Gencos loses 1.66 billion naira for non-payment of unused electricity

Power companies in Nigeria said they suffered a loss of 1.66 billion naira in seven years due to non-payment of deemed capacity.

The executive secretary of the Association of Power Generation Companies, the umbrella body of the Gencos, Dr Joy Ogaji, revealed this on Wednesday at a stakeholder meeting on the regulators’ oversight program on electricity hosted by the Wole Soyinka Center for Investigative Journalism.

Ogaji said available generation capacity fell to 6,192.34 megawatts this year, from 7,792.51 MW in 2020, while average generation capacity increased from 4,050.07 MW to 4,120.96 MW. .

According to the APGC, inferred capacity is the capacity that should have been delivered, had it not been for the grid operator’s instruction to a Genco to downgrade or reduce its capacity to achieve grid balance and stability.

According to her, 34.20% (2,117.86 MW) of the production capacity of Gencos is currently blocked, against 48.03% (3,742.43 MW) in 2020.

She said that Gencos recorded a capacity payment loss of N 151.22 billion this year, N 266.10 billion in 2020, N 256.97 billion in 2019, N 264.08 billion in 2018. , N 236.47 billion in 2017, N 273.32 billion in 2016 and N 214.93 billion in 2015.

Nigerian government company Bulk Electricity Trading Plc buys bulk electricity from Gencos through power purchase agreements and sells it through acquisition contracts to distribution companies, who then supply it to the distributors. consumers.

Regarding the blocked generation capacity, Ogaji said, “The generation companies are ready to make this electricity available, but the system is not able to take it. So whether or not it is because Nigerians are not taking power or they are unable to pay or we have infrastructure issues, this is what the government needs to investigate and resolve because that’s eight years after privatization.

According to her, the installed production capacity at Gencos plants is around 13,427 MW.

She said: “So if we are able to use what is already available, which is around 8,000 MW, that will give the generation companies a boost to bring in the rest. But for the past eight years, we’ve been just between 3,000 MW and 3,500 MW and a maximum of 4,000 MW. We are not making progress.

“Generation companies also have expansion capacity to double those 13,427 MW. What is happening does not encourage them to stimulate it, and their activity is, so to speak, stagnant. This is in addition to not getting paid for what has already been used.

Ogaji estimated the average annual growth in the use of available generating capacity at 100 MW.

WSCIJ Executive Director / CEO Motunrayo Alaka said REMOP was designed as a media initiative to monitor and report on the activities of government agencies, ministries and institutions that have responsibility for exercise supervisory functions on particular sectors and / or problems.

“The pilot phase of the program focused on basic education and electricity through the Universal Basic Education Commission and the Nigerian Electricity Regulatory Commission. The WSCIJ is implementing REMOP with the support of the MacArthur Foundation, ”she added.

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