Sopuruchi Onwuka

Electricity Distribution companies in the country will soon be required by the industry regulator to boost supply hours with electricity generated internally within their network concessions.

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The Oracle Today reports that the requirement which is currently being articulated by the Nigerian Electricity Regulatory Commission (NERC) will entail investments in scalable electricity generation stations which would distrusted within the areas covered by each of the nation’s 11 distribution companies.

Chairman of NERC, Mr Sanusi Garba, told The Oracle Today in Lagos that the embedded generation plan forms part of the measures being taken by the commission to ensure incremental power generation volumes from July when overall generation floor level in the national grid scheduled to be 5000 megawatts (MW).

He said that the distribution companies would either invest in own embedded power generation or enter power production deals with third party producers to ensure that supply adequacy in the areas covered by their electricity retail networks.

He explained that the plan which would soon come into effect is part of the wider embedded generation programme designed by the commission to encourage private power producers seeking commercial opportunity in the Nigerian Electricity Supply Industry (NESI) to seek partnership with the licensed retailers in pushing supply to the underserved and totally unconnected parts of the Nigerian society.

The Oracle Today reports that Geometric Power Limited operated by the former Minister of Power, Prof Barth Nnaji, has already aid a model for embedded generation in the country through its insular network that serves industrial clusters in Aba, Abia State.

Mr Garba said that the initial commercial dispute arising from concession rights between Geometric Power and Enugu Distribution Company has now been resolved to provide model for companies seeking to operate different partnership models in boosting investments in generation and network capacity expansion to copy.

He however made it clear that the existing distribution companies operating network area concession in the country will be required to make mandatory investments in scalable power generation modules to boost customer experience as the commission prepares to reset the industry to run on ideal market principles where demand provides incentives for commercial investments in products and services.

To ensure that the system operates in commercial basis, Mr Garba said the prevailing commercial relay between different investment groups in the gas-to-power programme of the government would henceforth be governed by biding contracts that guarantee effective demand and market returns.

The contracts, he explained, brandish revenue opportunities in terms of guaranteed earnings through effective demand, reasonable tariffs and satisfactory services. He added that the contracts governing supplies in the system also provide for penal incentives to guard against defaults.

On strengthening the supply infrastructure, Mr Garba stated every segment of the players in the market has been mobilized to step up to their respective plates in the value chain. Gas suppliers are now under contract to meet demand in the upstream power sector, the transmission company has been required to strengthen the grid capacity to take rising loads, and the distribution companies would now meet their obligations to customers and service providers.

The chain of contracts and binding agreements, according to Mr Garba, means that the services of the Nigerian Bulk Electricity Trading Company (NBET) might become unnecessary in the near future as the debts in the market begin to blow down.

NERC said the only problem that would pose a threat to the new supply stability plan would be transmission systems collapse when power generation drops too low. He said NERC has envisaged that and was already planning generation plant redundancy in the system to guarantee grid uptime.

And in the case of grid collapse as the nation has witnessed in recent times, he explained, the country would still not fall into darkness if all the discos have separate contingency generation arrangements that would wheel in power from embedded generation stations.

He said all measures in the new market arrangement are designed to ensure that consumer experience is significantly enhanced to effectively address the high average technical, commercial and collection (ATC&C) losses and yield sustainable market returns to pay all invoices in the full business loop.