- 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.
Silver Joins Haven Assets That Pullback on Dollar Strength
Silver Pulls Back on Dollar Strength
Silver pulled back on Friday after Donald Trump-led administration announced it was working on a new stimulus package to ease economic burden of the American people.
The United States dollar gained as investors jumped on it to hedge against US-China trade tensions.
Silver that has risen to almost eight years high of $29.84 on Thursday pulled back after the US government announced its plan on a new stimulus package.
The haven asset, like Gold, pulled back to $27.97 on Friday during the New York trading session.
“While there are no early chart clues to suggest the gold and silver markets are close to major tops, both are now getting short-term overbought, technically, and are due for downside corrections in the uptrends,” Kitco Metals senior analyst Jim Wyckoff said in a note.
“And remember that with the higher volatility and bigger daily price gains seen at present, there will also be bigger downside corrections when they come.”
Gold Pullback on Dollar Strength on Friday
Gold Pauses its Bullish Runon Dollar Strength
Gold pulled back from its record rally on Friday after the US dollar received a boost from the new stimulus.
The world’s safe-haven asset pulled back from $2074 per ounce it traded on Thursday to $2030 on Friday during the New York trading session.
“We’ll see some pullback (in gold) from these levels with USD bottoming for a while and maybe even see some strength in the USD in the near term, which will reverse these gains but not entirely,” said Spencer Campbell, director at SE Asia Consulting Pte Ltd. “People will be looking to re-enter the market on any pullbacks in precious metals as the medium to longer term views are significantly higher.”
Gold rose to an all-time high of $2074 on Thursday after rising over 35 percent on the back of the COVID-19 pandemic. However, economic uncertainties due to the second wave of COVID-19 continues to support gold rally and expected to continue until a concrete solution or vaccine is discovered.
“There are mixed signals that the economy is recovering and some of the signs of recovery are relatively superficial as they show aggregate figures and not how medium and small enterprises continue to suffer,” said Jeffrey Christian, managing partner of CPM Group.
“We have a very long way to go before we see a proper economic recovery.”
Finances of International Oil Companies Suffered in the Second Quarter
Finances of IOCs Plunged Amid COVID-19 Pandemic in the Second Quarter
Global leading oil companies suffered substantial losses in the second quarter, according to their various financial statements published in recent weeks.
On Thursday, Royal Dutch Shell posted $18.9 billion loss in the second quarter of 2020, far below the profit of $3.5 billion posted in the same quarter of 2019.
This, the company attributed to the plunge in global oil prices in 2020 due to the COVID-19 pandemic. Shell warned that oil demand remained uncertain, adding that it had cut its exploration plans for this year from about 77 wells to just 22.
This was after the price of Brent crude oil plunged to $15 per barrel during the peak of COVID-19 pandemic while the price of West Texas Intermediate crude oil dipped to -$37 per barrel, the lowest on record.
Also, the company said it has reduced its capital expenditure for the year from the initial $25 billion to $20 billion amid a plunge in revenue and demand for the commodity.
Similarly, ExxonMobil reported a $1.1 billion loss, its biggest decline on record. The oil company also announced it would be lowing spending by 30 percent in 2020 to about $23 billion.
Among the various oil companies posting negative financial statements for the quarter was Chevron Corporation, the company reported $8.3 billion decline in the second quarter of the year. The lowest ever posted by the oil giant in almost three decades.
Chevron, therefore, warned that the havoc caused by COVID-19 pandemic in the energy sector might continue to weigh on earnings.
“While demand and commodity prices have shown signs of recovery, they are not back to pre-pandemic levels, and financial results may continue to be depressed into the third quarter of 2020,” Chevron’s Chairman and Chief Executive Officer, Michael Wirth, said.
News1 month ago
British High Commission to Start Accepting Visa Applications From Nigerians Soon
Business1 month ago
Seplat Appoints Emeka Onwuka as CFO, Executive Director
Finance1 month ago
DSS Arrests EFCC, Acting Chairman, Magu
Forex1 month ago
Naira-USD Exchange Rate to Hit N430 – Report
Government1 month ago
FG Puts School Resumption Plan on Hold as COVID-19 Cases Hit 30,000
Business2 months ago
Dangote, MTN Lead Africa’s Most Admired Brands in 2020
Business3 weeks ago
Nneka Ede Purchases Portuguese Football Club, Lusitano Ginasio Clube
Business1 month ago
West African Consumer Sentiment Reflects Global Uncertainty