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Business & Finance

Power Distribution Firms Reject Supply From Generating Plants

Babatunde Fashola
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The rejection of load allocations from power generating plants by some electricity distribution companies is one of the factors preventing the country from fully benefitting from the 6,500 megawatts generation capacity of the existing power plants.

Our correspondent gathered that some power plant units were being shut due to high frequency occasioned by the inability of the distribution companies to pick their load allocations.

For instance, the nation lost about 2,821.5MW of electricity generation on Monday partly due to the rejection of loads by the Discos, it was exclusively gathered from top industry sources.
The nation’s electricity generation as of 6.00am on Monday stood at 3,548.7MW, while the combined generation capacity of the power plants was put at 6,370.2MW.

Some of the plants affected by the load rejection or low load demand were Shiroro, Jebba, Egbin, Okpai and Afam VI.

Others are plants under the National Integrated Power Project, including Alaoji, Odukpani and Ihovbor.

Shiroro and Jebba saw their generation levels reduce to 200MW and 260MW, compared to capacities of 300MW and 341MW, respectively. Odukpani generated 60.1MW instead of its capacity of 360MW; Egbin, 820MW (880MW); Alaoji, 51.5MW (117MW); Ihovbor, 78.4Mw (109MW); Okpai, 282MW (366MW); and Afam VI, 378MW (555MW).

The General Secretary, National Union of Electricity Employees, Mr. Joe Ajaero, had claimed in a statement on Monday that the real saboteurs of the power sector were those who refused allocations from the national grid for onward distribution to consumers.

A former top executive in one of the power firms explained to our correspondent that a distribution company could decide to reject load due to low revenue generation from a segment of its customer base.

The Managing Director and Chief Executive Officer, Eko Electricity Distribution Company, Mr. Oladele Amoda, told our correspondent in a telephone interview that load rejection could be as a result of capacity issues between the transmission and distribution networks.

He said, “In some cases, there is no enough transmission equipment capacity to wheel power to the Discos. Sometimes, the Discos also do have issues; that is when there is powerful wind, which, sometimes, leads to tripping of the breaker. But it doesn’t take time before that is restored.

“Everybody knows that the weakest link in the power value chain is transmission. So, the blame cannot be put solely on the Discos.”

According to Amoda, the nation’s transmission network cannot wheel more than 6,000MW, while the distribution networks nationwide can take more than 10,000MW.

“At Eko Disco, we are not rejecting load. We are not even getting up to our allocated percentage because of constraints on the transmission equipment,” he said, adding that the company had spent more than N11bn on network rehabilitation and reinforcement, among others.

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Amoda said the government was working on improving the transmission capacity, noting that the Transmission Company of Nigeria had been starved of funds for a very long time.

“The government is looking into how to quickly strengthen it financially and with all the provisions that it will require to quickly ramp up its capacity,” he stated.

The Managing Director/Chief Executive Officer, Nigerian Bulk Electricity Trading Plc, Mr. Rumundaka Wonodi, said, “When the Discos reject load allocation, the question is why are they rejecting it? It could be that their system is weak, which is why we keep talking about the need for investment.

“When this (load rejection) happens, it has an effect all through the value chain because generation companies cannot generate power and maybe they have ‘take or pay’ obligation on their gas supply; so, they have to pay for gas that they did not utilise at that time.”

The Chairman, Egbin Power Plc, Mr. Kola Adesina, said the talk that the Discos were rejecting allocation was an indication that there was a major problem far more significant than frequency and pressure of gas.

“There is no justification for somebody to reject power. You need power to make money. You need money to be able to pay your loan, to be able to continue to service the system. So, nobody will naturally want to do that,” he said.

The spokesperson for the Kano Electricity Distribution Company, Mr. Muhammed Kandi, said, “In Kano Disco, we do not drop load. In fact, we don’t get enough allocation; so why should we even drop load in the first place?”

He explained that the company only received about 260MW on Tuesday morning, compared to a maximum energy demand of 600MW.

The Acting Chief Executive Officer, Nigerian Electricity Regulatory Commission, Mr. Anthony Akah, said, “Clearly, the issue of load rejection has been addressed by the commission. Under the new regime, that is the Transitional Electricity Market, the distribution companies can no longer reject load that is within the allocation level that they are supposed to get.

“If it is due to the constraint of the distribution companies, they will be penalised for that. If it is the transmission company, it will also have to be penalised. That essentially has been taken care of, unless there are other reasons behind why it happened.”

The Chief Executive Officer, Association of Nigerian Electricity Distributors, Mr. Azu Obiaya, said, “It is irrational that anyone of these Discos will reject load right now because they desperately need the power to, first of all, meet their revenue requirements as well as distribute to their customers.”


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