Why power generation firms lost N122.79bn in 5 months

* 110.7 m Nigerians lack access to electricity, says United Nations report

*Generation grew from 4,214.32MW to 8,145MW, but GenCos recovered only 3,930.68MW ─ APGC Executive Secretary

* Inadequate capacity, losses discourage investors in further investment in sector

Isola Moses | ConsumerConnect

Due to limited capacity in fully delivering their mandate to electricity consumers in the electricity value chain in the country, the Nigerian Power Generation Companies (GenCos) has disclosed that it lost about N122.79 billion between January and May 2020.

Dr. Joy Ogaji, Executive Secretary of the Association of Power Generation Companies (APGC), said available capacity generation stood at 8,286.62 megawatts in May, average generation was 4,146.79 MW, whereas stranded generation remained at 4,140 MW.

From January to April, the generation capacity average 8000MW, average generation was 3,821, 4,114, 3,912, and 4,099 megawatts for January to April respectively, whereas stranded generation for the respective months were 3,791, 3,949, 4,406 and 4,489 respectively, according to The Guardian.

The Executive Secretary said that losses constitute a risk, as the investors felt discouraged from further investment in the sector.

Current transmission and distribution infrastructure have continuously failed to wheel the generated electricity, Dr. Ogaji stressed.

According to her, the supply growth from the takeover date in November 2013 to date shows that available generation capacity which was 4,214.32MW has increased by 48 per cent to 8,145MW (as GenCos recovered 3,930.68MW).

“However, due to system constraints, the generated power is rejected or forced to be reduced to match the infrastructure that transmits and distributes this power to the Customer.

“A case in Point: In Quarter one 2020, despite an available generation capability of 8,145MW, GenCos were only allowed to generate 3,987MW, thus losing an average of 4,159MW daily average generation,” Ogaji stated.

She stressed that the wellbeing of the power generation company goes beyond efficient operations to include its ability to generate income from power generated.

With a total available installed generation capacity of more than 7,500MW and maximum wheeling capacity of not more than 5,500MW, there would always be a recurring instance of about 2,000MW idle generation.

Ogaji noted that idle generation represents capital investment not able to yield revenue that will hence impact the ability of the GenCos to support efficient operations and service loans used in developing the power plants.

Meanwhile, the United Nations (UN) in the latest global energy progress report launched Thursday, June 4, 2020, said that no fewer than 110.7 million Nigerians, of a 195.8 million estimated population had access to electricity as of 2018.

This represents a 57 percent national electricity access rate compared with the global average of 90 percent, says the report.

The report indicates an increase in the number of Nigerians with access to electricity by 34.6 million people from 76.1 million in 2010.

However, on the global scene, the report says the world has made “promising progress’’ towards ensuring universal access to sustainable energy over the last decade.

The number of people without access to electricity dropped from 1.2 billion globally in 2010 to 789 million in 2018.

It stressed that this is not the case in Nigeria, where the figure rather increased from 82.4 million people without electricity access in 2010 to 85.2 million in 2018.

The report was produced by the International Renewable Energy Agency (IRENA) in collaboration with the International Energy Agency (IEA), World Bank, Word Health Organisation (WHO) and other relevant agencies.