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Power Generation Tumbles 18 Months After 5,074MW Peak

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  • Power Generation Tumbles 18 Months After 5,074MW Peak

The nation’s power generation has been struggling to stay above the 3,000 megawatts mark more than a year after it hit a peak of 5,074.70MW, despite the reported increase in gas supply to power plants.

Electricity generation in the country has continued to hover between 2,000MW and 4,000MW in recent months.

The nation achieved its peak generation of 5,074.70MW on February 2, 2016, according to the Transmission Company of Nigeria.

But the improvement was short-lived as generation dropped below the 4,000MW mark later that month following militant attack of the Forcados pipeline.

The downturn in power generation was exacerbated in May last year by the several attacks on oil and gas installations in the Niger Delta, which made generation to plunge to a new low of 1,400MW on May 17, according to the TCN.

Total power generation, which dropped to as low as 2,563MW last month, stood at 3,229.8MW on August 16 from 2,447MW on August 5, the latest data obtained on Friday by our correspondent from the Ministry of Power, Works and Housing stated.

The nation’s unutilised generation capacity stood at 2,750.2MW as of August 16, with 2,325.3MW due to frequency management occasioned by load demand by distribution companies, the report stated.

The report also showed that six power plants were not generating any megawatt of electricity that day.

The idle plants were given as Afam IV & V, Gbarain II, Ibom Power, AES, ASCO and Rivers IPP.

Electricity generation from the nation’s biggest power station, Egbin, located in Lagos, stood at 362MW as of 6am on August 16.

The power grid, which has suffered 13 total collapses this year, experienced its latest (partial) collapse on July 19.

At the Afam IV & V, units GT1 to 12 have been de-commissioned and scrapped; GT13 to 16 out on blade failure; GT17 and 18 out due to burnt generator transformer, and GT19 and 20 awaiting major overhaul.

Gbarain II’s GT2 was said to be out for frequency management, while the AES has been out of production since September 27, 2014.

Unit GT1 of ASCO has been shut down due to leakage in the furnace while Rivers IPP has been out of production since September 16, 2016.

Last month, the Nigerian National Petroleum Corporation reported that the average national daily gas supply to the nation’s power plants rose by 64 per cent in May.

It said the average gas supply to power plants of 729 million standard cubic feet of gas per day in May was 63.74 per cent higher than the daily gas supply to the plants, of 446mmscfd, during the same month in 2016.

The Executive Secretary, Association of Power Generation Companies, Dr. Joy Ogaji, recently announced that electricity producers were owed over N500bn by the market, adding that this had made it difficult for some of the Gencos to pay their gas suppliers.

Ogaji said, “For us to be able to procure gas, we need money. Gas companies are owed several billions by us. We are being owed nearly N600bn and we own gas companies nearly N200bn.”

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Economy

Nigeria’s Plan to Review Oil Companies’ Gas Flaring Strategies

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Nigeria is ramping up its efforts to address environmental concerns in the oil and gas sector with a comprehensive plan to review gas flaring strategies of international and indigenous oil companies.

The Minister of State for Environment, Dr. Iziaq Salako, announced this initiative during a national stakeholders engagement meeting on methane mitigation and reduction held in Abuja, Investors King reports.

Gas flaring, a common practice in the oil industry, releases methane—a potent greenhouse gas—into the atmosphere, contributing to climate change and posing health risks to communities near oil facilities.

Nigeria aims to end routine gas flaring by 2030, aligning with global climate goals and commitments.

Dr. Salako explained the importance of reducing methane emissions and highlighted the detrimental effects on public health, food security, and economic development.

He outlined practical steps being taken to tackle methane emissions, including the development of methane guidelines and the engagement of government institutions.

The ministry, through the National Oil Spill Detection and Response Agency, will conduct periodic reviews of oil companies’ plans to ensure compliance with the gas flaring deadline.

Deloitte management consultants will assist in conducting comprehensive forensic audits to scrutinize the legitimacy of forward-contracted transactions.

President Bola Tinubu’s commitment to environmental sustainability underscores the government’s dedication to addressing climate change and fulfilling its multilateral environmental agreements.

The engagement event served as a platform for stakeholders to discuss methane mitigation strategies, existing policies, and implementation challenges.

Collaboration and dialogue among diverse sectors are crucial in charting a unified course towards sustainable methane reduction in Nigeria’s oil and gas industry.

As the country navigates its environmental agenda, ensuring accountability and transparency in gas flaring practices remains paramount for achieving a greener and healthier future.

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Economy

Interest Rate Jumps to 24.75% as CBN Takes Aggressive Stance Against Inflation

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Dr. Olayemi Michael Cardoso

The Central Bank of Nigeria (CBN) has announced a significant increase in the monetary policy rate, known as the interest rate, to 24.75%.

This move disclosed by CBN Governor Olayemi Cardoso during the 294th Meeting of the Monetary Policy Committee press briefing in Abuja, represents a bold step by the apex bank to address the mounting inflationary pressures faced by the country.

With inflation soaring to 31.70% in February, the CBN aims to moderate this upward trend by tightening its monetary policy stance.

This decision follows the previous hike in the interest rate to 22.75% in February, showcasing the CBN’s commitment to combatting inflationary forces.

While the bank opted to maintain the Cash Reserve Ratio at 45%, the significant increase in the interest rate underscores the urgency of the situation and the need for decisive action.

Governor Cardoso emphasized that these measures are essential to stabilize the economy and safeguard the purchasing power of the Nigerian currency.

The 294th MPC marks the second meeting under Governor Cardoso’s leadership, indicating a proactive approach to addressing economic challenges.

The next MPC meeting is scheduled for May 20th and 21st, 2024, highlighting the ongoing commitment of the CBN to navigate Nigeria’s economic landscape amidst inflationary pressures.

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Economy

Nigeria Braces for 10th Consecutive Interest Rate Hike by Central Bank

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Central Bank of Nigeria (CBN)

As Nigeria grapples with persistently high inflation, the Central Bank of Nigeria (CBN) is gearing up to implement its tenth consecutive interest rate hike in a bid to curb the soaring prices and attract investment.

Analysts surveyed by Bloomberg are anticipating a substantial 125 basis-point increase in the key rate to 24%, marking one of the most significant adjustments in the current tightening cycle.

The decision, expected to be announced by Governor Olayemi Cardoso on Tuesday at 2 p.m. in Abuja, comes on the heels of inflation accelerating to 31.7% in February, far surpassing the central bank’s target range of 9%.

This surge has been primarily attributed to the sharp depreciation of the naira, prompting authorities to devalue the currency twice since June to narrow the gap with the unofficial market rate and encourage investor confidence.

While these measures have seen the naira strengthen in recent days and bolstered investment inflows, including a fourfold increase in overseas remittances and significant foreign investor portfolio asset purchases, there remains a palpable need for more decisive action.

Giulia Pellegrini, a senior portfolio manager at Allianz Global Investors, emphasized the necessity for the CBN to intensify its tightening efforts to regain foreign investors’ confidence in the local bond market.

While acknowledging the positive strides made by the central bank, Pellegrini stressed the importance of a more assertive approach to prevent the diversion of investor attention to other frontier markets.

As the Nigerian economy navigates through these challenging times, the impending interest rate hike signals the CBN’s determination to address inflation head-on and foster a more stable economic environment.

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