Business Hilights

Tracking Nigeria's Headline Business News Online


Rising stranded capacity means TCN, Discos lacked capabilities—AGPC boss

Ad 2
Ad 3

At a time the Minister of Power, Works and Housing, Mr. Babatunde Fashola is forcing Nigerians to believe that 24 hours electricity supply is live, the Executive Secretary, Association of Power Generation Companies (APGC), Dr Joy Ogaji, has opened up on why epileptic supplies are happening.
In an interview, she called on the Federal Government to forget saying what does not exist but “Focus and see if the distribution and transmission companies are really telling us the truth”. She said “This is because the Discos say they have the capacity to take up to 6,000MW from us and the Transmission Company of Nigeria (TCN) says it has the capacity to take 8,100MW from us. The question is: Why are they not taking it? Why is there so much stranded capacity?”
Stranded capacity refers to generated electricity that was not evacuated from plants and moved to users.
Recall that Gencos had been saying in the last few years that their electricity production capacities have jumped even to the true demand wattage for the country but the inability of both TCN and Discos to move electricity to consumers’ remains their intractable challenge.
Dr Ogaji argued that “In pursuing the current administration’s agenda of incremental power, there is a need for optimal utilisation of what is available and the need to recover the installed capacities, leading to a decrease in stranded or unutilised load/power,” stressing that “This calls for phased and well-planned utilization”.
According to her, “The emphasis/solution here is phased planning of the generation capacities in view of the fact that even what is available plus installed are not enough to meet demand forecast, which stands at over 22,000MW.”
APGC boss made it clear that “There is a need for massive investment in transmission and distribution networks in the country,” arguing that “The Gencos have the capacity to increase their output in the near term”.
“However, an increase in power generation without a resultant increase in TCN’s wheeling capacity and improved distribution infrastructure will continue to lead to stranded power generation.
Giving further explanations on how the debts owed by the Nigeria Bulk Electricity Trading Plc are affecting the operations of the Gencos, Dr Ogaji averred that “The debts owed to Gencos are increasing every month”.
According to her, “Every month, the market invoices about N55bn to the Discos, but what they are paying is about 24 per cent of that”.
She recalled that “The Federal Government intervened by bringing out N701bn to help pay for part of the money that Gencos are owed from January 2017 to December 2018. That money was exhausted in December last year.
She revealed further that following the exhaustion of the intervention fund, “Every month, Gencos are owed an average of 71.28 per cent of our invoices, and we are expected to increase generation,” hinting that “This is impacting us seriously.”
She added that “With 85 per cent of the generation coming from gas, we are not able to pay the gas suppliers. Some of them have stopped supplying gas to us. Some Gencos that can access loans are taking loans to buy gas so that they can keep generating electricity because if we don’t generate, we will be called saboteurs.
APGC Executive Scribe disclosed that “Others who cannot access loans are just sitting down and waiting; their plants are lying idle. So that is where we are: suffering and smiling..”

Business Hilights is an online news channel conceptualized and structured to report and track on a daily basis; latest developments in critical business sectors to serve as a one stop news gateway for governments, foreign and indigenous investors.