Power generation companies (GenCos) in Nigeria have cried out that they were unable to pay for gas upfront as suppliers are demanding due to the liquidity challenge facing the Nigeria Electricity Supply Industry (NESI).
The companies in a press statement issued by their umbrella body, the Association of Power Generation Companies (APGC) acknowledged that shortage of gas was affecting the operation of thermal plants across the country.
“Thermal power from gas and steam turbines accounts for about 80 percent of Nigeria’s power generation. Gas unavailability greatly hinders power generation in thermal Power Plants. Gas cost constitutes over 60 percent of wholesale electricity tariffs in Nigeria. Hence, what goes on in the gas sector has huge implications for the NESI.
“Gas suppliers demand upfront payment (pre-payment) before they make gas available and the GenCos cannot afford to meet this request given the liquidity issues in the NESI”, the group stated.
The GenCos expressed their willingness to “invest to increase the capacity of our power plants and provide necessary investments to cater for maintenance and the repair. Generation companies are willing to work with relevant stakeholders such as the Federal Ministry of Petroleum resources and the Nigerian National Petroleum Company (NNPC), two critical stakeholders with oversight over gas resources, to develop novel approaches in making gas available for generation companies. Gas and transmission (evacuation) are critical and urgent needs outside the control of the generation companies and for this it calls for urgent Government intervention.
“GenCos are patriotic corporate citizens with patriotic zeal and are willing to build the nation together with the government”.
The group said the outbreak of Covid-19 pandemic in the country would not negatively impact on their operation.
They allayed “the usual pessimism associated with electricity supply during challenging times in Nigeria, the Association of Power Generation Companies (GenCos) is reiterating the commitment and readiness of GenCos to improve power generation from its Thermal and Renewable (Hydro Power Plants) sources across the country.
The companies observed that “aside gas molecules and transmission, GenCos have other challenges which government is actively engaging to resolve.
“There is need for an apolitical enabling environment through the design and implementation of viable policies, strong and experienced leadership and coordination of the sector. This requires effective collaboration and coordination across interrelated Ministries.
“If answers to GenCos most pressing/pertinent questions such as: can we be fully dispatched? Can we get gas? Who is paying for the power? Can be sought,then, power supply issues of the nation will be a thing of the past.
“The Association of Power Generation Companies (APGC) will continue to work with power sector stakeholders to gather and share up-to-date information, best practices and guidance to support them in safely maintaining operational integrity. It is our earnest desire that the pandemic be resolved as soon as possible.
The group said the companies were altering their business practices and developing strategies for dealing with the COVID-19 pandemic.
“To this end, GenCos have established telework protocols, ensuring that non-essential, non-critical employees work from home, while implementing its “continuation of services” plan to ensure operations and service delivery continue as usual to prevent even more economic disruption.
“GenCos have a strong track record of preparing for numerous emergencies like the COVID-19 pandemic, as well as countless other types of emergencies. This is evidenced in ramping up to a total available capacity of over 7,500MW and gross generation installed capacity of over 13,000MW.In preparation for the current situation, the GenCos have commenced close talks with the Federal Government and other power sector stakeholders to ensure that power plants have the resources they need to ensure generation of power”, the statement added.
