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Electricity Supply Drops to 3,800MW

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  • Electricity Supply Drops to 3,800MW

After what seems like an improvement in power generation in recent weeks, supply dropped to an average of 3,800 megawatts yesterday, investigation has revealed.

Before yesterday’s drop, average daily supply had exceeded 4,000 megawatts, with daily peak generation hitting 4,452 megawatts on March 23.

The daily operational report of the power sector showed that peak generation was 4,199.50 megawatts on March 30 and 4,244.70 on March 31.

However, on April 1, the situation worsened as peak generation was 3,995.60 while 3,491.40 was the lowest generation, according to the operational report.

The situation showed no significant improvement yesterday as an average of 3,800 megawatts was allocated to the 11 distribution companies, while 3,897.40 megawatts was sent to the grid by 06 a.m. yesterday, according to data by the Nigeria Electricity System Operator, an arm of the Transmission Company of Nigeria (TCN).

As power generation continues the cyclic rise and drop, the generation and distribution companies (DISCOS) have blamed poor supply on gas shortages and grid instability caused by weak transmission infrastructure; the TCN blamed the Discos for rejecting power allocated to them.

However, gas suppliers have argued that there is enough gas to generate power but that the generation companies (Gencos) cannot pay for gas.

But the Gencos have insisted that they are not able to pay for gas because they are being owed for the power they generated into the national grid.

The Managing Director of Egbin Power Plc, Mr. Dallas Peavey, had reportedly threatened to shut down operations this week as a result of non-settlement of N110 billion debt; inadequate gas supply and what the company called the inefficiency in operations of the TCN.

He told journalists recently that the country was heading towards another blackout as liquidity, transmission and gas supply issues had forced the 1,320MW capacity Egbin to be generating only 350MW at the moment.

Peavy insisted that Egbin had hit a generation of 1,100 megawatts but that the grid could not take the power because of the capability issues within the TCN system.

“We are constrained and limited to generate about 350MW daily due to both TCN system operations and inadequate gas supply issues. So, 70 per cent of our output is lost because available power can’t be evacuated. When you get good news from TCN that you can increase your generation, we will be faced with not ‘enough gas; and when there is gas, you have TCN issues,” Peavey reportedly said.

He said another challenge was the inadequate gas supply to generate at optimal capacity as well as the huge debts owed the company by the Nigerian Bulk Electricity Traders (NBET) and Market Operator.

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.

Crude Oil

Oil Jumps to $67.70 as OPEC+ Extends Production Cuts

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Oil Jumps to $67.70 as OPEC+ Extends Production Cuts

Brent crude oil, against which Nigerian oil is priced, rose to $67.70 per barrel on Thursday following the decision of OPEC and allies, known as OPEC+, to extend production cuts.

OPEC and allies are presently debating whether to restore as much as 1.5 million barrels per day of crude oil in April, according to people with the knowledge of the meeting.

Experts have said OPEC+ continuous production cuts could increase global inflationary pressure with the rising price of could oil. However, Saudi Energy Minister Prince Abdulaziz bin Salman said “I don’t think it will overheat.”

Last year “we suffered alone, we as OPEC+” and now “it’s about being vigilant and being careful,” he said.

Saudi minister added that the additional 1 million barrel-a-day voluntary production cut the kingdom introduced in February was now open-ended. Meaning, OPEC+ will be withholding 7 million barrels a day or 7 percent of global demand from the market– even as fuel consumption recovers in many nations.

Experts have started predicting $75 a barrel by April.

“We expect oil prices to rise toward $70 to $75 a barrel during April,” said Ann-Louise Hittle, vice president of macro oils at consultant Wood Mackenzie Ltd. “The risk is these higher prices will dampen the tentative global recovery. But the Saudi energy minister is adamant OPEC+ must watch for concrete signs of a demand rise before he moves on production.”

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Gold

Gold Hits Eight-Month Low as Global Optimism Grows Amid Rising Demand for Bitcoin

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Gold Struggles Ahead of Economic Recovery as Bitcoin, New Gold, Surges

Global haven asset, gold, declined to the lowest in more than eight months on Tuesday as signs of global economic recovery became glaring with rising bond yields.

The price of the precious metal declined to $1,718 per ounce during London trading on Thursday, down from $2,072 it traded in August as more investors continue to cut down on their holdings of the metal.

The previous metal usually performs poorly with rising yields on other assets like bonds, especially given the fact that gold does not provide streams of interest payments. Investors have been jumping on US bonds ahead of President Joe Biden’s $1.9 trillion coronavirus stimulus package, expected to stoke stronger US price growth.

We see the rising bond yields as a sign of economic optimism, which has also prompted gold investors to sell some of their positions,” said Carsten Menke of Julius Baer.

Another analyst from Commerzbank, Carsten Fritsch, said that “gold’s reputation appears to have been tarnished considerably by the heavy losses of recent weeks, as evidenced by the ongoing outflows from gold ETFs”.

Experts at Investors King believed the growing demand for Bitcoin, now called the new gold, and other cryptocurrencies in recent months by institutional investors is hurting gold attractiveness.

In a recent report, analysts at Citigroup have started projecting mainstream acceptance for the unregulated dominant cryptocurrency, Bitcoin.

The price of Bitcoin has rallied by 60 percent to $52,000 this year alone. While Ethereum has risen by over 660 percent in 2021.

 

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Crude Oil

Oil Prices Extend Gains to $64.32 Ahead of OPEC+ Meeting

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Oil Prices Rise to $64.32 Amid Expected Output Extension

Oil prices extended gains during the early hours of Thursday trading session amid the possibility that OPEC+ producers might not increase output at a key meeting scheduled for later in the day and the drop in U.S refining.

Brent crude oil, against which Nigeria oil is priced, gained 0.4 percent or 27 cents to $64.32 per barrel as at 7:32 am Nigerian time on Thursday. While the U.S West Texas Intermediate gained 19 cents or 0.3 percent to $61.47 a barrel.

“Prices hinge on Russia’s and Saudi Arabia’s preference to add more crude oil production,” said Stephen Innes, global market strategist at Axi. “Perhaps more interesting is the lack of U.S. shale response to the higher crude oil prices, which is favourable for higher prices.”

The Organization of the Petroleum Exporting Countries (OPEC) and allies, together known as OPEC+, are looking to extend production cuts into April against expected output increase due to the fragile state of the global oil market.

Oil traders and businesses had been expecting the oil cartel to ease production by around 500,000 barrels per day since January 2021 but because of the coronavirus risk and rising global uncertainties, OPEC+ was forced to role-over production cuts until March. Experts now expect that this could be extended to April given the global situation.

“OPEC+ is currently meeting to discuss its current supply agreement. This raised the spectre of a rollover in supply cuts, which also buoyed the market,” ANZ said in a report.

Meanwhile, U.S crude oil inventories rose by more than a record 21 million barrels last week as refining plunged to a record-low amid Texas weather that knocked out power from homes.

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