GENCOs doubt electricity improvement in 2019


THERE is palpable fear by electricity generation companies, GENCOs, that output may not improve in 2019. They had expected to see a working template from government for improved activities but which has not been made available.

This is coming at the backdrop the 2018 third quarter, Q3’18, report of the National Bureau of Statistics, NBS, showing a daily average of 78,917 MWh of energy generated by power stations, against  the total average of 81,561MWh in Q2’18. Joy Ogaji, Executive Secretary, Association of Power Generation Companies, expressed the fears of the GENCOs in a statement made available to Vanguard Newspaper. She stated: “If the status quo remains, I do not foresee any improvement in 2019. Things have to be put in place.  On the information from NBS, what we should focus on is, how much of what is generated got to Nigerian homes and businesses.

“It’s high time we moved away from these inflation of numbers to focusing on optimisation.”  She explained that there is lack of necessary funding for their operations, such as acquiring spare parts and equipment for the power generation stations.   According to her, “Investors’ confidence  has continued to nose dive gradually with every passing month. This has also reduced the interest of international aids like World Bank, the United States Agency for International Development, USAID etc. She said, “Gencos are unable to pay gas debt; the inability to pay for contracted gas has led to the immediate shutting off gas supply to some power plants. In the long-term, gas producers have reduced or slowed down gas field development plans as they do not want projects to lie fallow after commissioning.”

Ogaji listed some other challenges of GENCOs to include; Under-utilisation of plant capacity, Idle time, Low productivity; Increase in cost of maintenance (especially when operating below base load);  Inability to meet obligations/commitments;  No returns to the provider of capital;  No provision for asset replacement; and  loss of value (time value of money) due to long outstanding debts. Meanwhile, the NBS, in its Q3’18, report stated that the highest power generated within the period was 90,197 MWH, which was recorded on August 16, while the lowest power generated within the period was 57,357MWH, recorded on July 8. Highest power generated through thermal was 85,948MWH, recorded on July 10, while the least power was 41,864MWH, recorded on September 20. Within the period, highest power generated through hydro was 30,164MWH. It was recorded on August 28, while the least power generated was 11,112MWH, recorded on July 7. According to NBS, Q3 report multi-year tariff order, MYTO, percent load allocation as regards power generation, showed that Ibadan DISCO got the highest   at 13.40 percent, followed by Ikeja DISCO, which got 13.23 percent, while Abuja DISCO came third with 13.04 percent.

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