Africa Energy Nigeria Electricity – PHCN Shuts Down Four Power Plants

Source allAfrica.com: Onyebuchi Ezigbo, 5 February 2010

Following the gas supply crisis which has hit Nigeria’s power sector, the Power Holding Company of Nigeria (PHCN) has shut down four of its plants, thereby reducing electricity generation to 2,700 megawatts.

Speaking at a ministerial press briefing by the Minister of Power, Dr. Lanre Babalola, yesterday in Abuja, the Managing Director of PHCN, Mr. Labo Husein, said the gas situation had become critical to the extent that most of the affected generating plants were forced to wind down operations with the attendant backlash on the available capacity to the national grid.

Husein gave the list of the affected plants to as Geregu, Sapele, Olorunsogu and Omotosho. The MD who was asked to respond to media enquiries on the state of power generation by Babalola, however said the other two power stations Okpai-Agip and Afam VI operated by Agip and Shell respectively were both running at full capacity.

“PHCN total power generation as at today is 2,700mw but actual power generation capacity is now 4,000mw,” he said. According to Husein, a lot the company’s generating facilities of had continued to remain idle due to lack of gas to power them.

Babalola, who had earlier apologized to Nigerians over the “below-target” performance recorded last year in the power sector, said the problem at improving power supply was caused by the unstable gas supply situation.

He said last year’s target of 6,000mw of electricity was made in anticipation that Chevron and PanOcean gas projects as well as gas facility being put together by the Nigerian Petroleum Development Corporation (NPDC) would come on stream as scheduled but that the gas facilities could not be completed.

The minister said militants’ activities in the Niger Delta where most of these gas facilities are located had not helped matters either, because pipeline facilities had been vandalised thereby compounding the problem.

“Only one gas plant is presently working and that is the Oturogo, while others are still being worked on. Our last year’s target of 6000mw was made in anticipation that Chevron gas project, PanOcean gas plant and the NPDC gas facilities were going to come on stream but that did not happen,” he said.

Babalola said government was however banking on the opportunity to get 1,345mw lifeline from a number of ongoing power projects such as the National Integrated Power Projects (1110mw), Wind Farm Power Project (10mw) in Katsina and LPFO/Gas thermal generation plant in Kaduna (215mw) to realise the 6,000mw target not later than March this year.

Other new generation projects expected to come on stream as the year rolls by are the Hydro Electricity Power Project in Zungeru, Mambilla (2,600mw), coal fired plant in Benue and Enugu (300mw) and small and medium gas/oil fired generating plants, he said.

The minister also bemoaned the 40 per cent power loss due to system failures, saying the level of loss was very high and unacceptable as an industry standard.

He said the Federal Government would adopting a two-pronged approach of optimising production and supply infrastructure and expansion of production and supply facilities to ensure that it keeps the power sector on a steady progress march.

He also said government was proposing a budget of N153 billion for the year to help fast-track development efforts in the power sector even as he said the ministry would be stepping up efforts to secure alternative funding from the private sector to develop the power sector.

According to him, the Federal Government would spend N79 billion in the power sector, while appropriations approved by the NIPP steering council was put at N43.292 billion as emergency funding to PHCN successor companies.
Against the background of poor performance recorded last year in project execution, Babalola said the sector had achieved over 73 per cent project implementation within the first month of this year.

Commenting on the difficulties in gas supply, Babalola said the only viable option was for government to create a right price regime for gas as a means of encouraging private gas producers to step up investment in gas production.

Speaking on the decision of government to re-focus efforts on the implementation of the reform and restructuring of the power sector, he said power generation would be liberalised to attract more independent power producers, while PHCN successor companies would be corporatized, with greater attention paid to addressing the over N400 billion legacy debts and liabilities.

Africa Energy Nigeria Electricity