• Monday, May 27, 2024
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Why Transcorp sells electricity outside Nigeria

Why Transcorp sells electricity outside Nigeria

Transcorp, a Nigerian power generation company, has revealed it is exporting excess electricity to neighbouring countries.

This move comes amid challenges within the domestic power sector, specifically the inability of local distribution companies to absorb all the power generated by Transcorp’s plants.

According to Peter Ikenga, the managing director of Transcorp Power, the company turned to the international market because the distribution companies (DisCos) in Nigeria, often cannot take all the load generated from its plants.

Read also: FG Says 85% of Nigerians retain electricity subsidy despite tariff hike

Ikenga, however, stated that it may seem contradictory to sell electricity to the international market, but the company’s goal is to maximise the power its plants generate.

He said, “Due to some of the limitations you have on the grid, you have a scenario whereby, you have distribution companies from time to time unable to take that load, meaning that they are unable to take all the power that we generate and you cannot store electricity.”

On Monday, BusinessDay reported that the national grid collapsed for the fifth time in 2024, throwing Nigerians into darkness once again.

The national grid, which serves as the backbone of Nigeria’s electricity system, has been plagued by a myriad of problems, ranging from outdated infrastructure to inadequate maintenance and funding constraints. These issues have contributed to the grid’s instability, leading to frequent collapses and widespread power outages across the country.

Industry data obtained by BusinessDay revealed that from the beginning of Nigeria’s democratic rule, the grid has collapsed 579 times, despite efforts and reforms to stabilise the grid.

Ikenga stated that due to the grid’s instability, Transcorp Power had to move generated power that could not be put on the grid to international markets with more capacities.

He said, “We started seeing some level of stranded capacity within the plant and that stranded capacity cannot be consumed locally. We had to look for a market outside the country.

“So what you find us exporting is typically part of generated power that otherwise was not put on the grid, so to say”.

The managing director also added that the problem with the grid is a structural issue within the sector, thus GenCos had to avoid a situation where poor demand prevented them from maximising the available capacity within their plants.

Read also: How Nigerians can survive new electricity tariff hike

According to a report from the Nigerian Electricity Regulatory Commission, GenCos provided electricity to four international customers and $11.16 million was earned as profits in 2023.

The report read, “None of the four international customers being supplied by GenCos in the Nigerian Electricity Supply Industry made payment against the cumulative invoice of $11.16 million issued by the Market Operator for services rendered in 2023/Q3”.