GenCos lost N21.9bn to grid system collapses, others in 11 months

By Chris Ochayi

The power Generation Companies, GenCos, yesterday posted a cross loss of N21,873,684,285 to national grid collpses and other sector’s encumbrances between January and November 2024.

The companies also announced a record loss of 356, 759 Megawatt-hour of electricity within the period under review.

Other areas where the recorded financial and MW-h losses occured include system instability or high frequency, ramp down and unplanned outages.

This monumental loss according to them was outside the collateral damages done to their installations as result of the national grid collapses.

The GenCos stakeholders disclosed this at a one-day training workshop organized by the Association of Power Generation Companies, APGC, the umbrella body of Generation Companies, GenCos, for members of Power Correspondents Association of Nigeria, PCAN, in Abuja.

Meanwhile, the experts, who made presentations during the session have called on the Federal Government to step up actions to curb the rampant incidences of national grid collpses, noting that the trend was weighing down the capacity of the GenCos with substantial revenue losses.

The commercial implications of the grid system collapses on GenCos according to them are that the generation target would not be met due to down time and damage equipment, bilateral customer demands might not be met, company budgetary and loan repayments obligations will not be met and contractual energy agreement might not be met resulting to penalties.

While blaming frequent grid collpses on obsolete equipment and lack of maintenance on the part of the Transmission Company of Nigeria, TCN, they also attributed the major causes of system collapse to adequate generation in the grid.

“Tripping of an overloaded line or feeder Tripping of fully loaded generator at very low frequency.”

They attributed cause of tripping over loaded line or feeder, old TCN infrastructure without replacement (Reactors ,breaker, CTs, isolators,) lack of maintenance of leaking transformers, generator, explosions. and vandalism of power lines and towers.

In his presentation, an energy expert, Professor Stephen Ogaji, lamented the decrease in capacity utilization which led to a decrease in revenue by the thermal station.

Ogaji, who decried the great loss in revenue due to the inability to generate power into the grid, added, “This affects not only the utilities but also the entire economic system that depends on a stable power supply.

Prof. Ogaji dwelled his presentation on understanding the impact of grid collapses & machine shutdowns on THERMAL GenCos machines: the technical & commercial implications

He said, increase in emergency trips and the number of starts due to grid obstruction leads to an increase in EOH, which increases the maintenance factor.

“An increase in Equivalent Operating Hours (EOH) value leads to an increase in the frequency of scheduled maintenance of scheduled maintenance intervals and associated downtime.

“This also causes faster wear on components of the turbine such as the combustion liners and turbine buckets”, he said.

On the way forward, Ogaji charged the Nigerian Electricity Regulatory Commission, NERC, to approve the procurement of ancillary services that provides secondary controls (Spinning Reserve)

“The System operator should as a matter of urgency complete and commission the SCADA project to enable them to oversee all the power systems properly,

“The System operator should put in effect the earlier proposed Generation Dispatch Tool (GDT)”, he said, while adding that, “The System operator should implement and enforce all the provisions of the Grid Code.”

He summed up his presentation by saying that, “From the foregoing, it is an established fact that there is an urgent need to take proactive actions to prevent the incessant disruption of normal grid operation and, by extension, improve the lives and performance of thermal gas turbines.

“Failure to do so, may lead to reduced plant availability as spares are not locally sourced and cost of generation will be astronomically high, even beyond the current 59% average contribution to end user cost.”

In her welcome address, the Chief Executive Officer of Association of Power Generation Companies, APGC, Dr. Joy Ogaji, lamented the negative impact of frequency of grid collapses in the country.

She said the impact of it on our business we have thought it wise to provide clarification on how it affects our businesses
While we certainly need a huge jump in our electricity supply projection, it is imperative to preserve lives and equipment to sustain our rapid economic growth and meet the growing demand

“We therefore need to make every effort to efficiently manage all stages of value chain with intentional focus on maximizing efficiency in the entire electricity chain.

“Grid collapse poses a significant threat to Nigeria’s power sector, resulting in frequent disruptions, equipment damage, and substantial revenue losses for GenCos.

“Technically, grid collapse can cause catastrophic damage to generators, transformers, and other critical infrastructure, leading to prolonged downtime and costly repairs.”

She stressed further that, “Commercially, the impact is equally severe, as GenCos face reduced power sales, penalties for non-delivery (in bilateral and cross border trades), and increased operational expenses.

“The dwindling resources exacerbate these challenges, making it difficult for GenCos to maintain, repair, and replace damaged equipment, ultimately compromising the reliability and efficiency of the power supply.

“Addressing these challenges requires coordinated efforts from government, regulatory bodies, and the power sector to improve infrastructure, enforce maintenance protocols, and ensure financial viability for GenCos.”