Power sector records 20 system failures after privatisation

29 January 2015, Lagos – From November 2013 when the generation and distribution arms of the power sector were privatised by the Federal Government to January 2015, the sector has experienced 20 system collapses in total.

Power1Sixteen of the collapses were said to be total while just four were partial, according to power sector operations data obtained by our correspondent from the Transmission Company of Nigeria.

Fourteen of the collapses were said to have occurred in 2014, while in 2015, only one total collapse occurred.

As of November last year, the sector had experienced 16 system collapses in total post-privatisation. Out of this number, 15 were total, while the remaining one was a partial collapse.

Between November and December 2013, six total system collapses were recorded, while from January 2014 to November 2014, nine total system collapses were recorded in addition to one partial collapse.

A total system collapse occurs when electricity generation from the grid is lost completely. On the other hand, a partial collapse usually occurs when some parts of the grid can be sustained despite the collapse of one or more units.

For the whole of 2013, the sector experienced 22 total system collapses and two partial system collapses.

In 2012, there was a record of 16 total and eight partial system collapses.

The country was said to have recorded 22 total and 20 partial system collapses in 2010, making it the worst in recent times.

In the last quarter of 2014, the Minister of Power, Prof. Chinedu Nebo, said that N160bn investment was required annually to achieve improvement in the power transmission network, which has been in a bad state for decades.

He said that vandalism and obsolete infrastructure were some of the major challenges impeding the development of an effective power transmission network in the country.

Nebo was quoted as saying, “The transmission infrastructure is outdated and many of the equipment are in poor shape due to neglect during the NEPA/PHCN era.

“It is expected that the transmission network will require a minimum investment of $1bn (N160bn) a year over the next few years to meet current demands and position itself towards global competitiveness.”

The PUNCH on Wednesday (yesterday), exclusively reported that the country is currently losing 2,042.2 megawatts of electricity due to gas supply shortage and poor water management.

The 411 G2 and G4 units of the Shiroro hydro power plant are currently losing 300MW, while the loss of 1,742.2MW is attributed to gas supply shortage at various legacy gas-fired power plants, including the National Integrated Power Project plants.

The Federal Government had also shifted its earlier target of generating 6,000MW of electricity before the end of 2014 to this year.

In October last year, the Federal Ministry of Power stated that Deposit Money Banks in the country were gearing up to invest over $3.623bn (about N598bn) in the power sector

Figures contained in the latest Power Enabling Nigeria publication for the second quarter of 2014 showed that the banks had adopted different models in a bid to raise funds to finance the sector.

Among the models adopted by the banks are the sale of dollar-denominated bonds, issuance of Eurobonds and raising funds from the equities market.

The over $3.623bn investment is in addition to the $1.3bn banking loans for the electricity distribution companies and $1.7bn for the power generation firms in 2013.

Banks with interest in the power sector include Zenith Bank Plc, Diamond Bank Plc, Union Bank of Nigeria Plc, Access Bank Plc, Sterling Bank Plc, Skye Bank Plc, Fidelity Bank Plc, Guaranty Trust Bank Plc and First Bank of Nigeria Limited.

The Federal Government recently announced new measures to address financing-related issues in the power sector.

Top among the measures was the provision of N213bn intervention facility to settle legacy gas debts.

The Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, had stated that the facility, which would be provided by the Central Bank of Nigeria through the banks, would also be used to address revenue shortfall in the power sector.

– The Punch

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