Power Outage, Fuel Scarcity: President Apologises to Nigerians

•Says govt would soon restore normalcy 

•FG working earnestly to resolve grid collapse 

•NERC: Gas pipelines vandalism, not non-payment of Gencos, responsible for worsening supply 

•Subsidy slumps to N30bn in 2022, from N600bn high

Deji Elumoye and Emmanuel Addeh in Abuja

President Muhammadu Buhari yesterday apologised to Nigerians over the prolonged fuel scarcity and frequent power outages being experienced across the country. Buhari said shortage of petroleum products was something his government had successfully averted in its seven years in office.

Minister of Power, Abubakar Aliyu, also yesterday, likened the worsening power situation across the country to a war situation.  But Aliyu assured that the federal government was doing everything possible to resolve the situation

However, the Nigerian Electricity Regulatory Commission (NERC) explained that the power situation was caused mainly by the activities of vandals on the country’s gas supply assets.

Buhari, in a statement issued yesterday by his spokesman, Mallam Garba Shehu, said the blackouts seen in the national grid were being addressed.

According to him, “A dip in hydroelectric generation due to seasonal pressures has coincided with technical and supply problems at thermal stations. On this, the government is also working tirelessly to resolve the issues at the latter to guarantee sufficient power flows into the national grid.

“As part of emergency measures put in place following a meeting convened with key stakeholders to address the low power generation in the country, the main challenge was identified as being one of low gas power generation as a result of sabotage of gas pipelines, leading to shutdown of power plants, coupled with on-going routine maintenance on other gas power plants.

“To recover over 1000MW, actions were agreed upon between the players in the Nigerian Electricity Supply Industry (NESI) and also NNPC. The actions targeted the National Integrated Power Project (NIPP) plants, (Niger Delta Power Holding Company (NDPHC) and power plants run under NNPC Joint Ventures, Agip, and Shell (NAOC and SPDC) and progress on the key actions have already ensured the restoration to the grid of 375MW after the pipeline from ‘Okpai 1’ was repaired.

“To also ramp up the underutilised capacity of the NDPHC capacity, a USD 50 Million Gas Supply agreement is being finalised to secure the sustainability of up to 800MW of underutilised NIPP assets.”

The president assured that government’s attention to these problems would bear fruits soon. He said his administration knew that the fuel shortage had placed a strain on citizens and businesses and gave an assurance that relief was on the way.

Buhari said, “I specially apologise to all sections of the society for this.

“The government is working round the clock to attend to this issue. An action plan agreed earlier this month is being implemented to address the scarcity. Working together with the Major Oil Marketers Association of Nigeria (MOMAN) and the Independent Petroleum Marketers Association of Nigeria (IPMAN), this plan is now bearing fruit.

“Sufficient fuel supply has returned to a handful of states, with the queues at stations falling. In the coming days, we expect this to be the case across the rest of the country.

“Looking to the longer term, funds are being targeted toward keeping fuel availability affordable for the country. The international energy markets have surged drastically in recent months; the government will, however, ensure that   consumers are protected against these price spikes.”

The president added that he had received information that some people were not behaving properly at the depots and among owners of petrol stations and in this regard, he directed the Ministry of Petroleum Resources, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), NNPC, and the entire security apparatus of the country to take strong action against those responsible.

FG Likens Power Crisis to War, Says it’s Working Earnestly to Resolve Grid Collapse

Aliyu likened the current power situation across the country to a war situation, assuring, however, that the government is doing everything in its power to resolve the situation. He said this while speaking with journalists at the end of the weekly virtual meeting of the Federal Executive Council (FEC) presided over by the vice president, Professor Yemi Osinbajo, at the State House, Abuja.

The minister attributed the collapse of power to a combination of factors, including unavailability of gas. He said having realised the gravity of the situation, he had summoned a meeting of stakeholders, where he told them that the present condition could be likened to a war situation requiring emergency solutions.

He stated that the power grid that suffered a collapse had now been restored, adding that efforts are being made to put power into it.

The minister explained, “The more reason we are facing the situation now is as a result of the shortage of gas and some of the generators have to go for maintenance.

“It is a scheduled maintenance and it is supposed to be scheduled outage but we had not envisaged that we will have issues around vandalisation of pipelines, which the NNPC has addressed, as you can see evidently everywhere, aviation fuel, and petrol in the filling stations.

“It is a combination of many factors. That compounded the problem we are having on the grid. We have recovered the grid now. The grid is back and we are trying to get more megawatts to push on the grid. We have set up small committees, all geared towards getting more megawatts to put on the grid. Basically, the problem around gas.

“You need to have gas contract between generating companies and gas supplies – some are in form of contracts, some are not. We are looking into this and have proffered some solutions in some few days to mature.”

Aliyu further explained, “Some of you are aware, just two days ago, I summoned an emergency meeting, which is unprecedented. For the first time, I brought in all the sector players, from NNPC, AGIP, Shell, the regulator, NERC, the umpire, NBET, some of the GENCOs, like Niger Delta Power Company, and TCN, transporters, the ministry, and Special Adviser to the President on Infrastructure.

“We came together and used the whole day trying to proffer solutions. I challenged all of them. I said this is like a war situation. We need to find solutions. We need to come out with answers. We need quick and emergency solutions.

“As you rightly put it, the power on the grid has dropped due to those things that affect it; lack of gas and maintenance that some of the generators are undergoing. So, that triggers it.

“You know technology, that drop in the supply that goes down on the grid, it triggers some response. Some started to trip down and that also causes the whole system to go down.

“We had it day before yesterday, we recovered it. We had it again, we covered it. So, we have covered it now. We are on top of it. The grid is back. We are trying to get more megawatts to push on the grid through that meeting. So, everybody is now contributing to that meeting.”

He stressed that the recent efforts by his ministry was already yielding results, but added that even though the country’s generation capacity was 13,000 megawatts, only 5,000 megawatts could be wheeled for transmission.

Aliyu stated, “We have started seeing the outcome of the meeting. As I leave here today, I will get more information on what I have to go and do. We have set up small committees, two, three committees and all gearing towards getting more megawatts to put on the grid.

“This is the situation. On what I said last time, we still stand on that. We have a capacity of 13,000 megawatts.  We have the one on the grid, we have the embedded and we have the captive. 

“If you combine all of them, we have that. So, what is happening now is as a result of all these problems that we’re encountering, and we’re on top of it. Very soon, we will come out of it.” .

The minister also disclosed that FEC approved N5 billion for payment of right of way to expand transmission in Lagos and Ogun states.

He said, “I also told you that we are encountering a lot of challenges of right of ways. For instance, this one is the issue of right of way. But we have gotten approval now; over N5 billion to open up and expand Lagos, Ogun, where presently they may not be enjoying quality electricity.

“So, we need to do this more. We have not denied that the transmission is not strong to carry load. Otherwise, we have over 13,000-installed capacity at the GENCOs. But we have been able to will only 5,000.”

Aliyu said there was no disagreement with generating companies over money, saying they have been paid N40 billion while consultants are working on the balance.

He said, “I think I’ve spoken all round. On gas issue, this should be one of them. We are trying to solve all the problems. For instance, just last time, I told you the debts owed by the government to DISCOs. I told you we are paying that. We are paying around N40 billion.

“The remaining balance is being reviewed by consultants to come out with exact figure. So, something is being done about that. And regarding the GENCOs and the gas suppliers, this is another issue between them and our obligation to the GENCOs, this is being looked at and we are working on that seriously.”

On his part, Minister of Industry, Trade and Investments, Niyi Adebayo, revealed that FEC approved the construction of a new corporate headquarters for the National Sugar Development Council in Abuja, in favour of Vita construction limited in the sum of N5, 756,833,616 with a completion period of 24 months.

Speaking also, Minister of State for Works and Housing, Muazu Sambo, said the Council approved the implementation of four projects, including two road projects and two bridges in different parts of the country.

NERC: Gas Pipelines Vandalism, not Non-payment of Gencos, Responsible for Worsening Power Supply

Meanwhile, NERC yesterday stated that the worsening power situation in the country was caused mainly by the vandalism of the country’s gas supply assets.

Chairman of the commission, Sanusi Garba, who gave an update when he spoke with journalists in Abuja, noted that the country lost at least 1,000 megawatts to the challenge.

The NERC boss also dismissed the position expounded by Executive Secretary of the Association of Power Generation Companies (APGC), Dr. Joy Ogaji, that the Gencos were unable to make more power available because they were owed N1.64 trillion.

Garba stated that although the Gencos were owed legacy debts, that had nothing to do with their current operations, maintaining that if at all there has been temporary delays in payment in the normal course of business, it shouldn’t lead to the generators stopping business for any reason.

Furthermore, Garba noted that whereas the thermal plants, which supplied 80 per cent of the country’s electricity, was supposed to buffer the fall in generation from the hydro plants, due to water management issues, they had not been able to do so this year, due to the inability of gas companies to supply gas.

Flanked by his deputies, Garba acknowledged that the amount of power being enjoyed by electricity consumers in the last two to three months had dipped considerably, as supply dropped from about 5,300mw in October 2021, to about 4,350megawatts in March.

He stated, “Now, obviously, looking at the level of generation, 1,000 megawatts is a lot and this has consequently impacted on supply to many consumers and, in particular, those who are living in Abuja.

“Just for clarification, in October 2021, the hydros were doing about 1,350 megawatts, now they are doing about 1,100. But that’s not enough to clearly explain why there are so much outages across the country.

“The reality is that normally at this time of year, when generation in the hydro plants are down, the gas plants, which currently contribute about 80 per cent of the generation capacity, will ramp up to cover the shortfall in generation of hydros.

“Unfortunately, at this time of the year when the gas plants are supposed to improve generation, we have had a number of multiple events that contributed to their lack of capacity to deliver on the shortfall of generation.”

Starting from the Okpai plant, owned by Agip and the Nigerian National Petroleum Company (NNPC), the chairman stated that the pipelines were disrupted in obvious acts of vandalism, which further affected generation in the plants.

He noted that there were issues with the gas-powered plant in Calabar with generation capacity of about 500 megawatts owned by the Niger Delta Power Holding Company (NDPHC).

Added to that, Garba noted that the Afam 6, owned by Shell, had supply issues from Okolobo plant, which required some refurbishment, explaining that the multiplicity of events, “presented a perfect storm for the industry.”

He said, “But I want to say that on a positive note, all hands are on deck to remedy the situation with gas supply being restored to the Okpai plant and because there is also another plant that has just been completed on the same side. We recently had a meeting to discuss how that can also be brought on board to cover the shortfall in generation.

“The Okpai plant that has gas challenge from the Okolobo gas processing plant, we had a meeting two days ago to see how NNPC and Shell can expedite the repair of the gas plant so that the plant can also combine to cover generation.

“So we also have the Niger Delta power plants. The federal government has invested in 10 new power plants of which eight are in operation; most of them affected have gas shortages because they haven’t contracted officially for gas.

“Now, the discussion we have had in the last 24 hours has been for the Nigerian gas market and company to now contract for gas for those clients, so that they can also compulsorily not only restore our generation capacity, but also exceed what we’ve been doing.”

He explained that by March 21, what was being done would have materialised to produce “very firm generation capacity.”

Asked to react to a comment by Minister of Finance, Zainab Ahmed, that subsidy had been fully halted in the electricity sector, he confirmed that in the past four or five years, the level of subsidy had gradually been reduced, but did not say whether it had now completely stopped.

He said, “All of you can understand that you cannot run the electricity market on life support and a situation that investors will not get the kind of return on investment until government steps in to provide the required funding itself.

“The subsidies have been, at one time, as high as N600 billion a year and gradually coming down, I think about N30 billion this year.”

On the Gencos debt allegation, Garba said, “There were debts that were being owed Gencos called legacy debts. It was a historical liability that is backed by the Nigerian Electricity Liability Management Company (NELMCO).

“Occasionally, there may be delays, one, two weeks, three weeks and so on. But in the course of an ongoing business, you wouldn’t say that’s the reason you cannot perform or that’s the reason why this thing is killing my business.”

The vice chairman of NERC, Musiliu Oseni, attributed the power problem to a problem with the Benin axis, saying a panel has been set up to resolve all the outstanding issues.

Oseni said, “Currently, there is an investigative team that has been set up and the commission is currently awaiting the final report of the team. The cause was the snap on that 330 kV line in the Benin axis, which cascaded into loss of 440 megawatts from Ughelli plants.

“And when you have such an event, where you lost 440 megawatts immediately, we have constrained generation availability, so that could cause imbalances in the system that can immediately cascade into total collapse.

“So the team is currently working to unravel both the immediate cause of the events and the commission is expecting the reports from TCN and in line with the grid code.”