The Niger Delta Power Holding Company (NDPHC) Limited has said operational challenges, including staggering N600 billion debts owed by the Nigeria Bulk Electricity Trading (NBET) and other bilateral entities, gas supply issues, transmission constraints, and low electricity uptake from the market hampering its potentials.
Jennifer Adighije, the company’s Managing Director, in a statement on Sunday, highlighted that despite NDPHC’s mechanically available generation capacity of approximately 2,000 megawatts (MW), this potential remains largely stranded due to systemic bottlenecks.
“NDPHC currently has mechanically available generation capacity of about 2,000MW that is significantly stranded due to transmission constraints, gas supply and gas transportation limitations, in addition to dwindling offtake by the distribution companies (DisCos),” she said.
She highlighted notable progress under the new management, including resuscitating five turbine units across its Calabar, Omotosho, Sapele, and Ihovbor power plants, adding 625MW to the national grid. However, Adighije noted that operational inefficiencies persist, as NDPHC’s plants are frequently ordered by the system operator to start up and shut down for primary frequency response to ensure grid stability.
“These ancillary services ought to be monetized in line with the grid code and industry regulations. However, NIPP plants are ordered to start up and shut down at the prerogative of the system operator without any form of compensation, thus leading to low utilization of capacity and operational stress on the generating turbine units,” she explained.
Adighije also pointed to inadequate transmission grid availability and low demand from the downstream electricity market as key constraints.
“In accordance with the grid code, we are placed on restrictions for a number of reasons, from inadequate transmission grid availability although this is being seriously addressed by the Minister of Power, Bayo Adelabu – to low demand from the downstream electricity market,” she stated.
“Power generation is driven by demand, and therefore, if the demand isn’t made, the plants will not generate. In certain cases when the demand arises, there is inadequate dispatch corridor or wheeling capacity through the grid network.”
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Despite these challenges, NDPHC has invested heavily in infrastructure, committing over N500 billion to transmission projects, including transformers, transmission substations, switch gears, switch yards, transmission lines, and line bay extensions, many of which are now operated by the Transmission Company of Nigeria (TCN).
“In spite of these limitations, NDPHC continues to spearhead transmission grid expansion plans and distribution network interventions to enable power generation to be delivered to the last mile underserved communities,” Adighije emphasized.
The Alaoji Power Plant, one of NDPHC’s key facilities, has faced additional hurdles due to a dispute over gas supply metering with its gas supplier, leading to the plant’s shutdown. However, Adighije expressed optimism about its recovery, stating,
“Significant steps have been taken to restore the Gas Metering Station (GMS) to provide a lasting solution to gas losses to the plant,” with plans to resume operations before the end of 2025.
Financially, NDPHC faces further strain due to its inability to secure a Power Purchase Agreement (PPA) with NBET, which has relegated the company to the “least priority bucket for dispatch” despite its substantial daily dispatch capacity.
“This has impacted the company very negatively financially and further exacerbates the stranded capacity of the company,” Adighije noted.
To address the issue of stranded capacity, NDPHC is leveraging a recent order from the Nigerian Electricity Regulatory Commission (NERC) issued on July 25, which allows generation companies to engage in bilateral trading with eligible customers.
To address the issue of stranded capacity, NDPHC is leveraging a recent order from the Nigerian Electricity Regulatory Commission (NERC) issued on July 25, which allows generation companies to engage in bilateral trading with eligible customers.
“The strategy of the new management seeks to unlock that stranded energy by dedicating significant portions of it now to eligible customers and bilateral trading arrangements,” Adighije said.
“NDPHC is prioritizing direct supply to bilateral and eligible customers to commercialize its stranded capacity, and we should soon conclude some deals with off-takers.”
Adighije underscored NDPHC’s critical role in Nigeria’s energy sector, stating, “By no small measure, NDPHC remains the largest fleet of generating turbine units in the sector, conversely, much of that capacity remains stranded due to these impediments that constrain the company from generating optimally.”
The company’s efforts to address these challenges and expand energy access underscore its commitment to powering Nigeria’s future, even as it navigates significant financial and operational hurdles.
