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Power Generation Drops to 108MW Over Heavy Rainfall, Others



  • Power Generation Drops to 108MW Over Heavy Rainfall, Others

The national electricity grid witnessed another collapse on Tuesday that resulted in the drop in power generation from over 3,000 megawatts to just 108.7MW.

This is coming as the Federal Government signed Put and Call Option Agreements with two power firms, Afrinergia and CT Cosmos, for the construction of 50MW and 70MW solar power plants, respectively.

Industry data obtained by our correspondent showed that power generation plunged from 3,069.5MW on April 8, 2017 to 108.7MW on April 9, and moved up marginally to 240MW the next day.

It was learnt that heavy rainfall at three transmission stations led to load reduction that prompted high frequency in the system, a development that triggered the collapse of the electricity grid, the first to be recorded in the second quarter of this year.

Investigation revealed that the country’s electricity grid collapsed 10 times in the first quarter of this year.

Tuesday’s report on the April 9 system collapse stated that the rainfall affected the Onitsha, Benin and Alaoji transmission stations, leading to a cumulative load reduction of 384MW in the affected areas.

It stated, “There was heavy rainfall reported from Onitsha T/S, Benin T/S and Alaoji T/S, which led to area load reduction from 70MW to 15MW, 100MW to 20MW and 300MW to 51MW, respectively.

“This led to a rise in system frequency and voltage, which subsequently resulted in the transmission line tripping as indicated in reports from the stations. At 06:21hours, the system frequency sharply dropped from 51.03Hertz to 47.48Hz followed by the system collapse.”

The development, according to officials of the Power ministry, worsened electricity supply in many areas during the period as the average power sent out on April 9 fell by 698MW-hour/hour to 2,638MWh/h.

Meanwhile, it was learnt that the two firms that signed the PCOAs with the Federal Government on Tuesday were among 14 companies that had earlier signed Power Purchase Agreements with the Nigerian Bulk Electricity Trading Plc to generate up to 1,125MW of solar power.

The signing of the PCOAs by the two firms was the next stage after the PPAs were signed at a ceremony presided over by the Minister of Power, Works and Housing, Babatunde Fashola, in Abuja on Tuesday.

The latest agreements serve as indemnity for the project promoters to go ahead with their construction and ultimately bring their power to the grid.

According to the agreement, Afrinergia is to construct a 50MW solar farm in Nasarawa State, while CT Cosmos’ 70MW solar power project will be sited in Plateau State.

Fashola said the PCOA signing was in furtherance of the plan to generate at least 30 per cent of Nigeria’s electricity from renewable energy sources.

The Managing Director of Afrinergia, Mr. Bestman Uwadia, stated that the signing of the agreement would give his company the confidence to conclude the solar plant located in Onyi, Kokona Local Government Area of Nasarawa State.

He said the company could transmit the first ever solar power into Nigeria’s national grid in the next six months.

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

Oil Dips Below $62 in New York Though Banks Say Rally Can Extend




Oil Dips Below $62 in New York Though Banks Say Rally Can Extend

Oil retreated from an earlier rally with investment banks and traders predicting the market can go significantly higher in the months to come.

Futures in New York pared much of an earlier increase to $63 a barrel as the dollar climbed and equities slipped. Bank of America said prices could reach $70 at some point this year, while Socar Trading SA sees global benchmark Brent hitting $80 a barrel before the end of the year as the glut of inventories built up during the Covid-19 pandemic is drained by the summer.

The loss of oil output after the big freeze in the U.S. should help the market firm as much of the world emerges from lockdowns, according to Trafigura Group. Inventory data due later Tuesday from the American Petroleum Institute and more from the Energy Department on Wednesday will shed more light on how the Texas freeze disrupted U.S. oil supply last week.

Oil has surged this year after Saudi Arabia pledged to unilaterally cut 1 million barrels a day in February and March, with Goldman Sachs Group Inc. predicting the rally will accelerate as demand outpaces global supply. Russia and Riyadh, however, will next week once again head into an OPEC+ meeting with differing opinions about adding more crude to the market.

“The freeze in the U.S. has proved supportive as production was cut,” said Hans van Cleef, senior energy economist at ABN Amro. “We still expect that Russia will push for a significant rise in production,” which could soon weigh on prices, he said.


  • West Texas Intermediate for April fell 27 cents to $61.43 a barrel at 9:20 a.m. New York time
  • Brent for April settlement fell 8 cents to $65.16

Brent’s prompt timespread firmed in a bullish backwardation structure to the widest in more than a year. The gap rose above $1 a barrel on Tuesday before easing to 87 cents. That compares with 25 cents at the start of the month.

JPMorgan Chase & Co. and oil trader Vitol Group shot down talk of a new oil supercycle, though they said a lack of supply response will keep prices for crude prices firm in the short term.

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Crude Oil

Oil Prices Rise With Storm-hit U.S. Output Set for Slow Return



Crude oil

Oil Prices Rise With Storm-hit U.S. Output Set for Slow Return

Oil prices rose on Monday as the slow return of U.S. crude output cut by frigid conditions served as a reminder of the tight supply situation, just as demand recovers from the depths of the COVID-19 pandemic.

Brent crude was up $1.38, or 2.2%, at $64.29 per barrel. West Texas Intermediate gained $1.38, or 2.33%, to trade at $60.62 per barrel.

Abnormally cold weather in Texas and the Plains states forced the shutdown of up to 4 million barrels per day (bpd) of crude production along with 21 billion cubic feet of natural gas output, analysts estimated.

Shale oil producers in the region could take at least two weeks to restart the more than 2 million barrels per day (bpd) of crude output affected, sources said, as frozen pipes and power supply interruptions slow their recovery.

“With three-quarters of fracking crews standing down, the likelihood of a fast resumption is low,” ANZ Research said in a note.

For the first time since November, U.S. drilling companies cut the number of oil rigs operating due to the cold and snow enveloping Texas, New Mexico and other energy-producing centres.

OPEC+ oil producers are set to meet on March 4, with sources saying the group is likely to ease curbs on supply after April given a recovery in prices, although any increase in output will likely be modest given lingering uncertainty over the pandemic.

“Saudi Arabia is eager to pursue yet higher prices in order to cover its social break-even expenses at around $80 a barrel while Russia is strongly focused on unwinding current cuts and getting back to normal production,” said SEB chief commodity analyst Bjarne Schieldrop.

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Crude Oil

Crude Oil Rose Above $65 Per Barrel as US Production Drop Due to Texas Weather




Crude Oil Rose Above $65 Per Barrel as US Production Drop Due to Texas Weather

Oil prices rose to $65.47 per barrel on Thursday as crude oil production dropped in the US due to frigid Texas weather.

The unusual weather has left millions in the dark and forced oil producers to shut down production. According to reports, at least the winter blast has claimed 24 lives.

Brent crude oil gained $2 to $65.47 on Thursday morning before pulling back to $64.62 per barrel around 11:00 am Nigerian time.

U.S. West Texas Intermediate (WTI) crude rose 2.3 percent to settle at $61.74 per barrel.

“This has just sent us to the next level,” said Bob Yawger, director of energy futures at Mizuho in New York. “Crude oil WTI will probably max out somewhere pretty close to $65.65, refinery utilization rate will probably slide to somewhere around 76%,” Yawger said.

However, the report that Saudi Arabia plans to increase production in the coming months weighed on crude oil as it can be seen in the chart below.

Prince Abdulaziz bin Salman, Saudi Arabian Energy Minister, warned that it was too early to declare victory against the COVID-19 virus and that oil producers must remain “extremely cautious”.

“We are in a much better place than we were a year ago, but I must warn, once again, against complacency. The uncertainty is very high, and we have to be extremely cautious,” he told an energy industry event.

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