Blackout: NBET owes us N1.644trn, GENCOS claimed

On Sunday, the Power Generation Companies (GENCOS) claimed that the Nigerian Bulk Electricity Trading (NBET) owed them over N1.644 trillion in stranded or unutilized power debts dating back to 2015.

In response to a statement issued by the Transmission Company of Nigeria (TCN) on March 8, 2022, which attributed low power generation to GenCos’ inability or refusal to generate power, the companies claimed that a large portion of their generated power was stranded.

Dr. Joy Ogaji, the Executive Secretary of the Association of Power Generation Companies (APGC), said the development was affecting the GENCOs’ smooth operations at a press conference in Abuja.

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According to the breakdown, a minimum of 3010 megawatts were stranded on a daily basis from 2015 to January of this year, resulting in a huge payment loss, she said.

“…,” she said. Since 2013, I’ve been warning you that power is stranded. We now have 6.616 megawatts available, which we have had since 2015 or 2016. A total of 3606MW was taken, leaving 3010MW stranded. In 2015, the capacity payment loss was N 214.93 billion. In 2016, we produced an average of 7000MW, but only 3212MW was used, while the standard capacity was 3888MW, resulting in a capacity loss of N273. 273 billion.

In 2017, we produced 6008 71MW, but only 3599MW was taken, leaving 3302WM stranded. That is the capacity, and the event loss for 2018 was N236.47 billion”.

“Since 2013, when the power sector was partially privatised until today, weak and inadequate infrastructure (transmission and distribution) have continued to render insignificant, a significant portion of the generation capacities recovered or added by GenCos through huge investments done by them to increase their respective generation capacities,” Ogoji said, reiterating the GENCOS’ readiness to generate adequate power for Nigerians.

“While the GenCos’ owners committed to investing and increasing generation capacity to 13,000MW across the country, no corresponding investment or improvement was made at the transmission and distribution ends.” As a result, GenCos have significant stranded capacity, which Nigerians, ironically, require but cannot obtain. Given that capacity utilization is frequently used as a measure of productive efficiency in any market, decisions about power generating capacity investments are based on expected returns and costs”.

However, when contacted, NBET refuted the GenCos’ figures, claiming that only companies with active gas supply and transportation contracts were compensated for unutilized capacity.

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Henrietta Ighomrore, NBET’s Head of Corporate Communication, explained that only five power generation companies with active gas purchase agreements were paid for unused capacity in the country.