February 19, 2024

Power Distribution Companies (DisCos) have resorted to rationing as data revealed that Nigeria is currently experiencing almost 16, 000megawatts power deficit despite having so far; issued generation licenses to 40 Generation Companies (GenCos).

Data sourced from the Independent System Operator by Channels Television on National Peak Demand Forecast on Monday revealed that the country requires nothing less than 19798MW to reach sufficiency.

However, generation by the GenCos as of Sunday was a meagre 3860.3MW, leaving a deficit of 15,938MW.

The development comes on the heels of current power rationing by DisCos across the country.

As of Sunday; only 16 out of 40 GenCos were generating to the grid at 3860.3MW with Egbin Power completely off the grid. The biggest generators were Azura-Edo IPP (420MW), Kainji Hydro (415MW) and Shiroro Hydro (275.73MW).

The depleting power supply situation has continued following the recent systems collapse and after the Transmission Company of Nigeria, TCN said it had restored power supply across the country.

Low gas supply to power has also worsened generation as gas producers have cited a debt of over $1.3bn for past supplies.

Although the government had at the beginning of the year agreed to pay electricity subsidies of N1.6tn in 2024 to the Nigerian Electricity Supply Industry, NESI, just N450bn was provided for in the budget.

The country as of 2022 boasted 29 GenCos. However, to boost power generation, NERC in a report released in February 2023 said it licensed 11 new companies, bringing the total plants connected to the national grid to 40.

NERC at that time did not reveal the names of the new electricity generating companies and their capacities, however; the previous 29 GenCos with a 13,461MW combined capacity could not generate up to 5000MW.

Despite the Systems Operator forecasting a national peak demand of 19798MW, experts say Nigeria requires at least 30, 000MW to reach electricity sufficiency.

On their part, DisCos disclosed to consumers that the rationing was caused by low allocation.

Abuja Electricity Distribution Company, AEDC, said: “We would like to inform you that we are aware of the unstable power supply experienced in recent times essentially caused by insufficient power allocation to us.

“This has constrained us to implement load curtailment directives across our franchise to manage the situation for grid stability. This will involve occasional temporary interruption of power supply to certain areas for a limited period. We understand the inconvenience this may cause and sincerely apologise for this disruption. We are working diligently to minimise the impact of these outages”.

Also, Ibadan Electricity Distribution Company, IBEDC, informed its customers that “the drop in electricity supply currently being experienced is due to generation shortfall as a result of gas shortage to the generating companies.

“We are working with stakeholders in the electricity value chain on a sustainable resolution. We sincerely apologise for the inconvenience and appeal for your understanding”, it added.

The power woes have persisted following recent clamour for the resignation of the Power Minister, Adebayo Adelabu over the low power supply.

In response, the Minister last week revealed that no payment had been made to gas suppliers for January, compounding the liquidity challenges facing the industry.

The Minister noted “The persistent liquidity issues coming from inappropriate tariff regime, poor collections and inadequate funding of government subsidies leading to huge debts owed to the transmission, generation and gas supply companies.

“This has restricted investments required for sustaining supply flow, capacity expansion and infrastructural improvements. It has also not only discouraged lending to the sector by financial institutions as the sectoral activities are not bankable but has also made the sector unattractive to new investors”.

According to him; some of the solutions being considered by the government include “settlement of existing sectoral outstanding debt obligations to the gas supply and power generation companies using partly cash payment and guaranteed debt instruments. N1.3 trillion is current debts to the GenCos and $1.3 billion legacy debts to the GenCos.