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Blame Low Power Generation On Poor Grid Management –GenCos

The Executive Secretary of the Association of Power Generation Companies (APGC), Dr Joy Ogaji on Sunday said Generation Companies (GenCos) were being owed a sum of N1.644trillion for unutilised capacity.

This was even as it blamed the current low power generation on poor grid management by the system operator.

Ogaji who gave the figures at a briefing in Abuja on Sunday said from 2013 till date, GenCos were being faced with debt arising from stranded power.

According to her, the generation companies were being constrained by the system operator to run below capacity which in turn affects the various thermal units.

She said this in turn led to the shut down of some thermal units.

The Transmission Company of Nigeria (TCN) had last week that a summary of the power generating profiles in the last two months had shown that 14 gas-powered generating stations were either not generating at all or had limited generation at various times within the period.

The Company said the development had further depleted the quantum of power generation available for transmission into the grid on a daily basis.

However, Ogaji faulted why the Company failed to disclose why the power generating stations were either not producing optimally or shut down.

According to her because GenCos could not meet their obligations to gas companies in terms of payment and lack of foreign exchange to conduct the required maintenance, the thermal units have been in their current state.

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“Now the question you want to ask is, why are we in this situation? If there was sought a framework, a well-structured framework, why didn’t it work now? The problem is the management of the grid.

“The management of the grid is responsible for why we are facing what we are facing is one of the reasons and why is it so, if you check the PPA for some of you that have been long in the sector, you know that the average PPA as a power purchase agreement allows the generation companies to have a start-stop where your machine will start and stop not more than 20 times in a year in one year.

“Now, the current experience we are having in Nigeria is the generation of companies are made to start and stop for over 365 times in a year. Do the calculation. So the up and down movement of the grid, some of the units are affected,” she said.

She however maintained that if the government make available forex for maintenance of the units provide gas and clear outstanding debt, they could generate up to 9000MWs.

She stressed the need for an urgent meeting with the Federal Government and other stakeholders such as the Nigerian Bulk Electricity Trading (NBET) to chart a way out of the current situation.

Meanwhile, NBET in a swift reaction said GenCos have continued to receive over 90% Payment of their generating invoices for the 2021 payment cycle.

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It explained that payments are made to GenCos as at when due and has never defaulted on any payment cycle to date.

“The percentage payment made to GENCOS has continually been on the increase, with the 701.9 billion PAF payment which ensured a minimum of 80% of Gencos invoices for the year 2018 and 2019, as well as the 2nd PAf of 600 billion that ensured an average of 95% payment of Gencos invoices for 2020,” it said.

It further explained that market settlement is done based on the Final Settlement Statement (FSS) issued by the Market Operator.

“Once the FSS is issued to market participants, the Gencos send their invoices to NBET, and NBET has a period of 15-20 working days to settle Gencos invoices. It is also within this period that Discos make their market remittance to NBET.

“The settlement cycle is seamless, and all parties are well acquainted with their respective due dates, and NBET has ensured timely settlement of all invoices, in fact in some cases, we make early payments to Gencos before the 15 working days circle.

“On the issue of capacity payments, the contract documents are very clear on how it is treated. All Gencos get paid for the associated capacity on energy delivered to the national grid,” it said.

Source: tribune

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