A Review of the Nigerian Energy Industry

NERC sets up task force on power network instability

 …As NNPC now supplies 876mscuf of gas daily to Gencos
Oscarline Onwuemenyi 10 September 2015, Sweetcrude, Abuja –  The Chairman of the Nigerian Electricity Regulatory Commission (NERC), Dr. Sam Amadi, has stated that the interim challenges of the power sector have now shifted from poor gas supply to network instability.
Dr. Sam Amadi
Amadi, who addressed the media in Abuja yesterday, said the commission would in a matter of days set up an interim team to work around identified network challenges, to enable the sector finish the year with a high generation mark.
He explained that electricity distribution companies are being pushed to strengthen their networks for adequate load management, as well as the TCN to continue to strengthen the stability of the transmission network.
According to him, “Most of our problems are no longer gas. We are setting up an internal committee to task us on the technical challenges and make sure that we get up to 500MW fully delivered by the end of the month.
“They will concentrate on some issues of the identified issues around load management, technical challenges in the network. So, largely in the short run, getting to 5000MW is not our challenge now but dealing with the distribution companies and frequency management is.”
Meanwhile, NERC yesterday inaugurated a 14-man task force to push through its electricity generation targets of 5,000 megawatts (MW) by the end of September and 6,000MW by the year end by recovering certain stranded quantities of power into the system.
The commission, in statement it issued in Abuja, explained that peak capacity generation of 4,800MW was achieved few weeks ago by the power sector on account of its stringent regulatory measures and the cooperation of industry operators in response to the federal government’s renewed commitment to improve power supply.
Amadi, the statement noted, constituted the 14-man industry-wide taskforce with the terms of reference to ensure recovery of the stranded 1,800MW within the network.
NERC also stated that the team would articulate measures for effective delivery of the stranded power to consumers as well as initiate actions to continuously rampup generation.
It quoted Amadi to have challenged the staff of the commission on the projected generation target.
Amadi said: “We are witnessing increase of gas supply to power plants. This has resulted in the historic 4800MW generation a few weeks ago.
“From the report of the System Operator, it is clear that we could have reached 5,000MW if we did not have load rejection by distribution companies and some frequency control issues as gas supply improved.”
He said the present administration has “ensured discipline and zero tolerance for corruption and have created a political environment that is aligned to NERC’s transparent, accountable and effective regulatory approach.”
The statement further quoted Amadi as saying: “But the success we have recorded is still precarious and fragile. We have genuine fear that unless we continuously monitor the network and focus on proactively solving small problems such as load rejection by electricity distribution companies with attendant shrinkage in gas supply that could damage the long term prospect of capacity growth in the market.”
Amadi explained that NERC has solved the commercial reason for load rejection by abolishing the imbalance trading in electricity and has subsequently removed the disincentive for rejection of power.
On this, he said: “We need to deal with the technical reasons which include poor network management by the electricity distribution companies and poor frequency control by the generation companies and Transmission Company of Nigeria (TCN).”
He also informed that the challenges ahead of the commission entails increased enforcement activities, as well as ensuring implementation of regulatory measures that incentivises sustainable investment and efficient management of the network.
“In order to ensure that we are able to effectively deliver 5000MW daily by the end of the month and 6000MW by the end of the year, I constitute a task force that will remove any obstacle to achieving the mandate,” Amadi said.
The task force is headed by NERC’s Commissioner for Engineering Standards and Safety, Dr. Abba Ibrahim with representations from National Control Centre/System Operator, Transmission System Provider, Market Operator, National Integrated Power Projects, and a representative each of distribution and generation companies.
Meanwhile, a preliminary report on the recent activities at the Nigerian National Petroleum Corporation (NNPC) submitted to President Muhammadu Buhari by the Group Managing Director (GMD) of NNPC, Dr. Ibe Kachikwu, has shown that the corporation now supplies up to 876 million standard cubic feet (mscuf) of gas per day to the country’s power sector.
The submission of the report which disclosed that efforts at repositioning the NNPC have started yielding result on the nation’s economy,and this was confirmed in a statement by president’s media aide, Mr. Garba Shehu.
According to its content, gas supply to the power plants that had hitherto been handicapped by vandalism and regular cuts in flow, has improved significantly from about 630mscuf to 861mscuf day, and thus resulted in a more steady power supply as recently disclosed by the Transmission Company of Nigeria (TCN).
Through the various Gas Transport Agreements (GTAs), Gas Supply Agreements (GSAs) and Gas Purchase Agreements (GPAs) it entered into, the Nigerian Gas Company (NGC) which is a subsidiary of the NNPC, transmits gas to end users that include the power sector.
The TCN which recently recorded a peak power generation of 4748MW in August 24, 2015, had stated that the country’s generation capacity can be pushed to further higher levels given the fact that fuel supply to the generators is now stable and adequate.
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