Nigerians have remained in darkness in many parts of the country as the power plants under the supervision of the Niger Delta Power Holding Company of Nigeria are still struggling to generate 1,000 megawatts of electricity despite having an installed capacity of over 4,000MW.
According to a new report by the Nigerian Electricity Regulatory Commission, only the Ihovbor 2 power plant operates at 97 per cent of its capacity, generating 449MW of its 461MW capacity as of April.
From the NERC report, it was observed that other power plants operate far below 50 per cent of their installed capacity, leaving Nigerians in the dark. It was gathered from various NERC reports that for years, the power plants had remained underutilised even as the government struggles to ramp up power generation.
For instance, the 500MW Alaoji 1 power plant has not generated a single watt for many months. Similarly, the Olorunsogo 2 power plant has an installed capacity of 750MW, but it struggled to produce 24MW (three per cent) in April and none in March.
The Sapele 1 power plant generated 23MW out of its 720MW capacity. The Sapele 2 power plant generated 105MW, which is 21 per cent of its 500MW capacity. Also, Omotosho 2 was able to add a paltry 21MW to the national grid despite having a 500MW capacity. Ihovbor 1 is another power plant with 500MW, but it has been generating around 83MW, 17 per cent of its capacity.
Omotosho 1 and Olorunsogo 1 were both installed at 335MW each, but they both ran at 42 per cent each, generating 142MW and 141MW respectively in April. Omoku power plant has 150MW of installed capacity, but it currently operates at 11 per cent of this, producing 16MW last month.
Our correspondent reports that this has been the trend for years. Despite claims of an increase in power generation to 6,000MW, it was learnt that all the power plants in the country were able to generate 5,257MW of electricity last month. This is 39 per cent of their 13,625MW installed capacity.
NDPHC was incorporated under the Companies and Allied Matters Act as a private limited liability company, with shareholding fully subscribed to by the Federal, State, and Local Governments, with a mandate to manage the power projects tagged ‘National Integrated Power Projects’.
On the NDPHC website, it was explained that when the government of President Olusegun Obasanjo came into power, it made a “very serious” determination to tackle the power woes, having discovered that the problem was capacity limitation. Hence, the birth of the National Integrated Power Project.
“The NIPP means that you must have all the ingredients that make up power into one single entity (value chain). And that is whether it is fuel, gas, water, or biomass, the power turbines themselves, the transmission, infrastructure, the distribution infrastructure, all together into one ambit, hence the word integrated. Now national, because the power business is highly capital intensive, hence the project is being funded by the three tiers of government for the benefit of all Nigerians.
“When you have a system where the governance infrastructure is tailored to have such perception in terms of integration. You have smooth delivery of your services across every sector of the economy,” it was explained.
However, since the launch of the NDPHC and the NIPP, the result has been far below expectations.
The former NDPHC Managing Director, Chiedu Ugbo, said last year that the Nigerian government had invested a lot in the NDPHC, but its 4,000MW generation capacity was underutilised.
“The Nigerian federation has invested in us so much to the extent that we have 4,000MW generation capacity built with people’s funds, but it is grossly underutilised due to a number of factors outside NDPHC’s control,” Ugbo stated.
Following its years of inefficiency, the Federal Government privatised some of the NIPP plants.
In 2024, it was reported that the Federal Government was also planning to sell five power plants under the National Integrated Power Projects, estimated to be $1.15bn.
The power plants are the 434MW Geregu II gas-fired plant in Kogi State, the 451MW Omotosho II plant in Ondo State, the 750MW Olorunshogo II Plant in Ogun State, the 563MW Odukpami Power Plant in Calabar, Cross River State, and the 451MW Benin-Ihovbor Plant in Edo State.
The Minister of Power, Adebayo Adelabu, once commended Obasanjo for investing in the power even though they were underperforming due to gas constraints.
“I can tell you that the 10 Nigerian Integrated Power Projects under President Olusegun Obasanjo are there for us to see. And I’m aware they spent over $8bn out of the so-called $16bn that people bandied around. We can see those plants today.
“We have two in Olorunsogo, that is Papalanto in Ogun State. We have two in Omotosho, close to Ore in Ondo State. We have one in Benin. We have Egbema that has not been completed. We have in Calabar. We have about 10 of them. I know seven of them were completed, and they are under the management of the Nigeria Delta Power Holding Company today. They have a capacity totalling about 5,000MW.
“It was good we made those investments then, but the issue is, have we really optimised the benefit of those investments. I would say no!” he said.
NDPHC Head of Corporation and External Communication Department, Emmanuel Ojor, did not reply to messages sent to his number on the matter.
Liquidity challenge
Speaking on the matter, the media aide to the power minister, Bolaji Tunji, said different factors are responsible for the problems facing the NDPHC. He said the company can generate more power, but there is a lack of commercial value to do so.
According to him, consumers are not paying for electricity, the Federal Government is not paying for subsidies, and the distribution companies are not taking additional power.
“NDPHC can generate more than 1,000MW. They have an additional capacity of over 800MW. The reason why they can not generate more is the lack of commercial value in generating additional power.
“The energy that is currently being generated is not being paid for by consumers, and the government is also not providing the required subsidy payments. The distribution companies are also not willing to take on additional energy as they do not have a cost-reflective tariff outside of Band A,” he said.
Tunji stressed that every additional KW is a loss when they supply non-band A customers. “Until we resolve to have a good commercial tariff downstream, it would be difficult to generate more energy than our current level,” he said.
He emphasised that NDPHC has a generation capacity in excess of what it is presently generating, but there are restrictions due to the grid code.
“As you know, in accordance with the grid code, we are placed on restrictions for a number of reasons, from inadequate transmission grid availability to low demand from the downstream electricity market. Power generation is driven by demand, and therefore, if the demand isn’t there, and also in certain cases when the demand arises, there is inadequate corridor or wheeling capacity through the grid network.
“In spite of these limitations, NDPHC continues to spearhead transmission grid expansion & distribution network interventions to enable power generation to be delivered to the last mile,” he stressed.
He revealed that the company had made plans to enter into a Power Purchase Agreement with the Nigerian Bulk Electricity Trading.
“There have been a series of efforts made by NDPHC to enter into a PPA with NBET, which is ongoing. As a result of this, NDPHC is placed in the least priority bucket for dispatch in spite of NDPHC’s available daily dispatch capacity of 1500MW.
“By no small measure, NDPHC remains the largest fleet of generating units in the sector, however, the capacity remains stranded due to these impediments that constrain it from generating optimally,” Tunji concluded.
Experts react
The Executive Director of Power Up Nigeria, Adetayo Adegbemle, blamed gas shortage, PPAs with NBET, and the inability of the grid to increase energy delivery to homes and industries.
Adegbemle argued that manufacturers must be brought back to the national grid to make it viable.
“I have always said that for Nigeria to have any serious increase in Grid delivery, and to make use of the NDPHC capacity, we need a deliberate policy to bring back Industries and manufacturers back on the grid.
“We also need to stop any policy that keeps balkanising the grid, as it will not help with the goal of achieving cheap energy to Nigerian homes,” he stated.
A Professor of Energy at the University of Lagos, Dayo Ayoade, maintained that while speaking about the problem with the generation companies, one must remember there are also problems with transmission and problems with distribution, saying you can’t fix one in isolation.
“Talking about the generation companies and the NDPHC power plants, then you ask yourself why the privately-owned ones are doing better and the government-owned ones are not doing as well. Is there a problem of governance? Is there a problem meeting their targets, and what’s the consequence?” he asked.
He explained that though the NDPHC is registered like a private company, it is owned by the government and “the dead hand of the government will always suppress its efficiencies.”
He suggested that the government should improve power infrastructure and address the individual problems of each power plant.(Punch)
