A Review of the Nigerian Energy Industry

Nigeria’s power generation output drops by 1.9% Q2

*A section of the Egbin Power Plant

OpeOluwani Akintayo

13 December 2018, Sweetcrude, Lagos — Nigerians experienced a lower access to electricity in the second quarter of the year, as according to the Nigerian Electricity Regulatory Commission, NERC, in its newly released report, the country’s power output dropped by 1.9 percent.

The country’s as total electricity generated during the second quarter of 2018 decreased by 1.9% from 8,511,481MWh recorded in the first quarter of 2018.

According to the report, the industry’s highest peak daily generation of 5,162MW for the second quarter of 2018, was recorded on the 1st May 2018.

During the same period, available generation capacity rose by 2.3% to 7,654MW relative to the first quarter of 2018.

This increase in available capacity is attributable to the increase in the number of available generation units after the maintenance and overhaul of plant generation units.

On average, 79 plant generation units were available in the second quarter compared to 78 generation units available during the first quarter of 2018.

However, NERC said due to some factors such as gas constraint, transmission challenges, water management, and limited distribution network, the increase in the available capacity did not translate into an increase in output as total electricity generated during the second quarter of 2018 decreased by 1.9% from 8,511,481MWh recorded in the first quarter of 2018.

Statistics showed that 50.1% of the available capacity was utilised during the second quarter of 2018 – 2.6% less than the capacity utilisation during the first quarter of the same year.

By implication, about half of the total available capacity during the quarter was redundant owing to a combination of factors including inadequate gas supply, water management, transmission line limitation, and limited distribution networks.

Further analysis of the generation constraints indicates that transmission and distribution networks and the water management constraints worsened during the quarter under review.

The stranded generation capacity due to transmission line limitation, water management constraint and limited distribution network increased to 1,19MW, 161MW, and 775MW respectively in the second quarter of 2018.

Although the stranded generation attributed to gas constraint declined in the second quarter of 2018, its contribution is still very significant when compared to the capacity constraints attributed to other factors during the same period.

Gas constraint accounted for about 64% (i.e., 1,842MW) of daily average stranded generation capacity in the second quarter of 2018.

NERC said resolving both the technical and operational challenges in electricity generation remains one of its top priorities.

“While continuing to monitor the implementation of the payment assurance facility for power generators to resolve the issue related to inadequate gas supply, the Commission has also commenced consultations with relevant stakeholders to develop lasting solutions to the gas impasse in the power industry”.

“Furthermore, the Commission is already is executing a number of actionable items identified in its 2017-2020 Strategic Plan towards addressing constraints related to transmission limitation and distribution networks”.

“The planned strategy includes a thorough technical assessment of DisCos’ utilization of its capital expenditure allowances for relevance and cost efficiency, evaluation of the investments required by TCN and DisCos at all TCN/DisCos interface points, and a tariff review in order to stimulate investments in network infrastructure and ensure customers get value for money”.

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