Power generation companies (GenCos) have said the quantum of electricity generated in Nigeria is rejected or forced to be reduced by an average of 4,210 megawatts daily due to transmission and distribution constraints.
The GenCos, in a document made available by the Association of Power Generation Companies (APGC), noted that the forced reduction of generated electricity had persisted for several years.
The APGC said the supply growth from pre-privatisation to date showed that available generation capacity, which was 3,427.5MW had increased by 138.34 per cent to 8,169MW.
GenCos recovered 4,741.5MW, according to the document seen by the Punch Newspaper on Monday.
“However, due to system constraints, generated power is rejected or forced to be reduced to match the infrastructure that transmits and distributes this power to the customer,” the GenCos stated.
They added, “A case in point: Between January to August 2020, despite an available generation capacity of 8,169MW, Gencos were only allowed to generate 3,959MW, thus losing an average of 4,210MW daily.”
APGC stressed that the wellbeing of a power generation company goes beyond efficient operations to include its ability to generate income from power generated.
It explained that with a total available installed generation capacity of more than 8,000MW and maximum wheeling capacity of not more than 5,500MW, there would always be a recurring instance of over 2,500MW idle generation.
“Idle generation represents capital investment not able to yield revenue that will hence impact the ability of the GenCos to support efficient operations and service loans used in developing the power plants,” the association stated.
It said out of the meagre 5,500MW of transmission wheeling capacity, the DisCos had not proven to be able to distribute more than 4,500MW, continuously leaving yet another 1,000MW of generation capacity unutilised.
It said, “In total, due to the combined technical incapacitation of TCN (Transmission Company of Nigeria) and the DisCos, the GenCos are unable to deploy a total of 3,500MW of capacity that would ensure sustainable profitable operations.
“If one considers the fact that the DisCos have in the recent past been operating around 3,500MW or below, this figure escalates to 4,000MW of idle capacity.”
It added, “In effect, the GenCos are not able to deploy over 4,000MW of idle power.”
According to the APGC, out of the over 4,000MW wheeled by TCN in first quarter of 2020, only an average of 20 percent (800MW) was remitted to Discos to the Nigerian Bulk Electricity Trading company.
This made a total of 7,200MW generation capacity that was not yielding revenue for the GenCos, according to the APGC.
The GenCos however noted that any government that subsidises 75-80 percent of distributed power is yet to come to terms with the tenets of privatisation.