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Power Generation Drops to 2,662 Megawatts

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PHCN Power Plant
  • Power Generation Drops to 2,662 Megawatts

The Transmission Company of Nigeria (TCN) has said the nation’s power generation capacity dropped from 3,959 megawatts on January 4 to 2,662 megawatts on January 22.

The Nigerian Electricity System Operator (SO) website, a sub agency of TCN, disclosed the figure in its daily forecast on power generation data in Lagos yesterday.

The News Agency of Nigeria (NAN) reported that TCN attributed the drop to low water levels at the hydro power stations and dearth of gas to the power generating companies.

The TCN said the total output of 2,662.20 megawatts from all the generation companies yesterday had been transferred to the 11 distribution companies across the country.

According to the Nigerian Electricity Supply Industry (NESI) operational report for January 4, the power sector hit a peak generation of 4,959 megawatts but dropped to 2,662.20 megawatts on January 22.

NESI said the sector recorded highest system frequency of 51.32Hz and lowest system frequency of 48.52 Hz, while the highest and the lowest voltage recorded on Sunday were 372KV and 300KV, respectively.

An official of TCN who preferred anonymity, said electricity generation had been dwindling due to challenge of accessing gas by generation companies.

The official said low water levels at the country’s hydro thermal stations also contributed to the drop in generation.

He added that most hydro stations are currently confronted with low water challenges to generate energy.

The TCN official said this often caused system collapse when the system scrabbled to distribute energy from the grid to distribution companies and the quantum of energy was not sufficient.

According to him, it is a challenging period for power sector but it will get better once the hydro swing into high water level and gas becomes available.

He attributed the drop in generation to the attack launched against pipeline facilities belonging to the Nigerian Petroleum Development Company, (NPDC), on January 17 around Ugheli in Delta State.

Similarly, a top official of Egbin Power Station, who also pleaded anonymity, said the power plant, with a capacity of 1,320 megawatts now generates 340 megawatts due to gas constraint.

The official said the 340 megawatts Egbin generated was wheeled out to the national grid at 6a.m. yesterday.

The Minister of Power, Works and Housing, Babatunde Fashola, had last Friday said the sabotage of power assets by militants prevented Nigeria from generating 7,000 MW of electricity.

“Today, at its most frugal, the nation’s power grid would support 6,500MW; pushed to its limit, it would carry 7,200MW.

“So it is not true when you hear that the grid capacity is not more than 5,000MW. It is growing every day and more projects are coming up. “We have completed some and more are still coming up. So that is where we are,” Mr. Fashola said at the Nextier Power Dialogue in Abuja  last Friday.

The minister said while power was out due to attacks in one axis, the expansion of either the grid or gas supply was kept alive on another axis and hydro power was also being expanded.

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

Economy

Nigeria’s Big Oil-Refining Revamp Gets Off To A Slow Start

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refineries

Nigeria’s Big Oil-Refining Revamp Gets Off To A Slow Start

A year after shutting down all of its dilapidated refineries to figure out how to fix them, Nigeria still can’t say how much it will cost to do the work or where the money will come from.

Nigerian National Petroleum Corp. said it has finished the appraisal of its largest facility, but hasn’t completed the process at two others. Refining experts said the extended halt means the plants are at risk of rotting away and unlikely to restart on time.

“Things haven’t been looking good lately,” with Nigeria’s plants probably “completely out of action for some 18 months,” said Elitsa Georgieva, Executive Director at Citac, a consultant that specializes in African refining.

The dysfunction of its domestic refineries has long put Africa’s biggest oil producer in an ironic situation. It exports large volumes of crude to plants overseas, then pays a premium to import the fuels its customers produce.

Failed Attempts

Pledges to fix the facilities have been made and broken again and again over the years. For at least a decade, NNPC’s 445,000 barrels a day of refining capacity barely processed 20% of that amount.

The latest effort to fix the refineries was supposed to be different to the failed attempts that came before. The company had totally shut all three plants down by January 2020 to do a comprehensive appraisal, and set the ambitious target of having them all back up and running at 90% of capacity by 2023.

“The refineries have been deliberately shut down to allow for a thorough diagnosis,” said Kennie Obateru, an Abuja-based NNPC spokesman. “They can be fixed based on what the diagnosis reveals.”

The appraisal of the 210,000-barrel-a day Port Harcourt refinery has been completed and NNPC has called for bids for the necessary repairs, Obateru said. The company hasn’t determined how much the work will cost.

“It is when we close the bids, everything is analyzed and presented that we will know how much we need,” he said.

The diagnosis is underway at the 125,000-barrel-a-day Warri facility and should be complete before the end of the year, he said. After that, the study of the 110,000-barrel-a-day Kaduna plant will commence.

Major Challenge

One year into the process, refining analysts are skeptical that all this work can be done by 2023.

“I don’t think anyone has a good understanding technically of what’s wrong with those refineries,” said Alan Gelder, vice president of refining, chemicals and oil markets at Wood Mackenzie Ltd. “They’re probably corroding, which makes it a very difficult proposition.”

NNPC reaffirmed its deadline and said there’s no reason the refineries, which are at least 40 years old, can’t be restored to full operation.

“There are refineries that are over a hundred years old still running, so age is not necessarily an impediment,” Obateru said.

There are parallel efforts backed by private companies to add to Nigeria’s capacity. Aliko Dangote, Africa’s richest person, is building a state-of-the-art 650,000 barrel-a-day refinery, which Citac estimates will start production in 2023.

Bringing NNPC’s Port Harcourt refinery to the same clean-fuel standards as Dangote’s modern plant would cost about $1.3 billion for the equipment, on top of whatever other repairs are required to get the facility running, Georgieva said.

NNPC is talking to oil-trading firms about $1 billion of prepayment deals that could finance the repairs at Port Harcourt, Reuters reported last week. Obateru declined to comment on the report, but said “I don’t envisage that we will have a problem getting people to invest.”

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Economy

Food Inflation Hits Record High of 19.56 Percent in December 2020

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Inflation

Food Inflation Hits Record High of 19.56 Percent in December 2020

Food Index, which measures prices of food items, grew by 19.56 percent in the month of December 2020 amid herdsmen attacks and flooding.

In the latest report from the National Bureau of Statistics (NBS), increases were recorded on Bread and cereals, Potatoes, Yam and other
tubers, Meat, Fruits, Vegetable, Fish and Oils and fats.

On month on monthly basis, the food sub-index rose by 2.05 percent in December 2020, 0.01 percent from 2.04 percent recorded in November 2020.

The average annual rate of change of the Food sub-index for the twelve-month period ending December 2020 over the previous twelve-month average was 16.17 percent, 0.42 percent points from the average annual rate of change recorded in November 2020 (15.75) percent” the report stated.

Headline inflation number increased by 15.75 percent in the month of December 2020, up from 14.89 percent.

The report noted that increases were recorded in all COICOP divisions that yielded the Headline index.

On a month-on-month basis, “the urban index rose by 1.65 percent in December 2020, same as the rate recorded in November 2020, while the rural index also rose by 1.58 percent in December 2020, up by 0.02 percent above the rate that was recorded in November 2020 (1.56 percent).

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Economy

Nigeria’s Inflation Rate Rises to 15.75 Percent in December

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inflation

Nigeria’s Inflation Rate Rises to 15.75 Percent in December

Inflation rate in Africa’s largest economy, Nigeria, rose at the fastest pace in several months in the last month of 2020, according to the latest report from the National Bureau of Statistics (NBS).

Consumer Price Index (CPI), which measures inflation rate, increased by 15.75 percent year-on-year in December 2020, representing a 0.86 percent increment from the 14.89 percent attained in November.

On a monthly basis, headline inflation rose by 1.61 percent in the month of December, representing 0.01 percent increase from the 1,60 percent posted in the month of November.

Food gauge that measures prices of items in Africa’s largest economy increased by 19.56 percent in December from 18.30 percent in November.

NBS attributed the increase to the surge in prices of Bread and cereals, Potatoes, Yam and other tubers, Meat, Fruits, Vegetable, Fish and Oils and fats.

On a monthly basis, the food sub-index grew by 2.05 percent in December 2020, an increase of 0.01 percent points from 2.04 percent recorded in November 2020.

The more stable annual rate showed Food sub-index over the last 12 months increased by 0.42 percent points from 15.75 percent in November to 16.17 percent in December.

Herdsmen attacks, the rising cost of fuel, flooding and the wide exchange rate are some of the key factors impacting the cost of food items in Nigeria, especially in December when demands were the highest.

Still lack of enough fiscal buffer to cushion the effect of COVID-19 and ease forex scarcity also drag on raw materials necessary for the production of some import-dependent items.

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