The decision, which is a part of the government’s efforts to enhance the supply of power, is effective as of today, July 1, 2022. On Tuesday, an agreement was struck with the operators.
The agreement assures that the generation companies will be compensated for the gas that the gas companies supply to the GenCos and for the power that the generation companies supply to the national grid.
The new agreements imply that all 25 of the power generation facilities on the grid now have a contract in place that commits them to produce a specific amount of power and paying for it.
Consumers were given the assurance earlier in June by the Chairman of the Nigerian Electricity Regulatory Commission (NERC), that the sector would produce roughly 5,000mw as of July 1, 2022.
According to Henrietta Ighomrore, Head of Corporate Communication at Nigerian Bulk Electricity Trading Plc, NBET, who confirmed the arrangement in a chat with Vanguard, the agreement is excellent for the sector since now everyone is aware of what is expected of each operator.
Ighomrore pointed out that as part of the agreement, NERC has pushed each operator to deliver results that comply with the terms.
“The whole process is to optimize the generation portfolio and ensure efficiency in the system. This ensures all participants within the value chain are committed to improving performance and meeting the target set. The Regulator has facilitated this process to assure sustained generation within the network”, she stated.
She explained that the PPAs were not entirely new deals as they were already existing but are being partially activated because gas supply and gas transportation agreements are now also in place.
She stated: “We have 5,505mw at peak load and 4,893mw as base load. It is a good target in my own opinion. It is good for us to challenge ourselves to be able to deliver the best. It is good for all of us, let us move towards efficiency”.
The GenCos a few days ago, through the Association of Power Generation Companies, APGC, insisted that the government should provide guarantees for gas supply, but Ighomrore said “what has happened now is that the risk has been allocated to the best person that is supposed to handle it.”
