Power Generation Faces Collapse Over ‘Rejected’ Energy, Huge Indebtedness

Unless the Federal Government intervenes immediately in the imbroglio in the energy market, the nation’s electricity generation, which recently improved from around 3.528MW to 4000MW in the last two weeks, may nose-dive.

Reason: Electricity generators, popularly known as GENCOs say they are reeling under very unfavourable operating circumstances leading to loss which has become a disincentive to investors and their capacity recovery targets.

The Managing Director and Chief Executive Officer of Mainstream Energy Solution Ltd, a firm to which the Hydro Power Plants in Jebba and New Bussa were concessioned to for a period of 30 years, Lemu Audu, yesterday, expressed regret that the GENCOs have continued to operate at a loss due to the inefficiency of other members in the energy chain in the country.

He said on a daily basis, they loose a quarter of electricity generated owing to non-evacuation by the Transmission Company of Nigeria (TCN) or being rejected by the Distribution Companies (DISCOs.)

Using his two power plants as example, he revealed that between February and March 13 this year, his group has suffered loss of wasted energy worth N97.077 million, excluding arrears of indebtedness to the group for energy generated and supplied to the market operator amounting to over N53 billion which the Nigerian Bulk Electricity Trader (NBET), the marker operator was yet to settle despite the recent receipt of over N700 billion.

Accordingly, he said the prevailing situation and environment for the GENCOs was making it difficult for existing shareholders and new investors to operate.

To avert the unpleasant situation where GENCOs would shut down operation and throw the nation into darkness, Lemu said “ Government should allow GENCOs enter into bilateral agreements with eligible off-takers other than restrict supplies to grid. ‘’Government can introduce subsidy for the rural and urban poor while industrial and other eligible users are allowed to pay the realistic tariff.

‘’GENCOs should be paid ‘Deemed Capacity ’ instead of evacuated energy to check against energy waste since it’s not the fault of GENCOs but that of others and GENCOs should be given priority in the access to forex which at the moment is absence because over 90 per cent of their requirements are import- dependent.’’

Reacting to the accusation, Secretary General of Association of Distribution Companies in Nigeria, Sunday Odutan, explained that DISCOs were rejecting power from TCN because most often, it would not take power to the required destination because of its obsolete transmission infrastructure. He explained that DISCOs can never collect power at locations they didn’t ask for because of the difficulties in distributing or recovery from such locations.

TCN General Manager, Public Affairs, Mrs. Seun Olagunju, expressed surprise at the accusations. She said: “ Where are these accusations coming from again? We are just coming from a stakeholders’ meeting and none of these complaints were raised there, more so that we had agreed that nobody should be raising these issues in the media. You know what, I wont say anything other than that a bad workman complains about his tools.’’

Source: Guardian


Please enter your comment!
Please enter your name here