13022018 - 2019 Guber: Okorocha endorses son-in-law

22— Vanguard, TUESDAY, FEBRUARY 13, 2018
Gas supply, others deny Nigeria’s power sector
N40.55bn revenue in one month
•DISCOs’ remittances to NBET still below 30%
•Nigeria’s hydropower plants comatose despite FG intervention
By Prince Okafor
DESPITE over 192 trillion
standard cubic feet of gas
reserves yet to be tapped, power
plants in the country still lack
adequate gas to run turbines,
giving rise to N40.548 billion
revenue losses by the sector in one
month.
This loss was due to insufficient
gas supply, distribution
infrastructure, transmission
infrastructure and water reserves.
Investigation showed that ‘’in
January 2018, the highest
electricity revenue loss was N1.695
billion occurring on the 1st day of
January while the least revenue
loss was N906 million on the 11th
day of January. On average,
N1.308 billion in electricity
revenue was lost on a daily basis.”
It was also gathered that the
largest power generation for the
month was 4,148MWh/hour,
generated on the 12th day of
January 2018, whereas the lowest
power generated was 2,596MWh/
hour on the 3rd day of January
2018 while the average daily
generation was 3,705Mwh/hour at
the national level.
Causes of losses
Data obtained from the Nigerian
Electricity Supply Industry
Statistics, NESIS’s website,
revealed that the loss was as a
result of the shutting down of some
gas turbines which led to
insufficient gas supply, limitations
in distribution and transmission
infrastructure and water
management constraints in some
of the hydro plants.
Delta Gas Turbine (GT) 18
tripped on high inlet differential
pressure and it was eventually shut
down. Para Energy GTs 2 to 9 was
shut down due to a planned outage
on Ikorodu/Shagamu 132KV Line,
putting the total load loss at
68.6mw.
Also, Omoku GTs 1 to 3 and 6
tipped on reverse power due to
tripping of Alaoji/Afam132kv line,
with a total load loss of 53.6mw.
Further statistics from the
Advisory Power Team indicated
that on January 28, 2018,
2277MW was not generated due
to unavailability of gas, 150MW
was not generated due to
unavailability of transmission
infrastructure, while 287MW was
not generated due to high
frequency resulting from
unavailability of distribution
infrastructure, 290MW was not
generated due to unavailability of
water.
Consequently, the power
sector lost an estimated
N1,44,000,000 due to
insufficient gas supply,
distribution infrastructure,
transmission infrastructure and
water reserves same day.
DISCOs’ remittance still below
30%
Finding further reveals that the
Distribution Companies,
DISCOs’ remittances to the
Nigeria Bulk Electricity Trading
Plc, NBET is still below 30 per
cent. This has over time, affected
liquidity in the sector.
According to the Executive
Secretary, Association of Power
Generation Companies, Dr. Joy
Ogaji, “Just to clarify, GENCOs
have no contractual agreement
with the DisCos on debt recovery
but they have an agreement with
the Nigerian Bulk Electricity
Trading Plc (NBET) who act as the
link between the GENCOs and
the DisCos through Power
Purchase Agreement (PPA) and
vesting contracts.
“Therefore, the decision lies with
NBET to put in place measures to
ensure that the DISCOs improve
their monthly revenue remittances
which as at today, is below 30 per
cent.
“Since takeover distribution
companies have failed to improve
on their networks leading to high
load rejection, DISCOs have also
failed to meter customers and only
insist on tariff hike. Tariff increase
should come with a corresponding
improvement on distribution
infrastructure nationwide.
THE average price
of Organisation of
Petroleum Exporting
countries, OPEC’s basket
of 14 crudes in the past
one week averaged
$63.81 compared with
$66.87 recorded the
previous week.
According to OPEC’s
calculation, the highest
price of crude was
recorded on February
05, 2018, which averaged
$65.70 per barrel, while
the lowest price for the
period under review
averaged $61.52
Source: Ministry of Power
“The GENCOs have repeatedly
stated that the transparency and
visibility of market funds
collected by the DISCOs remain
the best way to reduce the
liquidity squeeze in the sector but
the DISCOs have kicked against
this.
“There is a need for adequate
investment in the distribution
infrastructure to increase efficiency.
They should further ensure that
Service Level Agreements are
implemented for distribution
companies’ performance based on
their business plans.”
In a related development, the
Eligible Customer Declaration by
the Minister of Power which
enables GENCOs to sell power
directly to some selected class of
consumers, when implemented
will also help reduce the debt
burden of GENCOs.”
Oil to hit $80 within six months —Goldman Sachs
By Sebastine Obasi
THE oil market has rebalanced
as Brent will reach $82.50 a
barrel within six months, Goldman
Sachs, a leading global investment
banking, securities and investment
management firm that provides a
wide range of financial services said.
Goldman Sachs has held one of the
most optimistic views on the rebalancing
of the oil market and oil
prices in the near term. It sees the
price of brent reaching $75 per barrel
within three months, lifting its shortterm
oil price projection from the
previous $62 forecast.
“The rebalancing of the oil market
has likely been achieved, six
months sooner than we had
expected,” the bank’s analysts said
in a report.
“The decline in excess inventories
was fast-forwarded in late 2017 by
stellar demand growth, high
Organisation of Petroleum
Exporting Countries, OPEC’s
compliance, heavy maintenance as
well as collapsing Venezuela
production,” Goldman noted.
At the end of last year, Goldman
Sachs was more optimistic about the
speed of the oil market rebalancing
State of power plants
The Minister of Power, Works
and Housing, Mr. Babatunde
Fashola, has put the total
percentage contribution of the three
hydropower GENCOs in Nigeria
– Kainji, Jebba, and Shiroro, to the
country’s daily power generation
at 26 per cent, up from 15 per cent
that he said was the situation in
2015.
The minister stated that the
contributions of hydropower to
Nigeria’s energy mix has reduced
that of gas power generation to 74
per cent from 85 per cent he said
was the case in 2015.
However, Mainstream Energy
Solutions Limited, the
concessionaire of Jebba and Kainji
Hydro Power Plants, invested
N288.414 million in its Corporate
Social Responsibility, CSR,
projects in host communities.
According to the company’s
Chairman, Col. Sani Bello (Retd),
the investments were made in four
critical sectors, including
education, health, water and power
supply, through its Mainstream
Energy Solutions Foundation. Col.
Bello urged the host communities
to ensure a peaceful environment
for Mainstream to operate with an
assurance that the company was
committed to providing more
development projects for them.
“Considering the fact that the two
power plants (Kainji and Jebba )
are two critical national assets, we
want to see that there is a good
relationship between the company
and the communities.“
Further investigation also
revealed that arrangement between
the Federal Government and the
Japanese Government in 2016 to
sign all relevant agreements
towards securing $800million
credit to add 578.4mw of power
generation capacity to Jebba Hydro
Power Plant, is still pending as till
date, there seems to be no
manifestation of the project as the
plant which was constructed in
1985 still operates at 45 per cent.
than many experts and other banks,
and OPEC itself.
The investment bank expected that
the global oil overhang would have
cleared by the middle of 2018,
accelerating OPEC’s exit from the
production cut pact that is currently
set to expire at the end of 2018.
“The oil re-balancing continued its
progress through November,”
thanks to factors including “stellar”
oil demand growth, Goldman said
in December.
Now Goldman has revised further
up its global oil demand growth
forecast, to reflect strong emerging
market economies that will drive oil
demand growth.
Expectations of robust oil demand
growth also prompted JPMorgan
to raise its forecast, seeing Brent
prices averaging $70 this year, with
a peak of $78 a barrel at some point
in the first half, when strong
demand will continue to push prices
up.
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