Frequent grid collapse: FG sets to integrate GenCos into gas network code

Oredola Adeola

The Nigerian Government has initiated a plan to integrate all thermal electricity generation companies(GenCos) into the Nigeria Gas Transportation Network Code (NGTNC) with a view to making gas available for them to generate unrestrained electricity for the country.

This was part of the discussion between Nigerian Electricity Regulatory Commission (NERC) and Nigerian Midstream and Downstream Petroleum Regulatory Authority, when the two regulators met with the Hydrocarbon Processing Plants, Installations & Transportation Infrastructure and Midstream & Downstream Gas Infrastructure Fund, on Monday in Abuja, to discuss collaboration aimed at ensuring adequacy of gas supply for power generation.

EnergyDay’s check showed that the meeting is coming on the sideline of complains by Generating Companies (Gencos) and other players in the electricity supply industry that the contractual target by NERC to players to generate, transmit and distribute at least 5,000MW of electricity daily to Nigerians, effective from July 1, 2022 is not feasible and achievable.

The Executive Secretary of the Association of Power Generation Companies, APGC, Dr. Joy Ogaji recently said, the government through the Nigerian Bulk Electricity Trading Company, NBET, needs to provide a letter of credit to the GenCos to guarantee gas supply.

According to her, frequent breakdown of the national grid due to insufficient supply of gas has damaged most of the units which needed to be fixed before generation can be ramped up.

However, the regulators during the meeting held on Monday discussed modalities of achieving adequate gas supply for the capacity required by the GenCos, guarantee appropriate gas quality and pressure, and ensure gradual integration of GenCo’s to the network code.

Engr. Ahmed Farouk, NMDPRA Authority Chief Executive, during the meeting said, Nigeria is currently undergoing an energy crisis therefore there is need to collaborate to ensure adequate power generation.

According to him, the regulators and other stakeholders at the meeting addressed key issues such as support to realise adequate gas supply for the capacity required, appropriate gas quality and pressure, gradual onboarding of GenCo’s to the network code.

EnergyDay gathered that the plan to integrate the thermal GenCos into the Nigeria Gas Transportation Network Code would resolve the crisis leading to frequent shutdown and collapse by the plants.

NGTNC since the introduction in August 2020 with the construction of gas pipelines across the country , has improved domestic gas market linkage between downstream demand points and upstream gas supply opportunities.

The network code has led to an upgraded gas transmission into the non-discriminatory open access regime.

The network code operates through interconnection of gas pipelines including Escravos-Lagos Pipeline System, Oben-Ajaokuta Pipeline System, Obiafu-Obrikom-Oben Pipeline System, and other pipelines managed by the Nigerian Gas Company (NGC) and used to provide services for the conveyance of gas in accordance with the terms of the Network Code as well as all other pipeline system that may be inclued , in existence or constructed in future and used to transport gas in line with the Network Code.

EnergyDay further gathered that this new development will address the governing contract agreements (the Power Purchase Agreement (PPA), Gas Supply Agreement (GSA), Gas Transportation Agreement (GTA) and the Grid connection agreement) that the GenCos reached with Bureau of Public Enterprise(BPE) prior to the takeover of the power industry on November 1, 2013.

However, GenCos at several times have revealed that none of the agreements have been implemented. This, according to them, is the reason for the non-effective power purchase agreement since 2013, responsible for the non-payment of power generated and supplied to the national grid.