Why NERC ordered the purchase of 450MW from Zungeru Power Plant

• The Nigerian Electricity Regulatory Commission (NERC) has concluded a deal to purchase 450MW of electricity Zungeru Power Plant
• The Commission said the deal was to ensure that the power-generating firm remains on the national grid and avert shutdown
• Zungeru power plant recently concluded testing of its 700MW capacity but faced shutdown due to a lack of off-takers

Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment, and the economy for over a decade.

The Nigerian Electricity Regulatory Commission (NERC) has approved a deal to purchase 450 megawatts of electricity from the Zungeru Hydro Electricity Generating Company Limited.

NERC issued the directive in an order issued recently, stating that the move is to improve electricity and avert a shutdown of the newly finished Zungeru hydropower plant pending investment from off-takers.

NERC purchases 450MW from Zungeru power plant to avert shutdown Credit: Vithun Khamsong
Source: Getty Images

The directive signed by the NERC’s Vice Chairman, Muslim Oseni, acknowledged that the sub-optimal grid dispatch experienced on the national grid is partially caused by low generation, which affected electricity distribution companies’ ability to deliver on the service levels to end-users.

Zungeru Power Plant completes testing

NERC stated in the directive that the Zungeru Hydro Electricity Generation Company successfully concluded its initial capacity testing on May 15, 2024, with an average capacity of 600MW.

The Commission noted that the power-generating company indicated an interest in shutting down the plant after capacity testing pending the formalization of contractual arrangements with prospective investors.

The electricity regulator said it decided to ensure that the power plant remains on the national grid and continues to supply power to improve service delivery to Nigerian consumers.

NERC said it granted a special dispensation that allows the Independent System Operator of the Transmission Company of Nigeria (TCN) to assume responsibility for administering settlement for power delivered from Zungery for 105 days beginning on May 16, 2024.

NERC said:

FG reports improved power generation

The Punch reports that the Zungeru power plant is a significant infrastructure project that could generate 700MW, making it Nigeria’s second-largest hydroelectric plant after Kainji Dam.

The power is projected to generate 2.64 billion kilowatt-hours of electricity yearly, meeting 10% of Nigeria’s energy needs.

According to reports, the minister of Power, Adebayo Adelabu, said that power generation increased to 4,800MW following the coming on-stream of the Zungeru power plant.

He said Nigeria’s generation output has improved in the past few days, leading to an increase from 4,200MW to N4,800.

He disclosed that the increase was due to the commencement of the generation of the Zungeru hydroelectric power plant, which added 625MW to the national grid.

The Transmission Company of Nigeria (TCN) has said Nigerians are experiencing improved power, which peaked at about 5,000MW two years ago.

Ghana was thrown into a 21-day darkness 

The development comes as the gas supply from Nigeria reportedly disrupted electricity supply in Ghana.

Electricity companies in the country issued a 21-day notice, telling citizens to brace for power outages as they battle gas shortages.

NERC orders a cap on electricity export

Also, the NERC asked power-generating firms to cap electricity exports by 6 percent of domestic supplies. 

The development comes amid a high level of indebtedness and non-remittance of electricity bills supplied to the countries over the years. 

Nigeria sells electricity to neighbouring countries such as Benin Republic, Togo, and Benin under the international treaty. According to NERC’s 2023 quarter-one report, the three countries owe Nigeria a combined N22.55 billion in electricity debt. 

NERC stated that the non-payment of debts owed by international and bilateral customers continues a pattern that could cause the operator to invoke the provisions of the market rules to curtail the payment indiscipline displayed by those countries. 

NERC issues fresh instructions to DisCos

Legit.n previously reported that new guidelines have been issued by the Nigerian Electricity Regulatory Commission (NERC) to the electricity distribution companies (DisCos) regarding the execution of the April 2024 Multi-Year Tariff Order.

The statement, signed by Abba Terab, NERC’s Deputy General Manager of Market Competition and Rates, on Saturday, encompasses these directives.

In a preceding announcement, NERC mandated the prompt escalation of electricity tariffs, effective Wednesday, April 3, for customers categorized under Band A.

Source: Legit.ng