Lagos — Nigeria currently suffers 4,000 megawatts-hour of constrained electricity supply daily, resulting in revenue losses SweetcrudeReports findings has shown.
Data obtained from the Federal Ministry of Power and the Advisory Power Team in Abuja, revealed that the daily loss has lingered for the past six months, between January and June 2020, resulting in a cumulative revenue loss of approximately N356 billion, with an average daily loss of about N2billion.
The six- month losses were as a result of three major constraints: insufficient gas supply, bad distribution infrastructure and faulty transmission facilities.
A recent report by the World Bank had chronicled how unreliable power supply costs the Africa’s largest economy a whopping N10 trillion yearly, adding that privatisation of the sector had not brought any change to its economy.
Although Nigeria had privatised its power sector since 2013 yet no result, even after pumping in billions in form of interventions.
A breakdown of month-by-month performance of the sector showed that between January 1 and January 31, 2020, the average energy that was available daily was 3,821MWh/h, total quantum of constrained power was 3,791MWh/h, while lost revenue for the month was put at N56 billion.
The highest quantity of electricity recorded on the grid in January was 4,931MW.
Average daily energy on the grid increased to 4,114MWh/h in February, while constrained power was put at 3,949MWh/h during the period yet. A loss of N55 billion was recorded in the month.
The highest power generation of 5,268MW was recorded in February.
In March, N66 billion was lost, while about 4,406MWh/h was constrained daily, as the average energy of 3,912MWh/h was available for use during the month.
The peak power generation in the country for March was 4,804MW.
The average energy that was available in April was 4,099MWh/h, as about 4,489MWh/h was stalled daily in the month.
Same month, the sector lost N65 billion and recorded its highest power generation figure of 5,316MW.
The revenue loss in May dipped to N62 billion when compared to what was recorded in the previous months.
The average available energy for May moved up marginally to 4,147MWh/h, while 4,140MWh/h was constrained from being generated on the grid daily during the review month.
The peak power generation in May 2020 was 5,296MW.
In June a total of N53 billion was lost by the sector.m, as the daily average energy was put at 3,735MWh/h, while a total of 3,703MWh/h was constrained.
So far in this month, the highest quantum of power generated was put at 5,173MW.
The team noted that three constraints had been the major setback to revenue flows and efficient power generation in the sector.
It stated, for instance, that on June 26, 2020, the average energy sent out was 3,719 MWh/h, down by 123.3MW from the previous day’s figure.
“The power sector lost an estimated N2,243,000,000 on June 26, 2020 due to constraints from insufficient gas supply, distribution infrastructure and transmission infrastructure,” the group said.
As a means of cushioning the effects of COVID19 on the sector, the distribution firms through its umbrella body, Association of Nigerian Electricity Distributors, ANED, have called on the government to intervene in gas pricing for electricity generation.
The plea from the utility firms came following backlashes received after announcing July 1 as the official kick-start date for the new electricity tariffs.
They noted that the cost of gas remained one of the key determinants of electricity tariff in Nigeria, saying it was high time the government found a way to help bring down the gas price.
The Executive Director, Research and Advocacy, ANED, Sunday Oduntan, said a reduction in gas price would better the lot of the sector.
“Most of Nigeria’s power generating plants are thermal plants. They use gas as their fuel and as long as the price of gas is high, the cost of generation and the eventual tariff to the end user will also be high.”
According to him, gas price is also affected by the fluctuations in foreign exchange.
Oduntan explained that having the cost of gas for power generation fixed in dollars while tariff was fixed in naira creates an imbalance in the sector.
“Today, the price of gas for local power production is a little over $3 for one million British Thermal Units. Meanwhile, in this same country, the cost at which the NLNG exports gas is less than half the same amount.
“If you also consider that some of these international oil companies are still flaring this much-needed gas into the atmosphere, you will realise that there are many options available to the government to intervene in the quest to make electricity more affordable.”
According to the Discos’ spokesperson, the cost of gas currently accounts for almost 70 percent of all the input the plants utilise to generate power.
He said except stakeholders begin to consider solutions from that angle, the country might not make much progress in providing the cheap electricity Nigerians need.
Nigeria’s energy generation mix is currently around 80 percent thermal and 20 percent hydro.