The colossal cost of dormant electricity – Blueprint Newspapers Limited

Nigeria has been plunged into dense darkness for much of the past two weeks. Last week, for two frenetic days, the whole country was plunged into darkness as the national grid collapsed completely. The darkness persisted even after the grid was reactivated. Few communities today have electricity for five hours a day.

Two weeks ago, Russia captured Ukraine’s largest nuclear power plant in Zaporizhzhia. The plant produces 20% of Ukraine’s electricity. Even though Ukraine has lost 20% of its electricity source, electricity is more regular in this war-torn country than in Nigeria.

Nigeria’s prolonged darkness is no longer news. The news is that no one knows precisely why Nigeria is still in the dark.

The British believe that a diagnosed problem is half solved. Nigeria for the past 62 years has not been able to diagnose the reason for its eternal darkness.

Eight years after the generation and distribution arms of the now defunct Power Holding Company of Nigeria (PHCN) were privatized, all consumers get as an explanation for the country’s eternal darkness is a never-ending blame game that makes people swoon. event in the Garden of Eden to insignificance.

When the national grid collapsed and plunged Nigeria into darkness, the Transmission Company of Nigeria (TCN) quickly blamed the failure on the incompetence of the power generation companies (GenCos).

TCN complained that the water level in the country’s hydroelectric power stations was too low and the gas-fired power stations did not have the capacity to compensate for the loss.

Two days after TCN blamed the GenCos for the national grid collapse, the GenCos came out in forceful defense of their perceived handicap in the industry.

The power generation companies association called a press conference and blamed their poor performance on the debt contagion plaguing the power sector.

This time, the GenCos did not identify the massive debts of the electric distribution companies (DisCos) as the reason for their inefficiency. They listed a strange federal government debt as what prevents them from investing to avoid the continuing collapse of the national network.

Nigeria is a strange country. Even though the entire nation was plunged into dense darkness for nearly two weeks, the country still records a daily minimum of 3,000 megawatts (mw) of electricity generated by GenCos that could not reach consumers. Energy is simply wasted on a daily basis because the TCN and DisCos do not have the capacity to supply it to consumers.

This idle power is the source of Nigeria’s eternal darkness. The architects of the deal that ceded the former PHCN’s power generation arm to the GenCos factored unused power into the deal and made it mandatory for the federal government to purchase unused power from GenCos and pay them adequately.

The problem behind the collapse of the national grid and the intermittent power supply of the past two weeks is that the federal government has not honored its end of the agreement on the purchase of the unused electricity generated by the GenCos.

The government has not paid the GenCos for unused generated electricity since 2015. The truth is that, on a daily basis, the GenCos send a minimum of 7,000 mw of electricity to the national grid.

The TCN and the DisCos are never able to supply more than 4,000 MW to consumers on any given day. The remaining 3,000 mw or more simply vanishes into thin air, as no one has the technology to store the generated electricity yet.

The Federal Government has accrued debts to GenCos for idle generated electricity since 2015. The debt now stands at N1.6 trillion and no one knows how to settle the debt.

Unused generated electricity has been a thorn in everyone’s flesh in the electricity business. The TCN does not have the capability to transmit all of the energy produced by the GenCos to the DisCos for further distribution to consumers.

DisCos are even the weakest link in the electrical industry chain. If TCN can reluctantly transmit 4,000 MW of electricity in a day, consumers would just be lucky if DisCos could deliver 3,500 MW to their homes.

And the DisCos would not allow anyone to tap directly into the idle power generated by the GenCos. On December 9, 2021, I attended a seminar organized by the Nuclear Energy Commission (NEC) to mobilize the manufacturers in the country for the production of the local components of the future nuclear power plant in Nigeria which is expected to generate 4,000 MW of electricity. ‘electricity.

Manufacturers at the seminar recounted harrowing tales of their frustrations with DisCos over their futile attempts to directly harness the dormant energy generated by GenCos.

DisCos defiantly refuse to allow manufacturers to tap directly into the idle stream because they claim to have the franchise that makes every consumer their exclusive property. No one in Nigeria can tap unused electricity directly and pay the GenCos, thereby reducing the government’s indebtedness to them.

If manufacturers were allowed to tap into unused power and pay GenCos for what they used, the Federal Government would not owe GenCos the colossal sum of N1.6 trillion naira on unused electricity.

Also, GenCos could have been more liquid today than they are now. They would probably be able to invest in equipment that would allow them to fill the vacuum created by the low water level in the hydroelectric plants at the moment.

The colossal dormant electricity debt is a sad reminder of the selfishness that combined to maintain Nigeria as a medieval industrial powerhouse.

It is a foolish business to run up a debt of 1.6 trillion naira on the energy produced which is of no use to anyone. One thing is evident in the energy sector right now. DisCos are in an advanced stage of financial strangulation.

This rules out the possibility of them raising funds to refurbish their archaic distribution equipment.

The summary of this development is that there would still be idling power even as Nigeria remains in the dark.

The solution to the quagmire is for the federal government to renegotiate the DisCos franchise to allow those with the ability to tap into unused energy to use the facility and reduce the federal government’s indebtedness while allowing GenCos to investing in power generation to pre-empty low water pressure from hydroelectric plants.

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