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Quick Take: The current landscape of Nigeria’s power sector

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Quick Take: The current landscape of Nigeria’s power sector

There are a few things to note from the chart above which uses data from the Market Operators and the Transmission Company of Nigeria (TCN).

  • It shows that there is a huge gap between installed power generation capacity (which is the amount of power the country can generate under ideal conditions) and the peak power generation in Nigeria (which is the maximum power the country has actually generated or is generating).
  • What this means is that even though it makes sense in the long run to increase the power generation capacity by building new power plants, focus should also be on the full utilization of the current installed power generation capacity and also improvements in the transmission wheeling capacity of the National grid.

The problem: Most power generating plants in the country are non operational or operating at partial capacity. This is partly due to the short supply of processed natural gas. Basically Nigeria does not yet supply enough gas to meet the demands of the industry and since a majority of the power plants in Nigeria are thermal power plants, this affects our peak generation.

Nigeria’s gas production now stands at 253.06 billion cubic feet (bcf), translating to an average daily production of 8,163.58 million cubic feet per day (mmcfpd) according to the latest edition of monthly financial and operations data by the Nigerian National Petroleum Corporation (NNPC).

The daily average natural gas supply to gas power plants stood at 854.40mmscfd, equal to power generation of 3,492MW. This is the highest recorded in the last two years.

What this means is that improvements in gas production and gas supply to the power plants is directly proportional to increase in power generation capacity.

Currently the transmission wheeling capacity of the National grid is 5,300 megawatts (MW), it is far below the total installed generation capacity of 12,522 megawatts and there needs to be improvements in the transmission wheeling capacity to closely match with the total installed power generation capacity.

The Transmission Company of Nigeria (TCN) is reportedly planning to raise the transmission wheeling capacity of the power grid to 10,000 megawatts (MW) as it moves to achieve its target by re-conducting seven critical lines nationwide this year.

TCN’s projected transmission wheeling capacity

If that holds substance, theoretically the transmission wheeling capacity of the National Grid would closely match the total installed power generation capacity.

Once peak generation matches available capacity and thereafter installed capacity and the transmission network is suitable to move all that power, the deficit would be reduced significantly.

Poor remittances from the DisCos and NBET also affect the capacity of the power plants to run sustainably and proper policies and reforms to increase the remittances from the DisCos and also reduce ATC&C losses should be implemented. Also, cost reflective tariffs as well as widespread metering penetration should be embraced.

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