Nigeria’s power sector challenges are not likely to improve dramatically anytime soon despite government’s claims on its achievements. The magnitude of the problems on ground appears larger than is known.
These problems run through the entire value chain in the industry. The generation and distribution companies are still saddled with technical issues which have limited their capacities to generate and distribute power to consumers.
Consequently, Nigeria experienced a daily average suppressed electricity load demand of 17,000 megawatts in the last three months of 2018. This represents the daily average electricity required for both industrial and domestic needs which could not be met by the generating companies. The country was only able to generate between 3,500MW and 4,200MW daily throughout the period.
The actual daily average electricity demand load for the period was 22,000MW, as against the 13,000MW total installed capacity of the generating companies in the country.
Statistics from the Nigerian system operator put the daily transmission capacity at about 5,000MW, despite Babatunde Raji Fashola, minister of Power, Works and Housing’s persistent claim that the transmission lines have capacity to wheel about 7,000MW of electricity.
On October 22, 2018, average energy sent out was 3,854MWh/hour. Peak generation attained on October 22, 2018 was 4,729MW. This shows low/minimal optimisation of generation capacity is due to constraints on the transmission and distribution networks.
Joy Ogaji, executive secretary, Association of Power Generation Companies, said without these constraints, additional 3,000MW could be made available to customers and also serve as an incentive for power generating companies (GenCos) to recover the unavailable capacity of over 5,000MW.
A further challenge is the constant request from the system operator to make the GenCos’ power plants operate at base load contrary to their design to operate optimally and efficiently, she said.
Ogaji also said that operations of power turbines far away from their base loads lead to a reduction in efficiency or, in other words, an increase in consumption of gas (for the thermal) by as much as 15-20 percent, a cost not captured or contemplated by Multi Year Tariff Order (MYTO).
She explained that a wide variety of determinants affect the investment decision in power generation. First of all, the state of the market in the power sector acts as a determinant of whether or not generation capacity should increase or be optimised.
“To optimise the current generation capacity, planning becomes pivotal, taking into cognisance the gestation period for power development. There is need for massive investment in transmission and distribution networks in the country,” Ogaji said.
Analysts say if answers can be given to GenCos’ most pertinent questions, then power supply issues in the country will be tackled effectively. Such questions include whether they can fully transmit the power they generate, whether they can get the gas to do that, and, finally, who will pay for the power.
Olusola Bello
