{"id":28146,"date":"2018-11-13T16:07:37","date_gmt":"2018-11-13T15:07:37","guid":{"rendered":"https:\/\/nationalwire.com.ng\/?p=28146"},"modified":"2018-11-13T16:07:37","modified_gmt":"2018-11-13T15:07:37","slug":"nerc-gas-shortage-contributed-74-of-power-sector-limitations","status":"publish","type":"post","link":"https:\/\/nationalwire.com.ng\/sub\/nerc-gas-shortage-contributed-74-of-power-sector-limitations\/","title":{"rendered":"NERC: Gas Shortage Contributed 74% Of Power Sector Limitations"},"content":{"rendered":"

The Nigerian Electricity Regulatory Commission (NERC) has disclosed that a larger part of the constraints experienced in the country\u2019s electricity sector in the first quarter (Q1) of 2018, was contributed by shortage of gas to power generation companies (Gencos).<\/p>\n

The NERC in its Q1 2018 quarterly report of activities in the sector, explained that 74 per cent of the operational constraints the market recorded within the period was from shortage of gas to the Gencos, while 18 per cent; three per cent; and five per cent of the constraints were linked to distribution; transmission and water management issues respectively.<\/p>\n

The report also coincided with disclosure by the Power Advisory Team in the office of the Vice President, Prof. Yemi Osinbajo, that an estimated amount of N461.564 billion have been earned by the power sector in 2018 on account of insufficient gas supply; distribution; transmission; and water reserves issues.<\/p>\n

According to the NERC, resolving these constraints have remained its priority, hence, its decision to begin implementing actionable items in its strategic plan for the sector.
\n\u201cAs stated in the 2017-Q4 report, resolving these constraints remains as a top priority of the commission. On its part, the commission has started executing the actionable items identified in its 2017-2020 strategic plan towards addressing constraints in transmission and distribution networks.<\/p>\n

\u201cThe commission has initiated a process for thorough technical assessment of Discos\u2019 utilisation of capital expenditure allowances for relevance and cost efficiency.
\n\u201cThe commission is also planning a tariff reset that adequately provides for revenue requirement necessary for TCN and Discos\u2019 optimal performance,\u201d the NERC stated.
\nIt added: \u201cSimilarly, to resolve the issue related to gas supply shortage, the government has started the implementation of gas payment assurance facility for power generation to enable Gencos fulfil their payment obligations to gas suppliers.\u201d<\/p>\n

Turning to the status of the country\u2019s transmission network, the NERC explained that although there was no partial system collapse in the quarter under review, total system collapse however worsened, increasing from one recorded in the last quarter of 2017 to six the first quarter of 2018.<\/p>\n

It added: \u201cFive of the system collapse incidents occurred in January 2018 while one occurred in February 2018. The system collapse was attributed to lack of generation by Egbin, Olorunsogo and Omotosho power plants, among others, due to gas constraints which resulted from the breakdown in the Escravos gas pipeline.<\/p>\n

\u201cThis incident confirms the concern that the commission expressed in the previous reports, on how sudden operational disruption in some plants could affect grid stability given the share of the industry output contributed by those plants.<\/p>

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\u201cSecond, the system collapse incident was also partly attributable to lack of adequate ancillary services which the System Operator could have used to offset the impact on the grid of the plant(s) that suddenly shut down their operation.\u201d<\/p>\n

NERC noted that it was working with the Transmission Company of Nigeria (TCN) on procurement of adequate ancillary capacity in order to forestall frequent system collapses.<\/p>\n

As regards the commercial performance of the sector, NERC stated that financial illiquidity has remained the most significant challenge affecting the industry\u2019s sustainability.<\/p>\n

\u201cThis serious liquidity challenge is partly attributed to non-cost-reflective tariffs, and high technical and commercial losses aggravated by consumers\u2019 apathy to payment arising from estimated billing and poor quality of supply in most load centres.<\/p>\n

\u201cOut of the N171.1 billion billed to customers in the first quarter of 2018, only N106.6 billion was recovered, representing 62.3 per cent collection efficiency.<\/p>\n

\u201cTherefore, out of every N10 worth of electricity sold during the quarter under review, N3.8 is uncollected. The liquidity challenge in NESI was further reflected in the Discos\u2019 remittances relative to NBET\u2019s and MO\u2019s invoices.<\/p>\n

\u201cIn the first quarter of 2018, whereas Discos were issued a total invoice of N163.1 billion for energy received from NBET and for the service charge by MO, only N51.2billion \u2013 31.4 per cent, was settled by Discos, creating a huge shortfall of N112.0 billion,\u201d the NERC report added.<\/p>\n","protected":false},"excerpt":{"rendered":"

The Nigerian Electricity Regulatory Commission (NERC) has disclosed that a larger part of the constraints experienced in the country\u2019s electricity sector in the first quarter (Q1) of 2018, was contributed by shortage of gas to power generation companies (Gencos). The NERC in its Q1 2018 quarterly report of activities in the sector, explained that 74 …<\/p>\n","protected":false},"author":6,"featured_media":24552,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":""},"categories":[23,1593,17,624],"tags":[725],"coauthors":[2391],"class_list":["post-28146","post","type-post","status-publish","format-standard","has-post-thumbnail","","category-business","category-metro","category-news","category-politics","tag-nerc"],"yoast_head":"\nNERC: Gas Shortage Contributed 74% Of Power Sector Limitations - National Wire<\/title>\n<meta name=\"description\" content=\"The Nigerian Electricity Regulatory Commission (NERC) has disclosed that a larger part of the constraints experienced in the country\u2019s\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/nationalwire.com.ng\/sub\/nerc-gas-shortage-contributed-74-of-power-sector-limitations\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"NERC: Gas Shortage Contributed 74% Of Power Sector Limitations - 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