The management of Niger Delta Power Holding Company (NDPHC) Limited, says the staggering N600 billion debt owed by the Nigeria Bulk Electricity Trading (NBET), along with other challenges, is severely hampering its operations.
NDPHC’s Managing Director, Jennifer Adighije, said this in a statement in Abuja on Sunday through her Technical Adviser (Media), Mr Adesanya Adejokun,
Adighije added that gas supply challenges, transmission constraints as well as other bilateral entities were hindering the company’s operations.
She, however, noted that the new management had worked diligently to revive five previously offline turbine units across the Calabar, Omotosho, Sapele, and Ihovbor power plants, which had collectively added 625 megawatts (MW) 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 Electricity Distribution Companies (DisCos),”she said.
The managing director said that over the years, the national integrated power projects (NIPP) plants were utilised by the system operator to carry out primary frequency response enabling power grid stability.
Adighije said that these ancillary services ought to be monetised in line with the grid code and industry regulations.
According to her, the 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 utilisation 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 Minister of Power, Mr Adebayo 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,”she said.
Adighije said that in spite of these limitations, NDPHC continued to spearhead transmission grid expansion plan and distribution network interventions to enable power generation to be delivered to the underserved communities.
According to her, since inception of NIPP, NDPHC has invested over N500 billion in transmission projects .
These include, transformers, transmission sub-stations, switch gears, switch yards, transmission lines, line bay extensions and several world-class projects currently being operated by the Transmission Company of Nigeria.
Adighije noted that dispute over gas supply metering with the gas supplier led to the shut down of the Alaoji Power Plant, adding that it would become functional before the end of this year.
She said that significant steps had been taken to restore the Gas Metering Station to provide a lasting solution to gas losses to the plant.
Adighije also said that the company had made several attempts to enter into a Power Purchase Agreement with NBET to no avail as this would have improved NDPHC’s merit order in the dispatch priority schedule.
”This has impacted the company 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 that the company was leveraging on the order issued by the Nigerian Electricity Regulatory Commission (NERC), on bilateral agreements to sell its stranded power and would soon conclude some deals with off-takers.
She explained that the company currently had a generation capacity in excess of demand from the national grid, “and is thus prioritising direct supply to bilateral and eligible customers to commercialise its stranded capacity.”
According to her, the strategy of the new management seeks to unlock the stranded energy by dedicating significant portions of it to eligible customers and bilateral trading arrangements.
She added that “this move aligns with the NERC July 25 order, which permits generation companies to trade directly with eligible customers — a step aimed at addressing the issue of stranded capacity.”(NAN)
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