Connect with us

Markets

DisCos Fault Govt’s Directive on Generation Below Optimal Level

Published

on

Power - Investors King
  • DisCos Fault Govt’s Directive on Generation Below Optimal Level

Electricity Distribution Companies (DisCos) have faulted the National Control Centre’s (NCC’s) directive to generation companies (GenCos) to generate electricity below optimal level.

They said it is a major hindrance to the nation’s drive towards efficient power supply. This, they argued, is because of the low transmission capacity in the country.

Association of Electricity Distributors (ANED) Research and Advocacy Executive Director, Mr. Sunday Oduntan, who spoke with reporters in Lagos at weekend, said while DisCos and its umbrella body, ANED were not interested in any controversies in the sector, ANED would continue to demand adequate power supply for Nigerians.

He said: “We want Nigerians to know that the distribution capacity of all the 11 DisCos is 6, 288megawatts (Mw). This is according to the Transmission Company of Nigeria (TCN) stress test that was conducted in 2015.

“This is not our figure, this is the figure from the TCN side. Now, what we are getting from them is far too low than what we are supposed to be getting.”

Only last week, the GenCos threatened to shut their plants over repeated directives by the NCC to generate below optimal level.

Association of Power Generation Companies (APGC) Executive Secretary, Dr Joy Ogaji, said the GenCos were facing lower capacity utilisation having to operate their plants far from the baseline settings to as low as about 50 per cent of total available power capacity.

Citing last April, Ogaji said daily, the GenCos had an average capacity of 7, 484 Mw, but that the Transmission Company of Nigeria (TCN) transmitted only an average of 3985 Mw, about 53 per cent of the available capacity.

ANED said the implication of this trend in power generation is that DisCos “are not able to supply enough power to (our) customers and we are now making Nigerians to be aware that the shortage of power supply or lack of power is due to TCN’s constraints and persistent outages from the TCN’s interface. The GENCOs have actually confirmed that”.

Oduntan urged the government to address the transmission bottlenecks, noting that the development is negative for DisCos’ business and customers.

He said: “What we are having is a suppressed tariff regime that is not cost reflective. A tariff that was calculated on the wrong assumption that by 2018, we would be generating over 7,000Mw. The absence of that level of generation means that we are having more shortfalls in the market. The situation is now far worse than when we are getting far lower than expected from TCN.”

Meanwhile, Ibadan Electricity Distribution Company (IBEDC) said it has invested over N11.5 billion in metering, network upgrade and rehabilitation, among others.

Its Managing Director/Chief Executive Officer, Mr. John Donnachie, who spoke through the firm’s Chief Operating Officer, Mr. John Ayodele, spoke when the management took business and energy reporters on facility tour of the DisCo in Ibadan at the weekend.

Some of the facilities visited include the Asset and Customer Enumeration, Raymond Zard’s 500mva transformer, Ibadan North 15mva injection substation and a warehouse with uninstalled customer meters and statistical meters for transformer including supplies from a local manufacturer – Momas Electricity Meters Manufacturing Company Limited (MEMMCOL).

Donnachie said: “As part of our unwavering commitment to our mission to distributing power, changing lives, we have in the past six months invested over N11.5 bllion in major capital projects. These span across our franchise area covering – Oyo, Ogun, Osun, Kwara; parts of Kogi, Niger and Ekiti States.

“These projects are major game changers for IBEDC as a business and for our esteemed customers, which have significantly improved our service delivery, quality and quantity of power supply”.

He said: ‘’Recently, we commenced the procurement and supply of 10,000 distribution transformer (DT) meters at a cost of N4billion. These DT Meters will greatly reduce the challenge of estimated bills and ensure customers without meters are billed more accurately through its energy audit, accounting functionalities, and above all, assist in our technical, commercial and collection (TC&C) losses.

“In line with reducing the incidence of estimated bills, we have commenced our meter roll out with a first batch of 48,470 energy meters of various ratings and capacities. This includes 35,000 single-phase, 12,000 three-phase, 1,470 whole current, C.T-Operated and Statistical Meters all at a sum of N3.1 billion, ahead of the meter asset provider (MAP) initiative being finalised by the Nigerian Electricity Regulatory Commission (NERC) and the DisCos.

“The continuous metering of maximum demand (MD) customers is also in place with the deployment of 13 high voltage energy meters and delivery of 912 low voltage maximum demand energy meters at a cost of N405 million. To further support the huge metering expenditure, we have invested extensively in the supply and installation of Advanced Metering Infrastructure (AMI) systems at over N1 billion, this investment is critical to optimally implement the functionalities of DT Meters. As we speak, we have recently received 95 per cent of credited advance payment for metering implementation (CAPMI) meters for deployment for those that paid.

“To further reduce safety related accidents and to achieve Vision Zero and Safety Culture of IBEDC, the Board has awarded a whopping sum of N1.47 billion for a major overhaul of the Health, Safety and Environment department. The project will deliver on over 60 critical need areas with major focus on procurement and deployment of PPEs, IPEs, signages, labels and symbols. Furthermore, the project is expected to map the layouts of 114 substations to develop conceptual site models, training on emergency techniques, solid waste and hazardous management programme, production of occupational health and safety environmental policies and framework for all technical and non-technical staff. In addition, it will, ultimately, aid us in attaining the certification required, thereby making us an internationally recognised health hazard compliant organisation,” Donnachie said.

The ongoing Asset and Customer Enumeration estimated at N5 billion has started across the franchise and is scheduled for completion early next year.

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.

Continue Reading
Comments

Gold

Gold Steadies After Initial Gains on Reports of Israel’s Strikes in Iran

Published

on

gold bars - Investors King

Gold, often viewed as a haven during times of geopolitical uncertainty, exhibited a characteristic surge in response to reports of Israel’s alleged strikes in Iran, only to stabilize later as tensions simmered.

The yellow metal’s initial rally came on the heels of escalating tensions in the Middle East, with concerns mounting over a potential wider conflict.

Spot gold soared as much as 1.6% in early trading as news circulated regarding Israel’s purported strikes on targets in Iran.

This surge, reaching a high of $2,400 a ton, reflected the nervousness pervading global markets amidst the saber-rattling between the two nations.

However, as the day progressed, media reports from both countries appeared to downplay the impact and severity of the alleged strikes, contributing to a moderation in gold’s gains.

Analysts noted that while the initial spike was fueled by fears of heightened conflict, subsequent assessments suggesting a less severe outcome helped calm investor nerves, leading to a stabilization in gold prices.

Traders had been bracing for a potential Israeli response following Iran’s missile and drone attack over the weekend, raising concerns about a retaliatory spiral between the two adversaries.

Reports of an explosion in Iran’s central city of Isfahan further added to the atmosphere of uncertainty, prompting flight suspensions and exacerbating market jitters.

In addition to geopolitical tensions, gold’s rally in recent months has been underpinned by other factors, including expectations of US interest rate cuts, sustained central bank buying, and robust consumer demand, particularly in China.

Despite the initial surge followed by stabilization, gold remains sensitive to developments in the Middle East and broader geopolitical dynamics.

Investors continue to monitor the situation closely for any signs of escalation or de-escalation, recognizing gold’s role as a traditional safe haven in times of uncertainty.

Continue Reading

Commodities

Global Cocoa Prices Surge to Record Levels, Processing Remains Steady

Published

on

cocoa-tree

Cocoa futures in New York have reached a historic pinnacle with the most-active contract hitting an all-time high of $11,578 a metric ton in early trading on Friday.

This surge comes amidst a backdrop of challenges in the cocoa industry, including supply chain disruptions, adverse weather conditions, and rising production costs.

Despite these hurdles, the pace of processing in chocolate factories has remained constant, providing a glimmer of hope for chocolate lovers worldwide.

Data released after market close on Thursday revealed that cocoa processing, known as “grinds,” was up in North America during the first quarter, appreciating by 4% compared to the same period last year.

Meanwhile, processing in Europe only saw a modest decline of about 2%, and Asia experienced a slight decrease.

These processing figures are particularly noteworthy given the current landscape of cocoa prices. Since the beginning of 2024, cocoa futures have more than doubled, reflecting the immense pressure on the cocoa market.

Yet, despite these soaring prices, chocolate manufacturers have managed to maintain their production levels, indicating resilience in the face of adversity.

The surge in cocoa prices can be attributed to a variety of factors, including supply shortages caused by adverse weather conditions in key cocoa-producing regions such as West Africa.

Also, rising demand for chocolate products, particularly premium and artisanal varieties, has contributed to the upward pressure on prices.

While the spike in cocoa prices presents challenges for chocolate manufacturers and consumers alike, industry experts remain cautiously optimistic about the resilience of the cocoa market.

Despite the record-breaking prices, the steady pace of cocoa processing suggests that chocolate lovers can still expect to indulge in their favorite treats, albeit at a higher cost.

Continue Reading

Crude Oil

Dangote Refinery Leverages Cheaper US Oil Imports to Boost Production

Published

on

Crude Oil

The Dangote Petroleum Refinery is capitalizing on the availability of cheaper oil imports from the United States.

Recent reports indicate that the refinery with a capacity of 650,000 barrels per day has begun leveraging US-grade oil to power its operations in Nigeria.

According to insights from industry analysts, the refinery has commenced shipping various products, including jet fuel, gasoil, and naphtha, as it gradually ramps up its production capacity.

The utilization of US oil imports, particularly the WTI Midland grade, has provided Dangote Refinery with a cost-effective solution for its feedstock requirements.

Experts anticipate that the refinery’s gasoline-focused units, expected to come online in the summer months will further bolster its influence in the Atlantic Basin gasoline markets.

Alan Gelder, Vice President of Refining, Chemicals, and Oil Markets at Wood Mackenzie, noted that Dangote’s entry into the gasoline market is poised to reshape the West African gasoline supply dynamics.

Despite operating at approximately half its nameplate capacity, Dangote Refinery’s impact on regional fuel markets is already being felt. The refinery’s recent announcement of a reduction in diesel prices from N1,200/litre to N1,000/litre has generated excitement within Nigeria’s downstream oil sector.

This move is expected to positively affect various sectors of the economy and contribute to reducing the country’s high inflation rate.

Furthermore, the refinery’s utilization of US oil imports shows its commitment to exploring cost-effective solutions while striving to meet Nigeria’s domestic fuel demand. As the refinery continues to optimize its production processes, it is poised to play a pivotal role in Nigeria’s energy landscape and contribute to the country’s quest for self-sufficiency in refined petroleum products.

Moreover, the Nigerian government’s recent directive to compel oil producers to prioritize domestic refineries for crude supply aligns with Dangote Refinery’s objectives of reducing reliance on imported refined products.

With the flexibility to purchase crude using either the local currency or the US dollar, the refinery is well-positioned to capitalize on these policy reforms and further enhance its operational efficiency.

Continue Reading
Advertisement




Advertisement
Advertisement
Advertisement

Trending