Nigerians Experiencing Difficult February as Gas-to-power Challenge, Heat Wave Worsen Nationwide

•Adelabu says Gencos owed N1.3tn, tariff subsidy not sustainable 

•NiMET discloses heat-induced stress to persist in coming days 

•Discos beg customers over prolonged poor supply

Emmanuel Addeh in Abuja

As Nigeria’s power supply challenges worsen, there appears be no respite in the coming days, with the Nigerian Meteorological Agency (NiMET) announcing yesterday that the excessive heat being currently experienced in the country  would remain so for a while.

In the last few days, the country’s already bad electricity supply problem, had further degenerated due to gas supply shortages, mainly due to the difficulty of Generation Companies (Gencos) to settle their financial obligations to gas suppliers.

Many Nigerians, who now sleep outside, take their baths several times a day or are dealing with severe heat rashes, have recently taken to various social media platforms to lament the current situation, blaming the authorities for their plight.

Yesterday, Eko Electricity Distribution Company Plc (EKEDP) apologised to its customers, blaming gas supply issues, which it said had hobbled the ability of producers to make the product available.

“Dear valued customer, the current limited supply you are experiencing is due to low allocation from the grid resulting from gas shortages to the generating companies.

“We are working with our partners for a possible resolution soonest whilst we continue to update you as the situation progresses. Do kindly bear with us,” the electricity distributor based in Nigeria’s commercial capital, Lagos, wrote on its X handle.

Also, the Enugu Electricity Distribution Company (EEDC), said the poor power supply currently experienced across the South-east was beyond its control, attributing the situation to low energy generation, which has resulted in a drop in power supply availability.

Its Head, Corporate Communications, Mr Emeka Ezeh, appealed to residents of the area to bear with the company for the decline in the quality of service.

“We understand the inconveniences this situation has caused our esteemed customers and appeal for their understanding as it is beyond us. We can only distribute what is allocated to us,” he added.

However, in a briefing in Abuja yesterday, the minister overseeing the power ministry, Bayo Adelabu, said the problem had been worsened by the debts owed the Generation Companies (Gencos).

He described the issues as multiple technical operational problems across all segments in the value chain, but made complicated by lack of sustaining liquidity and infrastructure funding, as well as structural misalignment.

“The simple technical operational issues are: shortage of gas supplies and aging dilapidated generation machineries causing below optimal capacity utilisation,” he said.

 He also listed inadequate power evacuation capacity at Genco locations, coupled with unstable and fragile transmission lines, devoid of automated frequency controls, lacking in fail-over or back-up capacity with frequent human disturbances through vandalism and theft.

Others, he said, are: Aging weak distribution infrastructures (lines and transformer) coupled with huge meter gap causing unbearably large technical and collection losses.

“These are issues that look so simple on the surface and should ordinarily require little efforts to fix over time. However, it’s been quite difficult to get these problems fixed over the years due to the complications wrapping the entire value chain end to end.

“The major complications are: The persistent liquidity issues coming from inappropriate tariff regime, poor collections and inadequate funding of government subsidies leading to huge debts owed to the transmission, generation and gas supply companies.

“This has restricted investments required for sustaining supply flow, capacity expansion and infrastructural improvements. It has also not only discouraged lending to the sector by financial institutions as the sectoral activities are not bankable, but has also made the sector unattractive to new investors,” he said.

The second complication, he maintained, is the value chain structural issues bordering on operations and control of generation, transmission and distribution segments.

According to him, there has been an inability of the Nigerian electricity supply industry to adhere to market rules and to enforce market discipline. This, he said, has led to each segment in the value chain operating on a best endeavour principle.

Adelabu said the third complication is the lack of clear and unambiguous definition of the concept of electricity as a nation.

On the roadmap for stabilising the sector in preparation for turnaround, he said there was need for settlement of existing sectoral outstanding debt obligations to the gas supply and power generation companies, using partly cash payment and guaranteed debt instruments. 

“Settlement of existing sectoral outstanding debt obligations to the gas supply and power generation companies using partly cash payment and guaranteed debt instruments. N1.3 trillion is current debts to the Gencos and $1.3 billion legacy debts to the Gencos,” he added.

On ongoing activities in the ministry and its agencies to improve power supply, he said they include augmentation of the hydro plants and thermal plants.

The recent completion of the 700MW Zungeru Hydro Electricity Power Plant in Niger State.

He also highlighted the financing of he required infrastructure to enable complete evacuation of the 40MW Kashimbila Hydro Power Plant in Taraba state using Promissory Note facility at the Debt Management office (DMO).

In addition, he mentioned the resuscitation of abandoned 26 small and medium size Hydro plants across the country with solar hybridisation, negotiations to settle the huge outstanding debts obligations to the Gencos using cash injection and guaranteed debt instruments.

The minister said Nigeria cannot continue to subsidise electricity, adding that the nation must begin to move towards a cost-effective tariff model.

He stated that only N450 billion was budgeted for subsidy this year, but the ministry needs over N2 trillion for subsidy.

Speaking on frequent grid collapses, he said this was caused by shortage of gas, ageing machines in the grid value chain, low capacity to evacuate generated power, and destruction of power stations in some parts of the North-East geopolitical zone of the country.

He said the Transmission Company of Nigeria has over 100 abandoned projects due to variations on contract figures as a result of the fluctuations of the FX, hence the company will not award any new contracts till all such projects are completed.

The minister also said over N50 billion had been earmarked in the 2024 budget to build mini-grids to supply power to remote areas, adding that electricity Distribution Companies (DisCos) should sit, and anyone found wanting will have their licences withdrawn.

The minister also said he has reached out to the National Security Adviser (NSA), Nuhu Ribadu to help provide security for power infrastructure.

Recently, power supply has been fluctuating, sometimes to as low as 2,000mw, as the roughly 24 thermal power plants continue to shut down due to inadequate gas supply.

Typically, operators sell gas in dollars to power plants since most segments of their investments are priced in the US dollar, but Gencos have recently found it difficult to pay since they get their own payments in naira which had been badly devalued in recent months.

Upon that, they have complained of underpayments recently, with their association saying last year that the federal government owed them over N1 trillion.

Although Nigeria has a huge proven gas reserves of 206 trillion cubic feet, it has not been able to take advantage of it due to very low investment in the sector, due in part to the price regulation of $2.18 per million British Thermal Units (MMBtu) for gas-to-power charges.

Meanwhile, the Nigerian Meteorological Agency (NiMET), which is the official source for weather and climate news in Nigeria, has warned  that the excessive heat being experienced in the country at the moment would continue for a while.

On its official X handle, the agency stated that temperatures have now hit 41°C over the North and 39°C over the South,  explaining that there are severe health implications of the changing conditions.

“Air temperatures hit 41°C over the North and 39°C over the South with model projections indicating temperatures to remain high in the coming days,” it noted.

NiMET stated that these weather conditions could lead to dehydration and could  cause fainting; chicken pox disease, measles, heat rash, weakness of the body, slight fever, and dry lips.

It said it could also induce other heat-related illnesses, respiratory issues and increased vulnerability to chronic conditions.

NIMET advised Nigerians to take adequate fluids, seek shades, use fans, and wear light, breathable clothing to reduce exposure to high temperatures.

They also advised residents to avoid strenuous physical activities during peak heat hours as well as stay indoors as much as possible between 12:00 noon and 4:00 pm.