Page 10 - AfrElec Week 29 2021

AfrElec GAS-FIRED GENERATION AfrElec

APGC calls on NNPC to supply

gas to Nigerian gencos

NIGERIA THE Association of Power Generation Compa- “securitisation” – that is, some form of security
nies (APGC), a Nigerian industry association, – before committing to a delivery deal.
has urged state-owned Nigerian National Petro- Prior to privatisation, TPPs expected to
leum Corp. (NNPC) to assume responsibility receive such security from Nigeria Bulk Electric-
for supplying fuel to natural-gas fired thermal ity Trader (NBET), the manager and adminis-
power plants (TPPs). trator of the domestic electric power pool, in the
Joy Ogaji, APGC’s executive secretary, said at form of bankable commercial letters of credit (L/
a recent industry conference that the country’s Cs) issued by a commercial bank, she said. So far,
power generation companies, known as gencos, though, NBET has not provided the necessary L/
had not been able to ramp up electricity produc- Cs since 2013.
tion as rapidly as anticipated since they were pri- “[The] way the power sector is designed is
vatised in 2013. such that a value chain is as strong as its weak-
One of the factors underlying the problem is est link. So it is designed such that we have a
that TPPs have not been able to secure gas sup- bulk trader, NBET, as a securitisation agent or
plies that match their capacity, she said. Citing an obligor or a buffer for the gencos,” she said.
data from the National Control Centre (NCC), “So NBET is expected to provide a securitisation
which is responsible for grid operations, moni- in the form of a bankable commercial letter of
toring and control of Nigeria’s transmission grid, credit from a commercial bank to the gencos,
she noted gas-fired TPPs had only received 13% [which] in turn will now post it to the gas suppli-
of the fuel they needed to operate at their full ers. As you all know, we have not received that,
projected capacity of 28,000 MW. and this is why we are not able to post it to the
She called on NNPC to cover the deficit, say- gas suppliers.”
ing it was in a position to meet this need since She also argued that problems with gas sup-
it had a 50% equity stake in the joint ventures plies had hampered efforts to implement the
that are supposed to supply the gas to the power government’s plans for expanding gas-fired
stations. power generation. The Nigerian Electricity Reg-
“My proposition is [that] we want NNPC, ulatory Commission (NERC) has issued 160
[which] has 50% of the JVs, to take up the gas operating licences to power producers, but so far
obligation of the generation companies, and we only 25 of these are operational, she said.
will generate as much [sic] megawatts as you Most of these idle licences are held by TPP
want,” she remarked. operators that might have added up to 30,000
Currently, Ogaji said, the gencos often have MW of additional generating capacity, she
a difficult time securing adequate gas because added. ™
they cannot meet suppliers’ demands for

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