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Mainstream Energy Lose N6.4bn To Un-utilised Capacity, But Optimistic Of Reversal With Eligible Customer Policy

While Nigerians lament over poor power supply and blame the government as such, new facts have emerged that the major problem with electricity situation in Nigeria is the transmission and distribution segments of the supply chain.

Following the privatisation of the sector the generation, transmission and distribution segments were separated with government retaining control of the transmission segment while private investors took over the others.

The Managing Director of Mainstream Energy, operators of Jebba and Kainji hydro power stations, Engr. Lamu Audu, disclosed Wednesday at the Jebba plant, that it was sad that while Nigerians are desperate for more electricity supply his company which has the capacity to produce an average of 922mw from both of its plants, only have 650mw taken on a monthly average, because the distribution segment lack adequate infrastructure network to get the power to homes, offices and industries where it is needed.

Watch: Video of Jebba hydro power plant control room

 

According to him, the lack of 100 percent utilisation of their generation capacity has resulted to a loss of N6.4 billion to the company between January 2015 and January 2018.

For instance, Audu explained that the Jebba plant which has the capacity to averagely produce 600mw monthly, produced 478mw and 409mw in January and February 2018, respectively. He said his plants are frequently asked to ramp down in order to ensure grid stability when the electricity produced is not utilised.

“Apart from losses of shut-in capacity, we also incur a lot of losses in terms of what we spend maintaining our equipment. The frequent shut down and restart has a negative effect on the equipment and affect our operational cost,” he said.

“While we have invested tremendous resources in overhauling our plants to ensure improved generation, the energy we produce can’t be taken as a result of limitations at both the distribution and transmission end. On several occasions we are asked to shutdown our machines. We are then limited in resources and this is limiting our ability to make revenue and invest more,” he stated.

Industry analysts have argued that while a lot of investment have been done at the generation end, the same cannot be said of the distribution segment. Consequently, the electricity produced is not delivered to Nigerians and even revenue collection on what is supplied is poor. The development analysts say, is stifling the growth and financial robustness of the sector.

To this end, Audu further disclosed that his company alone, is owed N81 billion in outstanding invoice payment.

“We want government to resolve these issues, investors are now really scared because of what is happening now. How can we go to our shareholders to say we want to recover more capacity when what we produce now is not being taken,” Audu queried. “The excuse is that the distribution segment is not collecting enough revenue so we are denied resources and revenue,” it is a serious situation he lamented.

However, Audu commended the federal government for approving the eligible customer policy which allows generation companies to sell power directly to customers who can take 2mw and above.

“Now I can look for my customer myself, and focus on where I can sell my product and get paid. Now we can have bilateral agreement where the Transmission Company of Nigeria will deliver power to the customer, and we get paid. With the policy we can sell our stranded power and this will allow for more investment and additional capacity,” Engr Audu said with optimism.

He explained that so far the company has signed six bilateral agreement with eligible customers, all of which are local customers. He however, added that the policy also allows them to sell power to international customers.

Meanwhile, at the Kainji power station, Engr. Sunday Adele, the company Mechanical Supervisor, hinted that talks were on to add additional two new turbines of about 150mw each to the Kainji plant. He said two companies from China and one from Australia have indicated interest in funding partnerships, adding that the turbines are expected to become operational in about three years time.
A tour of the power generating facilities was organised by the ministry of power, Works and Housing, (power sector) with a view to providing Nigerians with information on government efforts at ensuring incremental power delivery. The team was led by the Director, Press, (Power Sector), Mrs Etore Thomas.

6 Comments

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