Report: Nigeria to Lose N720bn to Power Sector’s Inefficiency

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By Emmanuel Addeh

With an average daily loss of N2 billion to inadequate power infrastructure in the country, the Nigerian economy will be deprived of about N720 billion in 2020, an analysis of figures from the Advisory Power Team (APT) of the Office of the Vice President has shown.

Information from the office indicated that the losses were induced by problems associated with gas supply and grid infrastructure challenges in the Nigerian Electricity Supply Industry (NESI).

A trend analysis in the industry, which ran from between January and projected to end in December showed a loss of at least N2 billion daily. Gas unavailability tops the list of problems bedeviling the power sector coupled with failing transmission and distribution infrastructure.

Although the Nigerian National Petroleum Corporation (NNPC) had recently intervened with the approval of over N200 billion to the power sector as a way of sorting out the challenges, the beneficiaries said it was for payments for debts owed in 2019.

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The national oil company had earlier this month also announced an increase of 19.14 per cent in the average daily natural gas supply to power plants.

The NNPC said the increase translates to 788 million standard cubic feet of gas per day (mmscfd), equivalent to power generation of 2,873MW, although there has been no marked improvement in power supply.
In May, about 3,958mwh/h was lost to gas shortage problems, the average energy supply stood at 4,179mwh while peak power was 5,316mwh, which was achieved in February.

Also, on May 7, 2020, for instance, the average energy sent out was 4,441 mwh/h (up by 11 MW from the previous day) while 2,993 MW was not generated due to the unavailability of gas.

In the same month, 1,021.10MW was not generated due to high frequency resulting from unavailability of distribution infrastructure, while 4.0 MW was recorded as losses due to water management.

The power sector lost an estimated N1.92 billion daily in May for that month due to constraints from insufficient gas supply, weak distribution and transmission infrastructure.

While Nigeria sources most of its electricity from thermal, gas-fired power plants, accounting for 70 per cent, generation from hydropower plants makes up about 30 per cent of the total.

Some of the country’s power plants have not also been producing at all, including AES, ASCO, Egbin Station 6, Dadin Kowa and Sapele NIPP, according to the information supplied by the office.

The stations with the highest output during the year are Egbin 2-5, Delta, Azura, Odukpani, Kainji, Jebba, Afam VI, Geregu, Shiroro and Okpai while the lowest were Afam VI and V, Sapele and Ihovbor NIPP.

In July, the trend continued with over N2 billion loss per day on the average for the entire month.

“On July 13 2020, average energy sent out was 3,981 MWH/Hour (up by 260.06 from the previous day).

“The power sector lost an estimated N2,101,000,000 on July 13, 2020 due to constraints from insufficient gas supply, distribution infrastructure and transmission infrastructure.

“Peak generation attained on July 13, 2020 was 4,987.8mw, peak average energy sent out ever is 4,685 MWH/H on 17 April 2020”, the vice president’s office said.

It added that on July 14 , 2020, average energy sent out was 3,919 mwh/hour (down by 61.26 from the pervious day).

“The power sector lost an estimated N2,013,000,000 on July 14, 2020 due to constraints from insufficient gas supply, distribution infrastructure and transmission infrastructure,” the APT stated.

It, however, put the peak generation attained on July 14 2020 at 4,662 MW, while peak average energy sent out ever still remained 4,685 MWH/H and peak generation attained ever stayed at 5,375 MW.

The electricity Generation Companies (GenCos ) recently said although they had increased their generation capacity to 8,145mw , they were only able to produce 3,987mw, with 4,159mw left stranded as a result of the constraints in the national grid capacity.

Before he was fired a few weeks ago, Mr. Mohammed Gur, the Transmission Company of Nigeria (TCN) managing director, had publicly knocked the Distribution Companies (Discos) for lacking the requisite infrastructure to improve the country’s power supply.

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