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Power Generating Firms Perform Below 30% – Report



The Minister of Power, Works and Housing, Babatunde Fashola
  • Power Generating Firms Perform Below 30%

The combined performance of all the privatised thermal power generating stations in the country was less than 30 per cent in the third quarter of 2016 despite being managed by private investors.

Industry operators blamed the poor performance of the power generating stations on the recurrent vandalism of pipelines that supply gas to the facilities.

An analysis of the performances of the privatised thermal power plants in the months of July, August and September showed that the Delta, Geregu 1, Sapele 1, Egbin and Olorunsogo 1 performed poorly in the period under review, as none of them could supply up to 50 per cent of their electricity generation capacities to the national grid.

Industry data obtained by our correspondent in Abuja revealed that the contributions of the privatised thermal plants to the national electricity grid in July, August and September were 27.42 per cent, 28.25 per cent and 29.22 per cent, respectively.

Their combined average electricity delivery to the grid in the third quarter of this year was 28.29 per cent, regardless of the fact that they were being managed by private entities since their official handing over to investors in November 2013.

A further analysis of the industry showed that the hydro power generating stations contributed more to the country’s electricity grid in the period under review, as they supplied 34.25 per cent of the electricity.

The National Integrated Power Plants contributed 13.42 per cent of electricity to the grid during the three-month period, while the independent power producers supplied 24.05 per cent of electricity in the third quarter.

On their monthly performances, industry data showed that in July, the three hydro power stations, Shiroro, Jebba and Kainji, contributed 33.15 per cent to the national electricity grid.

In the same month, the seven IPPs namely: Omoshoto 1 & 2; Afam VI, which is operated by Shell; Okpai; Ibom Power; Rivers and Paras contributed 28.09 per cent, while the privatised thermal power stations in Delta, Geregu 1, Sapele 1, Egbin and Olorunsogo 1 provided 27.42 per cent.

Also, the NIPPs, which include Sapele 2, Geregu 2, Odukpani, Ihovbor and Gbarain contributed 11.35 per cent in July.

In August, the three hydro power stations made a combined contribution of 36.64 per cent to the national grid, which was a marginal rise from the 33.15 per cent recorded in July.

In the same month, the privatised thermal plants contributed 28.25 per cent of the power in the national electricity system, as against the 27.42 per cent in July, while the NIPP plants upped their contribution to 13.31 per cent in August from 11.35 per cent recorded in the preceding month.

A reduced contribution came from the independent power producers as their contribution was 21.8 per cent in August compared to 28.09 per cent in July.

For September, the contribution of the hydro power stations dropped to 32.95 per cent, while there was a slight increase in the contribution of the privatised thermal power stations as they provided 29.22 per cent of electricity to the grid.

Also, there was an increase in the contribution of the NIPPs and the IPPs as they supplied 15.59 per cent and 22.24 per cent electricity respectively to the national grid in September.

The Managing Director, Frontier Oil Limited, one of the major suppliers of gas to the gas-fired power plants, Mr. Dada Thomas, told our correspondent that the vandalism of gas pipelines had drastically impacted the supply of the product to the power plants.

This, he said, had contributed immensely to the poor performance of the privatised thermal power plants across the country.

Thomas said, “Why are people blowing up gas lines? It is suicide to blow up gas lines and it can be classified as an economic sabotage, because when you do that, everybody suffers. People in the Niger Delta suffer, those in Lagos suffer as well as others in Kano, for such acts cut down electricity supply.”

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and, with over a decade experience in the global financial markets.

Crude Oil

COVID-19 Plunges Nigeria’s Oil Revenue by 41% in the First Nine Months of 2020




COVID-19 Plunges Nigeria’s Oil Revenue by 41% in the First Nine Months of 2020

Nigeria’s oil revenue declined by 41.44 percent in the first nine months of 2020 to $2.033 billion, according to the latest data from the Nigerian National Petroleum Corporation, NNPC.

This represents a decline of 41.44 percent from $3.47 billion filed in the same period of 2019 when there was no COVID-19.

In the September 2020 edition of NNPC’s Monthly Financial and Operations Report (MFOR), revenue from oil and gas rose by 16 percent to $120.49 million in the month of September, a 66 percent or $234.81 million drop from $355.3 million posted in the same month of 2019.

The global lockdowns caused by the COVID-19 pandemic plunged Nigeria’s crude oil sales and global demand for the commodity. This was further compounded by Nigeria’s high cost of production compared to Saudi Arabia, Russia and others that were offering discounts to boost sales during one of the most challenging periods in human history.

Experts like Prof. Yinka Omorogbe, President of Nigeria Association of Energy Economics, NAEE, were not surprised with the drop in earnings given the effect of COVID-19 on the world’s economy.

She, however, called for the revamp of the nation’s petroleum sector laws and diversification of the economy away from oil revenue dependence. She said “Covid-19 made 2020 a very hot year and it battered the oil industry internationally and we are not an exception; so we could not have been unaffected”.

She also said the effect of the fall “is definitely a wake-up call; we have to diversify, strengthen our other resources and capabilities”.

Omorogbe, a former NNPC Board Secretary, urged the government and the operators in the sector to look inward and think strategically, stating: “think medium term, think of where they want to be and the government, above all, must think of how best we can utilize our resources, so that we can achieve our objectives once we know and define them.

“It is a clear wake-up call, if not we will just sit here and find that we have become one of the poorest nations in the world”, she noted.

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Crude Oil, Other Commodities Closing Price for Monday



Crude oil

Crude Oil, Other Commodities Closing Price for Monday

Brent crude oil, Nigeria’s crude oil benchmark, gained 47 cents to $55.88 per barrel on Monday, while the US crude oil expanded by 50 cents to $52.77 per barrel.

Gold for February delivery fell $1 to $1,855.20 an ounce. Silver for March delivery fell 7 cents to $25.48 an ounce and March copper was little changed at $3.63 a pound.

The dollar fell to 103.80 Japanese yen from 103.83 yen. The euro fell to $1.2139 from $1.2167.

Wholesale gasoline for February delivery rose 1 cent to $1.56 a gallon. February heating oil rose 2 cents to $1.59 a gallon. February natural gas rose 16 cents to $2.60 per 1,000 cubic feet.

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Gold Gained Ahead of Joe Biden Inauguration 2021




Gold Gained Ahead of Joe Biden Inauguration 2021

Gold price rose from one and a half month low on Tuesday ahead of President-elect Joe Biden’s inauguration on Wednesday.

The precious metal, largely regarded as a haven asset by investors, edged up by 0.2 percent to $1,844.52 per ounce on Tuesday, up from $1,802.61 on Monday.

According to Michael McCarthy, the Chief Market Strategies, CMC Markets, the surged in gold price is a result of the projected drop in dollar value or uncertainty.

He said, “The key factor appears to be the (U.S.) currency.”

As expected, a change in administration comes with the change in economic policies, especially taking into consideration the peculiarities of the present situation. In fact, even though Biden, Janet Yellen and the rest of the new cabinet are expected to go all out on additional stimulus with the support of Democrats controlled Houses, economic uncertainties with rising COVID-19 cases and slow vaccine distribution remained a huge concern.

Also, the effectiveness of the vaccines can not be ascertained until wider rollout.

Still, which policy would be halted or sustained by the incoming administration remained a concern that has forced many investors to once again flee other assets for Gold ahead of tomorrow’s inauguration.

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