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EU, Germany May Support Power Sector Metering Programme

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European Stocks
  • EU, Germany May Support Power Sector Metering Programme

The European Union (EU) and Germany may consider supporting the implementation of the Meter Assets Providers (MAP) programme and eligible customers regulation of the Nigerian Electricity Regulatory Commission (NERC).

MAP Regulations set to provide standard rules to encourage the development of independent and competitive metering services in the Nigeria Electricity Supply Industry (NESI), with the NERC saddled with the licencing of pre-qualified providers who will finance, install, maintain and where necessary, replace end-user electricity meters.

The revelation on EU and Germany’s possible support in the MAP programme is coming as an impact investment firm in the off grid electricity market, All On disclosed yesterday that with about 60 million petrol and diesel generators currently in use in Nigeria, the economy has become largely uncompetitive and unproductive.

The firm, with links to multinational oil company, Shell Petroleum Development Company (SPDC) also stated that about 70 per cent of Nigeria’s households or small businesses are currently off the national grid or affected by bad electricity supplies.

According to All On, these households or businesses rely on the estimated 60 million generators to power their operations and homes, adding that the development has created an unhealthy energy source.

In her presentation at an energy business dialogue organised in Abuja by the Nigerian Renewable Energy Roundtable (NiRER), an offshoot of the Nigerian Economic Summit Group (NESG), the Senior Investment Associate at All On, Mrs. Ujunwa Ojemeni, explained that 120 million people do not have access to electricity in Nigeria.

She added that 60 million fossil fuel generating sets were now filling the energy gap in the country.

Ojemeni stated that the 60 million generators in the country have negative consequences in the country’s economic productivity, competitiveness, employment and security.

She added that the country’s ability to guarantee food security, health, education and healthy environment for its citizens were impacted negatively by this huge number of fossil fuel generating sets in use.

According to her, All On is leveraging finance for the Nigerian off grid energy sector, and would be looking to drive long-lasting impact in the sector through its impact funding model.

At the parley, it emerged that the European Union (EU) and Germany may consider supporting the implementation of the Meter Assets Providers (MAP) scheme and eligible customers regulation of the Nigerian Electricity Regulatory Commission (NERC).

The likely EU, German support will be extended in their next round of financial support for the country’s power sector under the Nigerian Energy Support Programmme (NESP).

The NESP is however managed by the German cooperation agency – the Deutsche Gesellschaft fur Internationale Zusammenarbeit GmbH (GIZ), and has supported the power sector to grow its capacities and offerings for years now.

The Head of Unit for Sustainable Energy Access at the NESP, Mr. Carlos Louis-Miro, disclosed at the meeting that the NESP funded by EU and Germany could consider using parts of the €33 million budgeted in the next phase of the NESP to support the deployment of meters by electricity distribution companies (Discos) under the MAP scheme of the NERC, as well as the implementation of the eligible customers regime.

Louis-Miro, said that funding for the second phase of the NESP would come in the form of €20 million from the EU and €13 million from Germany, to support competitive procurement of large-scale solar power generation; stabilisation of the country’s distribution networks and improvement of the Discos’ business models.

He also said: “We may cover as well eligible customers, Meter Asset Provider; Independent Electricity Distribution Networks (IEDN)/franchising.”

According to him, the country’s Discos are currently bedeviled with technical and financial challenges.

“For many years, grid extended for political reasons using constituency funds. Some grids cannot be operated commercially by Discos at present MYTO. Discos do not have any incentive in investing in these loss-making grids.

“As a result, these grids suffer from unreliable supply. This situation will continue, unless alternatives are found,” he noted.

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

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Oil

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.

PRICES

  • 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

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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

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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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