Nigeria’s biggest power station, Egbin, with output capacity of 1320 megawatts (Mw), currently produces 600Mw due to what the Group Managing Director of Sahara Power Group, owners of Egbin, Mr. Kola Adesina, described as “system issue.”
Adesina, who spoke to newsmen on the sideline of the graduation ceremony of young engineers trained under the Sahara Energy Graduate Engineering Programme (GEP), which held in Lagos, decried the current state of the power sector. He said it is unbelievable that a power plant that has the capacity to produce 1320Mw was producing only 600Mw.
Explaining the challenges facing the sector and the reason Nigerians are not getting the best from it, Adesina, who doubles as the Chairman of Ikeja Electricity Distribution Company Plc (Ikeja Electric), said it is lack of coordination among players in the power supply value chain. He said the players in the power sector need to understand that the main problem of the sector was lack of system and coordination in the entire value chain.
“The challenges are many; the first one is that you need to have a system before you can operate. So the value chain, is it coordinated? Is there any handshake in that value system? Is the handshake regular? Where do people drop the balls in this system? Those are issues that need to be resolved. Everything must work harmoniously, consistently, regularly and steadily for you to have electricity.
Adesina, however, faulted the move by the Transmission Company of Nigeria (TCN) to supply power directly to eligible customers, saying that was contrary to the system’s anticipation and was one of the issues discussed at the GenCos / DisCos meeting.
The Executive Secretary, Association of Power Generation Companies (APGC), Dr. Joy Ogaji, corroborated Adesina’s assertion when she last week threatened that the electricity generation companies (GenCos) would shut down operations if issues in the sector are not addressed. Ogaji noted that the Nigerian Bulk Electricity Trading Company (NBET) was not honoring the agreement it had with GenCos, adding that GenCos were facing liquidity challenges due to NBET’s inability to fulfill the Power Purchase Agreement (PPA) terms of 100 percent payment for power generated and supplied.
Ogaji accused NBET’s management of constituting itself as “the Alpha and Omega” authority that has the capacity to make or mar generation businesses in the country, noting that the situation is so bad that to remain in business and provide power to Nigerians, GenCos have to plead, lobby, and beg to be paid for power generated and used.
She said: “NBET has now reduced its role to blackmailing and threatening GenCos investors and chairmen who have refused to concede to NBET’s illegal demand of a 0.75 percent charge on invoices paid to gas suppliers. NBET has clearly threatened not to release payments due GenCos until they accede to NBET’s request, urging them to agree for a quid pro quo with the 0.75 percent administrative charge.
“The situation is truly grave and completely unprecedented as NBET has completely shed its role as a licensee of the industry and has taken on some sort of regulatory role. This singular action by NBET may lead to shutdown of power supply by GenCos, who have unanimously agreed to call the bluff of NBET.”