Power minister’s 18,000mw capacity whitewash fails to achieve goal

BY: Olusola Bello.

The federal government claims that the country now has an installed electricity capacity of 18,000 megawatts with 8,000 megawatts of daily generation. This claim has, as expected, roused the attention of and attracted comments from industry operators.

The claim is coming amid complaints of terrible supply situations across the country with a number of major cities in total blackout for weeks.

Abubakar Aliyu, minister of power, who made this claim that is now the subject of disputations, had said: “I’d like you also to take away that we deliver 8,000mw of electricity daily through a combination of Grid, Embedded and Industrial Captive supply of Electricity (and not 4,000mw as is frequently reported), [with] much of this capacity added during the life of this administration.”

8,000 megawatts and no impact on the lives of the people? It means something is wrong somewhere, an industry operator exclaimed.

Some of those that commented on the issue wondered what informed the government’s decision to be praising itself for an achievement that has little or no impact on the lives of citizens. These figures remain potential and not in reality.

A few people said they are not surprised that the government could come to tell people what does not exist and expect that everyone would accept it without questioning.

There is a belief among analysts, industry operators and the general power consumers, that the government wants to push certain narratives about its achievement in the power sector in the approach to the 2023 election. They said the government is looking for something with which it can sell itself to Nigerians as a campaign programme.

Power generation is one area that this government has continued to score very low, no matter the number of projects it has put in place. No doubt, a number of power facilities have been put in place, but the impact of this is yet to be felt by the people, a clear indication, say observers, that there is something the government is not doing right.

A recurring question people are asking is of what use is the installed 18,000 megawatts of electricity, even if it is available, when there is nothing on the ground to show that the Transmission Company of Nigeria (TCN) can transmit more than 4000 megawatts in the next six months to one year?

For several years, even before the President Muhammadu Buhari’s administration came to power, Nigeria has been having potentially installed capacity of above 13,000 megawatts, yet the generation that is wheeled out by TCN has not been able to grow beyond 4,000 megawatts, seven years into this administration, which now has just a little over a year to leave office after two terms in the saddle.

It has also often been touted that the Transmission Company of Nigeria (TCN) has an installed capacity of about 7000 megawatts, yet in all its years of existence, it has not made any significant consistent improvement beyond 4000 megawatts. On very rare occasions, perhaps about two times, it transmitted 5000 megawatts, which was celebrated to high heavens by officials of this government, a feat that lasted for just a few hours on each occasion.

Experts say the government claim of an installed 18,000 megawatts capacity of electricity in which captive power supplies are added is an exercise in futility. This is because this makes little or no positive impact on the social-economic lives of the people who, daily, cry out for better power supply.

Of what beneficial impact has the embedded power generated made on the generality of the people?

For instance, what interest would it be to Nigerians that reside in Ajegunle in Lagos, or Gwagwalada in Abuja, that a company provides captive power service to residential areas in Ikoyi, Lagos or Maitama in Abuja, when he or she lives in perpetual darkness.

“The minister wants to put 8,000MW into our consciousness. Good. If so, he should go the whole way and add the gen-sets in our houses. After all, they serve important loads too – the load that actually votes. That way the number will come up to approx 50,000MW. He should count the totally unserved load, those who have zero supply. That way, Nigerians will truly appreciate the task that this administration confronts.

He said, “All this is politics and I do not begrudge the minister trying to paint a positive picture about what this administration has actually achieved.

“The reality, however, is that the portion of this energy that is traded and on which tariffs paid by the general public are set, is less than five percent of the whole (average 4,200MW/100,000MW/h daily) and the federal government has been unable to persuade Nigerians that they should pay economic tariffs for grid-connected energy (even though we pay economic tariffs for the rest of that 50GW). This is where the entire range of issues that bedevil our electricity sector is focused.

“The minister does not have sleepless nights over captive generation and off-grid industrial users. He does lose sleep over the grid-connected market and that market is 4GW large…instead of 40GW.

“The federal government is totally at sea about how to get us to the point of trading 8GW daily, speak less of 40GW. The grid-connected market has stagnated and we need to come together to ask why and seek honest solutions and minimise the PR spin being put on numbers.”

Whoever must have asked the minister of power to come up with such statistics in order to impress the public does not like this government because, as far as Nigerians are concerned, this is one area this government is currently recording monumental failure. The situation may be different tomorrow.

“These are not my figures; this was an industry study conducted by KPMG recently.” Aliyu said much of the improvement to 8,000mw occurred under the Buhari’s administration, “through positive industrial policies driving captive industrial power investment and improved grid stability, although we continue and must continue to work to improve the performance of the grid,” said the minister.

He used the statistics generated by KPMG, a finance and auditing advisory firm, which carried out a survey about the installed capacity of electricity that is available in the country. This includes private companies that are forced to buy generators by virtue of the circumstance they find themselves in. This is absurd for a country that prides itself as the largest economy in Africa. It is not a good public relations item, some operators said.

Aliyu said much of the improvement to 8,000mw occurred under the Buhari’s administration, “through positive industrial policies driving captive industrial power investment and improved grid stability although we continue and must continue to work to improve the performance of the grid.” Observers say the question remains: “What effect has this had on employment generation, unskilled and skilled labourers?”

The minister explained that these come from 28 grid power plants with an installed capacity of 13,000mw and operational daily capacities of around 5,000mw, with the plants located at Egbin, Ughelli, Geregu, Kainji.

“We have 266 captive power plants (mainly industrial > 1MW) with installed capacities of 4,000mw and daily operational capacities of around 2,500mw. These include the Dangote Cement Capacities in Obajana Ibese (400MW), and NLNG’s Bonny Island Power Plant (240MW), among others.

The minister also attributed the current erratic supply of electricity to the low water level in hydro dams in the country.

He said the government was doing everything possible to ensure an optimum supply of gas to ensure quick restoration of power.

But it is an established fact that at this time of the year, the hydros are less dependent upon for power supply, while the concentration shifts to the thermal and gas-fired plants.

Operators said its lack of proper planning on the side of the government that has brought the country to this ugly situation of near total lack of power supply across the country.

If the government was proactive enough, arrangements should have been made to pay the generating companies that have complained of non-payment of money due them, which has affected their abilities to pay gas suppliers. The consequence of this is that the generating companies that should have been relied on at this time of the year find themselves helpless, and are also helpless because they don’t have gas to generate power.

According to Joy Ogaji, executive secretary of the Association of Power Generation Companies (APGC), managing the interest of over twenty-six (26) power companies: “GenCos are dying under huge unpaid debt. Gas is cash and carry. GenCos bills are consum; pay later at an indeterminate date. Please kindly clear our debts so we can pay our creditors

“Gas is cash and carry. Why is power generation on credit with an indeterminate date of payment?” she asked.

Another operator that does not want his name mentioned, added his voice to Ogaji by saying: “What you need to know about the present state of the Nigerian electricity demand and supply industry and causes of epileptic power supply.”

“Niger Delta Power Holding Company (NDPHC), which is government-owned, has over 1200 megawatts of electricity that are mechanically available to generate but severely constrained by inadequate gas supply. Currently, Niger Delta Power Holding Company/NIPP gas-fired power plants have gas to generate only 400 MW.

“In order to guarantee stable power, NDPHC had to deposit over N5 billion with gas suppliers to be able to run the 600MW daily for one month.”

Despite that, NDPHC only receives gas supply to run 300 MW on average due to NGC gas pipeline challenges. In addition, NDPHC also has a gas supply agreement with Total Energies for gas supply to Alaoji NIPP for two gas turbines of at least 230 MW.

However, the TotalEnergies pipeline was recently vandalised and TotalEnergies declared force Majeure.

NDPHC available generation capacity

Benin (Ihovbor) – 345 MW but only 1 Gas Turbine (GT) on Grid (100MW). NIPP/NDPHC have 2 GTs mechanically available (230MW), but no gas

Omotosho has 345 MW but only 1 GT running on Grid (100MW)

2 GTs are mechanically available (230MW) but with no gas to run them.

Ogorode (Sapele ) Power Plant has – 345 MW but only 1 GT on Grid (100MW). 2 GTs mechanically available (230MW), but with no gas

Olorunsogo Power Plant – 1 GT is available (115MW) but with no gas

Alaoji NIPP Power Plant has 345 MW but only 1 GT on Grid (100MW). 2 GTs available (230MW) but no gas from Total due to vandalism of Total’s pipeline

Total units on Grid = 4GTs = 400MW

NIPP/NDPHC gas fired power plants, but with no gas for generation = 1045MW

“The irony of this is that they are government owned plants,” he lamented.

The Nigeria National Petroleum Company (NNPC) controls not less than 60 percent of the equity shares of the Joint Venture Contracts that have International Oil Companies (IOCs) responsible for gas supply as partners.

NNPC will not give gas to Niger Delta Power Holding Company on credit. It is purely done on a Cash and Carry basis.

For TotalEnergies to supply gas to NIPP/NDPHC power plants, the organisation has to provide a Standing Order for Uninterrupted Payment or Standing Approval for Payment cover by a Deposit of the Sum of N20 billion Credit Line of Banking Instruments