- NERC Encouraging Discos to Take Less Power —Gencos
Electricity generation companies in the country have said distribution companies are taking less power than what they (Gencos) are willing to sell because of an “obnoxious new capacity definition” introduced by the Nigerian Electricity Regulatory Commission.
The Gencos stated this on Wednesday through their umbrella body, the Association of Power Generation Companies, while reacting to a recent statement by the Discos that daily energy sent out by the Gencos had averaged 3,453 megawatts since privatisation.
The Executive Secretary, APGC, Dr Joy Ogaji, said the new capacity definition was “entrenched in the enabling TEM Supplementary Order No. NERC/15/0011 dated 18th March, 2015” by NERC in 2015 as part of its preparation for the Transitional Electricity Market.
Ogaji quoted the regulator as saying, “GenCos without effective PPAs shall be paid for their delivered energy and delivered capacity by NBET (delivered capacity for the purposes of this order means the capacity equivalent of the energy delivered at the Gencos busbar).”
He noted that NERC went on to direct that the metered energy be converted into capacity for billing.
She said, “This regulatory directive, on a monthly basis, brings down the actual billable mobilised Gencos’ capacity, leading to the Discos being billed less. It is believed that this reduction of capacity during billing was instigated by the Discos and the regulator approved of it.
“In layman’s terms, this redefinition of capacity by NERC means that if a Genco declares 500MW as available on any day and the grid or the Transmission Company of Nigeria only nominates to take 100MW, which to a large extent is based on what the Discos want to take and distribute, that Genco will only be paid energy and the capacity equivalent of 100MW and is left to bear the capacity cost of making available the remaining 400MW.
“How can any country grow its power base on this flawed and lopsided regulation that penalises/punishes a generator for investing to increase its available capacity! This lopsided regulation inadvertently provides support for any Disco to decide and take less and less power that is available and still crave/lobby for a higher tariff.”
According to Ogaji, Gencos’ available capacities are backed up by committed fuel, manpower, insurance, service contracts and all the necessary resources.
She said, “The Genco makes its day-ahead declaration of how much it can generate (available capacity) for that given date and the System Operator nominates the capacity it can dispatch/transmit based on the availability of the grid and Discos’ demand.
“In every electricity market, this nominated capacity is paid for and with consideration for the suppressed capacity as prompted by SO’s instructions; a reasonable return on capital invested in the business is a critical incentive for continued improvement in the technical capacity as well as the quality of service.
Ogaji said, “The current state of the market, where a generation company is short-changed for the benefit of other market participants, negates the tenets of the Multi-Year Tariff Order, a tariff model for incentive-based regulation that seeks to reward performance above certain benchmarks, reduces technical and non-technical/commercial losses.”
Nigeria’s Presidential CNG Initiative Allocates N100bn for CNG Buses and EV Adoption
The Presidential Compressed Natural Gas (CNG) Initiative has allocated N100 billion to expedite the deployment of CNG buses nationwide, according to a statement released on Wednesday.
The initiative, designed to catalyze an Auto-gas and Electric Vehicle (EV) revolution in mass transit and transportation, aims to enhance sustainability and cost-effectiveness.
The statement revealed that the fund would be instrumental in supporting the adoption of auto-gas and electric vehicles, signaling a commitment to a more sustainable and economical future in the transportation sector.
The Presidential CNG Initiative plans to leverage over 11,500 CNG and electric-fueled vehicles, along with the deployment of 55,000 conversion kits.
This strategic approach is intended to reduce transportation costs for Nigerians and mitigate the challenges posed by the rising cost of living.
Under the Renewed Hope Agenda, the Presidential CNG Initiative is dedicated to realizing the President’s vision, guided by its steering committee led by FIRS Chairman Zacch Adedeji.
The statement highlighted recent achievements, including strategic technical partnerships and the ongoing commissioning of CNG Conversion centers in key states such as Lagos, Abuja, Kaduna, Ogun, and Rivers.
Several more centers are slated for commissioning in the coming weeks, reflecting the initiative’s momentum and commitment to achieving its objectives.
Nigeria’s Power Transformation: 53 Projects Worth N122bn on Track for May 2024 Completion
The Central Bank of Nigeria (CBN), in collaboration with the Transmission Company of Nigeria (TCN) and power distribution companies, is set to complete 53 power projects by May next year.
Valued at N122 billion, these projects aim to add over 1,000 megawatts to TCN’s wheeling capacity.
During a recent tour of three ongoing projects in Lagos, TCN’s Programme Coordinator, Mathew Ajibade, assured that the projects were not abandoned, refuting speculations.
He confirmed that work is progressing smoothly and is expected to be completed by May 2024, as initially planned.
Assistant Director/Head of Infrastructure Finance Office at the CBN, Tumba Tijani, highlighted the CBN’s support for the power sector, revealing that the bank released a loan at a 9% interest rate in August last year for the projects.
The funding, part of the Nigeria Electricity Market Stabilisation Facility-3, amounts to N122,289,344 and aims to address transmission/distribution bottlenecks, enhance supply to end-users, and unlock unutilized generation capacity.
Tijani disclosed that N85.43 billion has been disbursed into the Advance Payment Guarantee account of the 53 contractors responsible for executing the projects.
The comprehensive project list includes the delivery of power transformers, re-conductoring existing transmission lines, upgrading existing substations, and constructing 33KV line bays.
The initiative reflects a concerted effort to enhance Nigeria’s power infrastructure and meet growing energy demands.
Nigeria’s Untapped Coffee Sector Holds the Key to $2 Billion Annual Revenue
Amidst declining foreign reserves and the need for alternative revenue streams, Nigeria’s overlooked coffee industry emerges as a potential powerhouse capable of contributing over $2 billion annually to foreign exchange earnings.
Industry experts emphasize the necessity for strategic investments and modernized farming practices to unlock the full economic potential of the coffee sector.
While Nigeria is not among the top 10 coffee producers in Africa, the country’s untapped coffee industry holds the promise of significant financial gains, job creation, and sustainable agricultural development.
The urgency for revitalization comes as Nigeria grapples with a decline in foreign reserves, dropping from $38.25 billion in September 2022 to $33.23 billion in the third quarter of 2023.
Salihu Imam, Chairman of the National Coffee and Tea Association of Nigeria, Oyo State, highlighted the global significance of coffee, stating, “Coffee is the second most traded/valuable of all commodities and first in Agricultural commodities in the world.”
The potential economic impact extends beyond immediate financial gains, with Nigeria positioning itself as a key player in the global coffee trade.
Despite its potential, Nigeria’s coffee exports remain modest, producing less than one million bags annually.
In contrast, Ethiopia, the largest coffee exporter in Africa, is projected to produce 8.25 million bags. Experts suggest that Nigeria, with its unique coffee varieties, could generate $2 billion annually.
Segun Lary-Lean, President of the West Africa Specialty Coffee Association, emphasized the robust global demand for coffee, comparing it to water in Western countries.
He noted the significant earnings of coffee-producing nations like Brazil, Colombia, Vietnam, and Kenya, which experienced a 17% increase in coffee earnings.
In a call to action, industry players urge the Federal Government to prioritize strategic investments, modernized farming practices, and value-added processing to harness the coffee sector’s full economic benefits.
Unlocking the potential of Nigeria’s coffee industry stands not only as a financial opportunity but as a catalyst for broader economic growth and diversification.
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