Joseph Bakare
The Niger Delta Power Holding Company (NDPHC) Limited has raised concerns over the dismal uptake of electricity from the electricity market saying this is significantly weighing down its operations.
Managing Director of NDPHC, Engr. Jennifer Adighije in a statement in Abuja also explained that gas supply challenges, transmission constraints as well as close to N600 billion debt being owed the company by Nigeria Bulk Electricity Trading (NBET) and other bilateral entities are hindering the company’s operations.
She disclosed that the new management has worked assiduously to resuscitated five turbine units across Calabar, Omotosho, Sapele, Ihovbor plants that were erstwhile offline, which now contribute additional 625MW megawatts to the national grid.
“NDPHC currently has mechanically available generation capacity of about 2,000MW that is significantly stranded due to transmission constraints, gas supply and gas transportation limitations in addition to dwindling offtake by the distribution companies (DisCos).
Over the years, the NIPP plants are utilized by the system operator to carry out primary frequency response enabling power grid stability. These ancillary services ought to be monetized in line with the grid code and industry regulations. However, NIPP plants are ordered to startup and shut down at the prerogative of the system operator without any form of compensation thus leading to low utilization of capacity and operational stress on the generating turbine units.
“As you know, in accordance with the grid code, we are placed on restrictions for a number of reasons, from inadequate transmission grid availability – although this is being seriously addressed by the Honourable Hinister of Power, Chief Bayo Adelabu- to low demand from the downstream electricity market. It is important to note that power generation is driven by demand, and therefore, if the demand isn’t made, the plants will not generate. In certain cases when the demand arises, there is inadequate dispatch corridor or wheeling capacity through the grid network.
“In spite of these limitations, NDPHC continues to spearhead transmission grid expansion plan and distribution network interventions to enable power generation to be delivered to the last mile underserved communities” she stressed. Since inception of NIPP, NDPHC has invested over 500 Billion Naira in Transmission projects – Transformers, Transmission Sub-stations, switch gears, switch yards, transmission lines, line bay extensions and several world-class projects currently being operated by the TCN.
On Alaoji Power Plant, Adighije noted that dispute over gas supply metering with the gas supplier led to the shut down of the station but that it will become functional again before the end of this year as significant steps have been taken to restore the Gas Metering Station (GMS) to provide a lasting solution to gas losses to the plant.
She stated that the company had severally made attempts to enter into a Power Purchase Agreement (PPA) with the Nigerian Bulk Electricity Trading (NBET) to no avail, which would have improved NDPHC’s merit order in the dispatch priority schedule. This has impacted the company very negatively financially and further exacerbates the stranded capacity of the company.
“Currently, NDPHC is placed in the least priority bucket for dispatch in spite of its available daily dispatch capacity of about 2,000MW.
“By no small measure, NDPHC remains the largest fleet of generating turbine units in the sector, conversely, much of that capacity remains stranded due to these impediments that constrain the company from generating optimally.”
Adighije said the company was leveraging on the Order issued by the Nigerian Electricity Regulatory Commission (NERC), on bilateral agreements to sell its stranded power and should soon conclude some deals with off-takers.
Engr. Adighije, explained that the company currently has a generation capacity in excess of demand from the National Grid, and is thus prioritizing direct supply to bilateral and eligible customers to commercialise its stranded capacity.
She also reiterated that the strategy of the new management seeks to unlock that stranded energy by dedicating significant portions of it now to eligible customers and bilateral trading arrangements pursuant to the July 25th order of the NERC directing generation companies now to trade bilaterally with eligible customers and that should be able to address our stranded capacity”.