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Discos Refutes FG’s Claim of 2000MW Unutilized Power Generation Capacity




The Nigerian Electricity Regulatory Commission (NERC) has refuted the continuous claim by the Federal Government (FG) of an unutilized 2000 megawatts (MW) of electricity capacity by the 11 electricity distribution companies (Discos) in Nigeria’s power market.

The Deputy Managing Director of Ibadan Disco, Mr John Ayodele, while speaking at a workshop by NERC in Abuja, on its eligible customers’ regulation, said such claims were according to daily records of power generated and transmitted to the Discos.

Ayodele explained that from the sector’s daily power broadcast, it was difficult to accept the existence of a 2000MW unutilized power generation capacity which the government claims exist because the Discos do not utilised all that is generated in the sector.

“I read the national broadcast and I am still asking myself: is there any stranded 2000 megawatts hiding behind the stories? And I can’t find, and this issue keeps coming up.

“When I look at all plants that are available, when you talk about installed capacity, it is different from capacity that can go on bar. I looked at the broadcast today on maximum generation available, capacity unbarred is 4666 megawatts, while we were generating about 4200 megawatts.

“Available generation that can be made available based on gas turbines that are down or undergoing repairs will never take us to having extra 2000 megawatts,” Ayodele said.

Ayodele, further asked the government to exempt hydro power generation companies (Gencos) from participating in the eligible consumers’ scheme, because according to him, they were not qualified by merit to be in it.

Again, he said that since hydro power Gencos were producing cheaply and their operators did not completely buy them off the government during the 2013 power privatization, there was no need for them to get involved with the eligible customers’ scheme.

“No hydro station should qualify. I believe that if we follow the rules as specified in the regulation, we should not have a problem. No Disco today can say it is against eligible customer because there is no reason why the Disco itself cannot be an eligible customer.”

Ayodele also said, “The merit order should be there, and hydros should be exempted from participating in this. What are they looking for? They are being dispatched 100 per cent, so what else do they want? Nothing because payment will follow, and payment guarantees has been given by the government and it is working. Let us use the rules the way they should apply.”

The Minister of Power, Works and Housing, Babatunde Fashola had earlier said the Federal Government is committed to invest N72 billion for the procurement and installation of equipment to help distribute unused 2000MW of electricity to consumers in the country.

Crude Oil

Brent Crude Oil Approaches $70 Per Barrel on Friday



Crude oil

Nigerian Oil Approaches $70 Per Barrel Following OPEC+ Production Cuts Extension

Brent crude oil, against which Nigerian oil is priced, rose to $69 on Friday at 3:55 pm Nigerian time.

Oil price jumped after OPEC and allies, known as OPEC plus, agreed to role-over crude oil production cuts to further reduce global oil supplies and artificially sustain oil price in a move experts said could stoke inflationary pressure.

Brent crude oil rose from $63.86 per barrel on Wednesday to $69 per barrel on Friday as energy investors became more optimistic about the oil outlook.

While certain experts are worried that U.S crude oil production will eventually hurt OPEC strategy once the economy fully opens, few experts are saying production in the world’s largest economy won’t hit pre-pandemic highs.

According to Vicki Hollub, the CEO of Occidental, U.S oil production may not return to pre-pandemic levels given a shift in corporates’ value.

“I do believe that most companies have committed to value growth, rather than production growth,” she said during a CNBC Evolve conversation with Brian Sullivan. “And so I do believe that that’s going to be part of the reason that oil production in the United States does not get back to 13 million barrels a day.”

Hollub believes corporate organisations will focus on optimizing present operations and facilities, rather than seeking growth at all costs. She, however, noted that oil prices rebounded faster than expected, largely due to China, India and United States’ growing consumption.

The recovery looks more V-shaped than we had originally thought it would be,” she said. Occidental previous projection had oil production recovering to pre-pandemic levels by the middle of 2022. The CEO Now believes demand will return by the end of this year or the first few months of 2022.

I do believe we’re headed for a much healthier supply and demand environment” she said.

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Crude Oil

Oil Jumps to $67.70 as OPEC+ Extends Production Cuts




Oil Jumps to $67.70 as OPEC+ Extends Production Cuts

Brent crude oil, against which Nigerian oil is priced, rose to $67.70 per barrel on Thursday following the decision of OPEC and allies, known as OPEC+, to extend production cuts.

OPEC and allies are presently debating whether to restore as much as 1.5 million barrels per day of crude oil in April, according to people with the knowledge of the meeting.

Experts have said OPEC+ continuous production cuts could increase global inflationary pressure with the rising price of could oil. However, Saudi Energy Minister Prince Abdulaziz bin Salman said “I don’t think it will overheat.”

Last year “we suffered alone, we as OPEC+” and now “it’s about being vigilant and being careful,” he said.

Saudi minister added that the additional 1 million barrel-a-day voluntary production cut the kingdom introduced in February was now open-ended. Meaning, OPEC+ will be withholding 7 million barrels a day or 7 percent of global demand from the market– even as fuel consumption recovers in many nations.

Experts have started predicting $75 a barrel by April.

“We expect oil prices to rise toward $70 to $75 a barrel during April,” said Ann-Louise Hittle, vice president of macro oils at consultant Wood Mackenzie Ltd. “The risk is these higher prices will dampen the tentative global recovery. But the Saudi energy minister is adamant OPEC+ must watch for concrete signs of a demand rise before he moves on production.”

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Gold Hits Eight-Month Low as Global Optimism Grows Amid Rising Demand for Bitcoin



Gold Struggles Ahead of Economic Recovery as Bitcoin, New Gold, Surges

Global haven asset, gold, declined to the lowest in more than eight months on Tuesday as signs of global economic recovery became glaring with rising bond yields.

The price of the precious metal declined to $1,718 per ounce during London trading on Thursday, down from $2,072 it traded in August as more investors continue to cut down on their holdings of the metal.

The previous metal usually performs poorly with rising yields on other assets like bonds, especially given the fact that gold does not provide streams of interest payments. Investors have been jumping on US bonds ahead of President Joe Biden’s $1.9 trillion coronavirus stimulus package, expected to stoke stronger US price growth.

We see the rising bond yields as a sign of economic optimism, which has also prompted gold investors to sell some of their positions,” said Carsten Menke of Julius Baer.

Another analyst from Commerzbank, Carsten Fritsch, said that “gold’s reputation appears to have been tarnished considerably by the heavy losses of recent weeks, as evidenced by the ongoing outflows from gold ETFs”.

Experts at Investors King believed the growing demand for Bitcoin, now called the new gold, and other cryptocurrencies in recent months by institutional investors is hurting gold attractiveness.

In a recent report, analysts at Citigroup have started projecting mainstream acceptance for the unregulated dominant cryptocurrency, Bitcoin.

The price of Bitcoin has rallied by 60 percent to $52,000 this year alone. While Ethereum has risen by over 660 percent in 2021.


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