“Light Up Nigeria” initiative: NDPHC proposes bilateral power sales to unlock 4000MW amidst N190bn market debt

Oredola Adeola

Amidst the company’s market debt of N190 billion from the Central Bank of Nigeria (CBN), Nigerian Bulk Electricity Traders (NBET), and others, the Niger Delta Power Holding Company (NDPHC) has recommended bilateral power sales collaborations with electricity Distribution Companies (DisCos) and other bulk purchasers as solutions to distributing its 4000 MegaWatt of electricity, addressing the challenges of power plants’ commercial operations, and increasing electricity supply to homes and businesses in Nigeria.

Mr. Chiedu Ugbo,  NDPHC Managing Director made this revelation in his presentation on his company’s Light-Up Nigeria Initiative at a media roundtable held in Lagos, on Monday.

EnergyDay gathered that the Light-Up Nigeria Initiative, being championed by the national power company, is a key component of the NDPHC’s strategy to increase electricity supply to meet the growing demand in Nigeria.

The Managing Director, NDPHC further emphasised that the company is focused on resolving the electricity supply challenges in Nigeria through NDPHC’s Light Up Nigeria initiative.

According to Mr. Ugbo, power trading agreement under bilateral power sales collaborations with electricity Distribution Companies (DisCos)  and other bulk purchasers will ensure that investment is mobilised for end-to-end solutions that will guarantee that electricity is delivered to customers and NDPHC (GenCo) is paid for the electricity generated.

The MD NDPHC further stated that apart from Eligible Customers Regulations and Electricity Acts 2023, bilateral power sales are another major solution available in the power sector to address the stranded power challenges of GenCos and Power Plant’s commercial operations.

Ugbo, further stated that despite grappling with a significant N190 billion market debt from various entities, including the Nigeria Bulk Electricity Trading (NBET), the Central Bank of Nigeria (CBN), and the Nigeria Electricity Liability Management Company (NELMCO), his company is making strides in illuminating Nigeria.

According to him, the challenges, despite their intensity, present good private investment opportunities for optimizing the company’s generation potential.

“NDPHC’s efforts to enhance electricity access and address the nation’s power challenges underscore its commitment to national development amid financial challenges.

“The NDPHC’s Light-up Nigeria Initiative is executing a program through bilateral contracts to utilize stranded and abandoned power generation assets for ensuring a dependable supply to eligible (maximum demand) customers,” he said.

Ugbo further noted that the significance of the Light Up Nigeria initiative, spearheaded by Senator Kashim Shettima, the Vice President who doubles as the NDPHC’s Chairman, is geared towards prioritizing sales to bulk purchasers and developers who consolidate electricity demand.

He said, “The initiative offers a sure path to being able to sell a significant part of NDPHC’s stranded capacity to light up businesses and homes,” adding that the company targets 97% availability to Nigerians.

Bemoaning the power issue in the country, the NDPHC revealed that its operations are hampered by several systemic challenges which have significantly affected its cash flow, but which put differently, present good private investment opportunities for optimisations of its generation potentials.

The MD identified some of its challenges to include Transmission constraints due to inadequate Transmission and Distribution Grid capacity to evacuate energy generated from the power plants.

He also revealed that the company faces a power allocation discrepancy of 975MW Peak Periods, and 757MW Off-Peak despite Mechanical Availability.

He mentioned that the insufficient transmission and distribution grid capacity to transport energy produced by power plants was a concern.

The NDPHC MD further disclosed that the constraint on evacuation is worsened by the System Operator’s (SO) frequent directives to start up and shut down plants, ostensibly for frequency and load control to uphold system safety and reliability. However, this results in heightened turbine stress, more unplanned outages, and substantial maintenance expenses.

He said, “The NDPHC has currently achieved an installed capacity of 3,585MW at the ambient temperature of the site, with a nameplate capacity of 4,000MW and an additional 787.5MW under construction.

“Despite these accomplishments, operational hindrances stemming from systemic challenges have notably impacted its cash flow. However, when framed differently, these challenges also create promising opportunities for private investment,” he said.

Ugbo added that the inadequacy of gas volumes poses a challenge in ensuring generation up to the TCN-allocated evacuation capacity of 975MW, let alone reaching the full capacity of the power plants. Currently, only the Calabar plant enjoys a complete and uninterrupted gas supply.

“The power plants in the western axis necessitate approximately 150MMSCF/day to fulfill the TCN-allocated evacuation capacity of 535MW (Peak). However, the gas supply to these plants faces additional hurdles due to low pressure on the NGIC gas pipelines, particularly ELPS and Oben-Ajaokuta.

He, therefore, emphasised that despite various interventions and government initiatives in networks, such as PPI, TREP, CBN funding, NMMP, and payment assurance measures like PAF, GSSF, PSRO, etc., the challenges related to transmission and distribution, as well as liquidity, continue to persist.

Engr. Abdullahi Kassim, Executive Director, Generation, said that the NDPHC has keyed into with the Federal Government’s energy transition agenda by embracing renewable energy power projects, that are aimed at unlocking available potentials for power generation in the country.

Kassim also disclosed that NDPHC has engaged in discussions with developers of utility-scale solar projects to develop approximately 960MW of solar plants across various locations in Nigeria, accompanied by an additional 400MW of battery capacity.

Kassim highlighted that NDPHC has achieved substantial solar system deployments through the Nigeria Economic Sustainability Plan.

“With thousands of solar systems in place, our focus is on reaching communities and homes beyond the grid, aiming to ensure broader access to electricity for Nigerians,” he said.