The Niger Delta Power Holding Company (NDPHC) Limited says it is battling the constraints of huge indebtedness, gas supply and electricity transmission constraints in its operations.
The Managing Director of the company, Engr. Jennifer Adighije, who bemoaned the impact of these challenges on its efforts towards energy inclusion in the country said the bulk of the debt was by the bulk trader, the Nigeria Bulk Electricity Trading (NBET) and other bilateral entities operating in the power generation and distribution industry.
Engineer Adighije who spoke in Abuja said the dismal uptake of electricity generation capacity available in the electricity market was significantly weighing down its operations.
Despite these challenges, the MD said the company under the new management has continued to work assiduously to record significant achievements within the short period she took over management.
Apart from resuscitating five turbine units across Calabar, Omotosho, Sapele, Ihovbor plants that were erstwhile offline, she said the company has been able to facilitate the contribution of additional 625 megawatts (MWs) of electricity to the national grid.
“Currently, NDPHC has mechanically available generation capacity of about 2,000MWs of electricity that is significantly stranded due to transmission constraints, gas supply and gas transportation limitations, in addition to dwindling offtakes by the power distribution companies (DisCos),” she said.
Over the years, she said the power plants under the National Integrated Power Project (NIPP) are utilized by the system operator to carry out primary frequency response to ensure power grid stability.
These ancillary services, she pointed out, ought to be monetized in line with the grid code and industry regulations.
However, she lamented that the NIPP plants were ordered to startup and shut down at the prerogative of the system operator without any form of compensation, resulting in low utilization of capacity and operational stress on the generating turbine units.
In accordance with the grid code, she said the NDPHC is placed on restrictions as a result of inadequate transmission grid availability and low demand from the downstream electricity market.
Although these issues have been addressed largely by the Minister of Power, Chief Bayo Adelabu, she said since power generation was driven by demand, if adequate demand was not made, the power plants would not be able to generate electricity.
In certain cases, she observed that when the demand for electricity arises, there was inadequate dispatch corridor or wheeling capacity through the grid network.
“In spite of these limitations, NDPHC continues to spearhead transmission grid expansion plan and distribution network interventions to enable power generation to be delivered to the last mile underserved communities” she disclosed.
Since inception of the NIPP, The MD said the NDPHC has invested over N500 Billion in Transmission projects, in terms of installation of Transformers, Transmission Sub-stations, switch gears, switch yards, transmission lines, line bay extensions and several world-class projects currently being operated by the Transmission Company of Nigeria (TCN) to boost electricity supply capacity.
On Alaoji Power Plant, Adighije said although the dispute over gas supply metering with the gas supplier led to the shut down of the station, the facility would become functional again before the end of this year, as significant steps have been taken to restore the Gas Metering Station (GMS) to provide a lasting solution to gas losses to the plant.
She stated that the company made several attempts to enter into a Power Purchase Agreement (PPA) with NBET to no avail.
This agreement, she noted, would have helped in improving NDPHC’s merit order in the dispatch priority schedule, adding the inability to get it sorted out has seriously impacted the company finances, further exacerbating the stranded capacity of the company.
“Currently, NDPHC is placed in the least priority bucket for dispatch, in spite of its available daily dispatch capacity of about 2,000MW.
“By no small measure, NDPHC remains the largest fleet of generating turbine units in the sector. Conversely, much of that capacity remains stranded due to these impediments that constrain the company from generating optimally,” she said.
Adighije said the company was leveraging on the Order issued by the Nigerian Electricity Regulatory Commission (NERC), on bilateral agreements to sell its stranded power and should soon conclude some deals with off-takers.
Engr. Adighije, explained that the company currently has a generation capacity in excess of demand from the National Grid, and is thus prioritizing direct supply to bilateral and eligible customers to commercialise its stranded capacity.
To unlock the stranded energy capacity and boost electricity supply, the MD reiterated the strategy the new management was adopting by dedicating significant portions to eligible customers and bilateral trading arrangements pursuant to the July 25th order of the NERC directing generation companies to now trade bilaterally with eligible customers and that should be able to address our stranded capacity.
