What is the trouble with the power sector? – Senate starts probe

No Comments » September 7th, 2015 posted by // Categories: Energy Development Project



What is the trouble with the power sector?

Posted By: Onyedi Ojiabor and John Ofikhenua.on: In: FeaturedNewsNo Comments

What is the  trouble with the  power sector?

Despite the fact that a whopping $20 million had been sunk into the power sector in the past 16 years, electricity supplies reamin expensive as many businesses and homes rely on self-help. In fact, the Lagos Chamber of Commerce and Industry says only small-scale industrial concerns have 40 per cent dependent on public supply from the National Grid. The multi-nationals depend 100 per cent on private power generation. But, a senate committee will today launch a probe into the problems even as the National Electricity Regulatory (NERC) has  raised a 14-member task force to shore up supply, write  Onyedi Ojiabor and John Ofikhenua.

National Integrated Power Project (NIPP) 
•Alaoji Generation Company (Abia State)
•Benin Generation Company, Ihovbor, (Edo State)
•Egbema Generation Company (Imo State)
•Gbarain Generation Company (Bayelsa State)
•Calabar Generation Company (Cross River) 
•Geregu Generation Company (Kogi State)
•Omotosho Generation Company (Ondo State)
•Ogorode Generation Company, Sapele, (Delta State),
•Omoku Generation Company (Rivers State)
•Olorunsogo Generation Company (Ogun State). 
•They have a combined installed generation capacity of 5,453 megawatts (Mw) but currently injecting less than 2,000Mw into the National Grid.

PHCN successor companies
Some of the Electricity Distribution Companies DISCOS 
Abuja, Benin, Eko, Enugu, Ibadan, Ikeja, Jos, Kano, Port Harcourt, Yola and Kaduna 
Some of the Electricity Generation Companies (GENCOS) •Afam Power Plc
•Egbin Power Plc
•Kainji Hydro Electric Plc
•Sapele Power Plc
•Shiroro Hydro Electric Plc
•Ughelli Power Plc
•Geregu Phase I
•Olorunsogo Phase I,

•Okpai Power Plant (AGIP) operational

•Afam VI Power Plant (Shell) operational

•Agura Power Plant (Chevron) in the pipeline

•Qua Iboe Power Plant (ExxonMobil) ongoing

Independent Power Projects (IPP)
•Omoku (Rivers) 
•Mabon (Gombe)
•Wempco (Ogun)
•AES (Lagos)
•Trans Amadi (Rivers)
•Notore (Rivers)
•Ibom Power (Akwa Ibom)
•Geometric (Abia)


• Examine the entire power value chain (generation, transmission & distribution)

•Abysmal performance of generation segment •Turn Around Maintenance (TAM)

•Gas pipeline vandalism •Deteriorating infrastructure

•Explanations of Transmission Company of Nigeria (TCN)

•Pre-privatisation states of power plants.

• Sucessor companies’ investments so far (including metering)

•Motive behind request for bailout/loan by successor companies.

SENATORS will today begin investigation into alleged unwholesome practices in the power sector.

A statement by the Clerk of the Senate Ad-hoc Committee on Power, Cletus A. Ojabo, said that the power sector probe will be in form of investigative hearing and interactive session.

Ojabo said that the investigation will centre on funds appropriated for the power sector since 1999 and the unbundling of the Power Holding Company of Nigeria (PHCN).

The statement was, however, silent on those that have been invited to appear before the probe panel.

It is expected that all those who played key roles in the power sector since 1999, including ministers and heads of government departments and parastatals, will appear before the panel.

Senate President Bukola Saraki inaugurated the ad-hoc committee to conduct a comprehensive probe of allegations of questionable practices in the power sector.

The committee, headed by Senator Abubakar Kyari (Borno North), is to examine the entire power value chain, including generation, transmission and distribution with a view to identifying the sector’s problems in the sector are.

At the committee’s inauguration three weeks ago, Saraki noted that the task before the panel is huge, as he frowned at the irregular supply of electricity, despite the huge investments in the sector.

Kyari, in his remarks, detailed the nature of the investigation his committee is saddled with.

He said: “A close look at the entire power value chain (generation, transmission and distribution) calls for review of our policies in order to obtain optimum performances across the board.

“The abysmal performance of the generation segment is no longer news in view of the current deteriorating power supply which hovers around 4,600 megawatt (MW) for a population of over 170 million people, despite the huge resources committed into the sector.

“This compared with our contemporaries it is highly regrettable. No wonder so many companies have relocated from the shores of this nation, due to increasing cost of production.

“The issue of turnaround maintenance and gas pipeline vandalism,just to mention a few, are some of the teething problems bedeviling the sector.

“We must address it now in order to stem this destructive tide. The committee will beam its searchlight in this direction to put things in proper perspectives.”

Kyari added: “Having realised that the transmission segment is the major linkage between the generation and distribution fronts, increasing our capacity in this direction is also very necessary, since power produced must be utilised immediately.

“Deteriorating infrastructures in this segment must be addressed forthwith. The Committee attaches great importance to this and would work assiduously in ensuring that all these leakages or slippages in this area are brought to the front burner and dealt with.

“It is in line with this objective that the committee would be seeking explanations from the management of Transmission Company of Nigeria (TCN) on the terms of their management contract with the Federal Government as it relates to assets inherited, funds injected into the Company so far and the achievement recorded.”

On distribution, Kyari noted that the committee is desirous of ascertaining the level of funds committed into it before privatisation since the segment is currently solely private sector driven.

He said: “It calls for vigilance as successor companies are expected to bring in investments to improve the quality of services in terms with the agreement.

“Signals emanating from their activities show that excessive profiteering has been the major determinant of their decisions.

“It is on record that some of the distribution companies rejected power load allocations to reduce cost.

“Their metering system calls for fundamental review, since the emphasis has been on estimated billings and imposition of fixed charges for services not rendered.

“There have been a lot of unwholesome practices by some of these companies and the committee has to get down to the root of these problems especially where provisions have been made in the past through appropriation, prior to privatisation and funds were not properly utilised.

“We must find out what has brought us to this sorry state. The National Integrated Power Project (NIPP) was designed to fast-track the improvement of electricity supply nationwide, hence it was involved in project implementation across the gamut of the power chain.

“However, some of the power plants built have not been able to contribute meaningfully to the power generation through the National Grid.

“The resources committed to these projects are enormous and the committee, in keeping with its mandate, will be seeking for answers in order to chart the way forward.

“The Federal Ministry of Power, its departments and agencies and other key players within the power sector will be appearing before the committee to provide needed information in order to achieve our laudable objectives”.

He added: “The second arm of the committee’s mandate is in respect of the unbundling of the power sector, which was midwife by the Bureau of Public Enterprises (BPE).

“The committee will be seeking inputs from the establishment on the process of privatisation as it relates to funds committed to the privatisation process, funds generated, the settlement of laid-off employees of the Power Holding Company of Nigeria (PHCN) and successful bidders (companies) financial profile.

“Of importance is the need to verify why these companies are already asking for bail out/loan facilities from the Central Bank of Nigeria (CBN).”

Kyari however noted that “this committee is not out to witchhunt any person or organisation. We are on a fact-finding mission and would pursue our mandate objectively”.

NERC raises task force for attainment of 5,000MW

DETERMINED to raise power generation to 5,000megawatts for the Nigerian Electricity Supply Industry (NESI) by the end of the month, the Nigerian Electricity Regulatory Commission (NERC) yesterday inaugurated a 14-man task force.

It is part of plans to end the year with the attainment of the 6,000 megawatts mark.

A peak capacity generation of 4,800 megawatts was achieved few weeks ago on account of stringent regulatory measures applied by the NERC with the cooperation of operators in the power sector.

It was also the operators’ response to the Federal Government renewed commitment to improve power supply.

NERC Chairman Sam Amadi constituted the 14-man industry-wide taskforce with the terms of reference to ensure recovery of stranded 1,800 megawatts within the network; articulate measures for effective delivery of the stranded power to consumers; and initiate actions to continuously ramp-up generation.

Challenging the commission’s employees on the 6000 megawatts target, Dr. Amadi said: “We are witnessing increase of gas supply to power plants. This has resulted in the historic 4,800mw generation a few weeks ago. From the report of the System Operator, it is clear that we could have reached 5,000mw if we did not have load rejection by distribution companies and some frequency control issues as gas supply improved.”

He said that the present administration has “ensured discipline and zero tolerance for corruption has created a political environment that is aligned to NERC’s transparent, accountable and effective regulatory approach.”

The NERC chief noted further: “But, the success we have recorded is still precarious and fragile. We have genuine fear that unless we continuously monitor the network and focus on proactively solving small problems.”

He listed such problems as as load rejection by electricity distribution companies with attendant shrinkage in gas supply that could damage the long-term prospect of capacity growth in the market.

Reminding the workers on the task ahead, Amadi said the commission has solved the commercial reason for load rejection by abolishing the imbalance trading in electricity and has subsequently remove the disincentive for rejection of power.

“Therefore, we need to deal with the technical reasons which include poor network management by the electricity distribution companies and poor frequency control by the generation companies and Transmission Company of Nigeria (TCN).”

He told the employees that the challenges ahead of them will entail increased enforcement activities as well as ensure the implementation of regulatory regimes that incentivised sustainable investment and efficient management of the network.

He said: “In order to ensure that we are able to effectively deliver 5,000mw daily by the end of the month and 6000mw by the end of the year, I constitute a task force that will remove any obstacle to achieving the mandate.”

The task force is headed by the NERC Commissioner in charge of Engineering Standards and Safety, Dr. Abba Ibrahim, with representation from National Control Centre/System Operator; Transmission System Provider; Market Operator; National Integrated Power Project; a representative each of distribution and generation companies.

Opt In Image
Send Me Free Email Updates

(enter your email address below)

Leave a Reply


Home | About | Contact | Login