Power: Discos Settle Fines as FG Reconnects Firms

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  • Power: Discos Settle Fines as FG Reconnects Firms

The Federal Government has reconnected three power distribution companies to the national grid and has lifted the suspension it slammed on the power firms after the Discos paid the stipulated fines attached to the infractions they committed, as well as fixed the deficiencies in their respective systems.

The affected power firms include Enugu, Eko and Ikeja Discos, as it was further learnt that the Nigerian Electricity Regulatory Commission had yet to give approval for the procurement of spinning reserve, despite receiving a request for it over six months ago.

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.

The Managing Director, Transmission Company of Nigeria, a firm fully owned by Federal Government, Usman Mohammed, who spoke on the spinning reserve issue, stated in Abuja on Thursday that the three Discos were disconnected from the grid for failing to comply with the market rules.

He, however, noted that they were reconnected after they cleared the deficiencies in their systems and settled the penalties that followed.

In June this year, the Federal Government, through TCN, ordered the disconnection of the three Discos from the national grid over “non-compliance with the conditions of market rules.”

But reacting to this in Abuja, Mohammed said, “The suspension of the three Discos was due to the fact that their security had elapsed and they did not replace it. They were suspended from the market according to the market rules to ensure that we don’t allow this kind of thing to happen again.

“Now after their suspension and what we achieved based on that, I’ll like to tell you that they have put or fixed all the deficiencies that they have and they have also paid the penalty that they are supposed to pay. That is how to make a market work.”

On the issue of spinning reserve, he said, “We have successfully worked out how to get 250MW of spinning reserve. Now is that adequate? The answer is no. With the average generation of about 4,000 megawatts, the spinning reserve is supposed to be 10 per cent and that is 400MW.

“But when we advertised for the procurement of spinning reserve and generators responded, we realised that what we can procure conveniently is only 250MW. Also, it is not every generator that has the capacity to provide to spinning reserve. A generator that cannot respond quickly cannot provide a spinning reserve.”

Mohammed added, “So 250MW spinning reserve is not enough but it is better because it will further stabilise the grid and make the grid more stable than what it is now. We forwarded the spinning reserve request to NERC in December 2018 and up till today, we have not received approval. We are still calling for us to have a spinning reserve in order to further stabilise the grid.”

The TCN boss also stated that the company had been struggling with frequency control since May 2 this year, adding that this was because of the weak distribution network in Nigeria.

“So, once it starts raining, most of the distribution networks will start to collapse and as a result frequency management becomes a big issue,” he stated.

About the Author

Samed Olukoya
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 long experience in the global financial market. Contact Samed on Twitter: @sameolukoya; Email: [email protected]

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