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Power Grid Records 10 Collapses Amid Zero Backup Capacity

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Power - Investors King
  • Power Grid Records 10 Collapses Amid Zero Backup Capacity

The nation’s power grid has suffered its ninth total system collapse this year amid a lack of spinning reserve that is meant to forestall such occurrences.

This year, the national grid has so far recorded 10 collapses – nine total, while one was partial, the latest data obtained by our correspondent from the Ministry of Power, Works and Housing on Friday showed.

According to the Nigerian Electricity Regulatory Commission, a total system collapse means total blackout nationwide, while partial system collapse is a failure of a section of the grid.

The latest total collapse occurred on Tuesday, September 4, 2018, while total electricity generation stood at 2,982.60 megawatts as of 6am on that day, down from 3,276MW on September 1.

The output from the nation’s power plants rose to 3,204.80MW on Wednesday, but fell to 2.915.90MW on Thursday, according to the data from the ministry.

A total generation capacity of 3,894.2MW was unavailable as of 6am on Thursday, compared to 4,187.30MW MW on September 1.

Gas constraints and low load demand by the distribution companies left 1,538.5MW and 2,355.70MW, respectively idle.

Our correspondent gathered that the power grid would remain vulnerable without adequate spinning reserves.

Spinning reserve is the generation capacity that is online but unloaded and that can respond within 10 minutes to compensate for generation or transmission outages.

Out of the five power stations meant to provide spinning reserves, none had any actual reserve as of 6am on Thursday, with the contracted reserve put at 295MW.

The power stations are Egbin, Delta, and the three built under the National Integrated Power Project scheme, namely Olorunsogo II, Geregu II and Omotosho II.

The regulator, NERC, had in its Third Quarter 2017 report highlighted the need for adequate proactive measure (adequate spinning reserves) to prevent the system from being destabilised.

It said, “The commission is determined to provide all regulatory intervention necessary to ensure that the Transmission Company of Nigeria procures sufficient spinning reserves.

“Thus, the commission is currently evaluating the adequacy of the already procured ancillary services (e.g. spinning reserves) by the transmission company in order to make sufficient provision during the next tariff review.”

It noted that based on the provisions of the grid code, the system frequency, under normal circumstances, was expected to be between a lower limit of 49.75Hz and an upper limit of 50.25Hz, while the range from 48.75 to 49.75Hz and from 50.25Hz to 51.25 were regarded as lower and upper stress boundaries, respectively.

The commission said it was well determined to provide the necessary regulatory interventions to ensure that the system frequency was kept within the statutory limits.

It stated, “Frequency fluctuation and other harmonic distortion result in poor power quality that could damage sensitive industrial machines that are connected at high voltage level. The commission is working with the TCN to ensure that system voltage and frequencies operate within the statutory limits.

“The financial liquidity of the electricity industry remains as the most significant challenge affecting the sustainability of the power sector. The major contributors to the financial crisis in the industry are tariff deficits, high technical and commercial losses exacerbated by customer apathy arising from estimated billing and poor quality of supply in most load centres.”

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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Oil

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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