsumerConnect

Amid the country’s continued suffering from insufficient electricity generation and transmission, as well epileptic power supply with attendant negative implications on individuals, organisations and businesses, the Generation Companies (GenCos) have explained factors responsible for the development in the Nigerian economy.

ConsumerConnect reports Dr. Joy Ogaji, Executive Secretary of the Association of Power Generation Companies (APGC), a coalition body of the GenCos, disclosed this Sunday, Match 13, 2022, at a press conference in Abuja, FCT.

Investigation revealed that as of 5p.m. Sunday, the national grid supply was about 1,393.40 Megawatts with only nine plants generating to the grid in Nigeria.

Dr. Ogaji also noted that the Nigerian Bulk Electricity Trading (NBET) Plc is responsible for the appalling power situation due to its refusal to fulfill its obligations to the GenCos as contained in the Power Purchase Agreements (PPA).

The APGC Chairman, in a detailed breakdown, stated that NBET owed the GenCos N214.93 billion in 2015; N273.32 billion in 2016; N236.47 in 2017, N264.08 billion in 2018, and N256.97 billion, N266.01 billion and N120.25 billion in 2019,2020 and 2021 respectively.

The humongous debt, he noted, has hampered the ability of the GenCos to function optimally regarding maintenance and power distribution while clarifying that if the debts were paid, the GenCos could generate 9,000MW for distribution to electricity consumers immediately.

Ogaji said: “Illiquidity caused by the huge sums owed GenCos by NBET, has more than ever before continued to frustrate the GenCos and kept them incapable of meeting their obligations which are extremely necessary to keep their power plants running and make capacities available, while observing required Health, Safety and Environment (HSE) standards.

“Such obligations include our operations and maintenance (O&M) as and when due, procurement of critical capital, spare parts and accessories, payment, and servicing of existing loans from lenders and financiers, employee obligations, etc.

“Recently, GenCos cried out to the authorities and are still looking forward to a favourable consideration of their pleas for foreign exchange support to enable them to procure critical spares for their turbines and equipment to keep them in good state of repair.”

She also said: “This is in addition to the FX challenges faced by the Hydros, whose concession fees are dollarised.

“Most of the electricity generated in Nigeria, about 80 percent, come from gas-fired turbines. Natural gas is the feedstock or fuel of these plants.

“GenCos have consistently been dealing with unending gas-related challenges which inhibit optimal generation.

“Issues of gas volume, gas quality, gas pressure and gas transportation have consistently curtailed capacity utilisation by GenCos thereby affecting generation.”

She further explained that the “issues need to be addressed and urgently too, as the GenCos have always requested. Unfortunately, the unenforceable state of the contracts in the NESI (Nigerian Electricity Supply Industry) and the broken cycle of payment assurance have made the enforcement of what would ordinarily be basic obligations of parties to the industry agreements, impossible.”

NBET responds to allegation

However, NBET, in a swift reaction to the GenCos’ allegation of being responsible for poor power generation, transmission and supply situation in the country, stated that the figures brandished by the APGC are untrue, saying only companies with active gas supply and transportation contracts were paid for unutilised capacity.

Henrietta Ighomrore, Head of Corporate Communications at NBET, also said that only five power generation companies with active Gas Purchase Agreement were paid for unused capacity.

Ighomrore also clarified that the GenCos do not possess the capacity to generate 9,000MW.

She as well noted that claims by Dr. Ogaji that the GenCos have the capacity to generate 9,000MW were not accurate as inspections by NBET have shown that the capacity does not exist.

“On the issue of capacity payments, the contract documents are very clear on how it is treated. All GenCos get paid for the associated capacity on energy delivered to the national grid. Only GenCos with active PPAs get full capacity payment based on their active gas contracts.

“You are well aware that active gas contracts are associated with the take and pay obligations, which come with more financial exposure and responsibilities,” she stated.

The NBET Head of Corporate Communications said: “Nonetheless, the Regulator (NERC) has set in motion the process for partial activation of contracts in the sector, which was what necessitated the scheduled capacity test by NBET to various thermal plants around the country.

“Although, we were not able to record full participation of all GenCos, as some were either not able or showed willingness. With a better understanding of the intent, we expect full cooperation of GenCos in subsequent capacity tests of their plants. It is important to ascertain the actual capacity of our generation network to enable better planning and efficient dispatch of power within the grid network”.

“The situation in the Power Sector right now is not one for name calling or blame game, neither is it one for fictitious data reporting.

“As you are well aware, the Federal Government via NBET has continued to deploy innovative solutions aimed at sustaining sufficient cash flow within the Power Sector especially payments to the GenCos to ensure they meet their immediate obligations and continue to meet and ramp up generation to the National grid.”

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