Electricity generating companies (Gencos) yesterday said they do not get paid by Nigeria’s electricity market on the basis of their available generation capacities but only on delivered capacities to the national grid.
They said this was unlike what obtained in other privatised electricity markets of the world, adding that volumes of electricity they deliver to the grid are often converted into metered energy.
The Executive Secretary of the Gencos’ association – Association of Power Generation Companies (APGC), Dr. Joy Ogaji, said this in a response to a recent claim by the Transmission Company of Nigeria (TCN) that Gencos inflate their capacities to make financial claims.
TCN made the claim following the Gencos complaints that they were often ordered to shut down their plants so the national grid would not collapse, a development they said was an abuse of the provisions in the country’s grid code and hurrying their businesses.
“It is important to state for clarity sake, that Gencos are not currently paid on capacity declaration but only on delivered capacity. Delivered capacity in this regard means converting metered energy to capacity – a practice which is unknown or practiced by any electricity market in the world,” said Ogaji, in a statement provided to media source in Abuja.
She insisted the generation capacities declared by the Gencos were confirmed by the National Control Centre (NCC) of the TCN before allocating same to the electricity distribution companies (Discos), adding that the TCN cannot allocate what was not available.
According to her, the Gencos have available capacity well above what the transmission network can evacuate.
“It is obvious that the grid constraints and inefficient grid administration are reasons why NCC forces Gencos to ramp down on their production without taking responsibility for the associated deemed capacity payments.
“Meanwhile, it is difficult to make distinction between the alleged Discos load dropping and transmission inefficiency – which, of late has culminated into serial burning of power transformers across the grid.
“It is also noteworthy that because the grid cannot evacuate Gencos available capacity, the NCC dictates what the grid can carry,” she stated.
Ogaji, equally said that no Genco can declare the capacity it does not have because the NCC uses Supervisory Controls and Data Acquisition (SCADA) system and other electronic means to confirm their declared capacities.
“Therefore, it takes ignorance of the market flow to make such a frivolous allegation that Gencos declare false capacity which they cannot make available on demand,” she added.