GenCos lose N229.6b to grid collapse in 11 months

Nigeria’s 21 active electricity generation plants on the nation’s electricity grid may have lost nothing less than N229.6 billion to the grid collapses that occurred in 2024, a development which is worsening the liquidity crisis in the power sector.

This is as stakeholders in the upstream segment of the power industry in Abuja yesterday said the frequent ramping down of generation equipment is putting pressure on foreign exchange as most spare parts failing more than projected due to state of transmission infrastructure.

Speaking at a workshop organised for journalists by the Association of Power Generation Companies, the industry players noted that each power lost around N10.9 billion in 2024 from the 10 grid collapses recorded by the Transmission Company of Nigeria (TCN).

A chart presented by the association showed that the year-on-year external energy losses for 2022, 2023, and 2024, decry the impacts of system collapses, system instability/high frequency, ramp-down, and unplanned outages on machines.

The data showed a significant rise in losses due to system collapse in 2024, with 57,687 MWh lost, costing N3.46 billion. This is a notable increase compared to 11,137 MWh (N345.18 million) in 2023 and 35,794 MWh (N568.49 million) in 2022.

Losses due to system instability showed that just two plants were 72,473 MWh (N4.44 billion) in 2024, compared to 57,088 MWh (N1.42 billion) in 2023 and 72,529 MWh (N1.16 billion) in 2022.

Losses from ramp-down have significantly increased in 2024 for Kainji and Jebba power plants, with 206,956 MWh lost, costing ₦12.8 billion. This is a sharp rise compared to 133,585 MWh (N3.73 billion) in 2023 and 34,344 MWh (N540.5 million) in 2022.

In 2024, unplanned outages for the two plants alone resulted 19,643 MWh lost, costing N1.17 billion. This represents a reduction in volume compared to 27,561 MWh (N809.76 million) in 2023 but a significant increase in cost. The 2022 figures were the lowest, with 6,856 MWh lost and costs at N110.85 million.

The total losses for 2024 amount to 356,759 MWh, costing N21.87 billion, which is about N10.9 billion for each power plant.

This represents a sharp rise from 229,370 MWh ( 6.3 billion) in 2023 and 149,524 MWh (N2.38 billion) in 2022.

The Chief Executive Officer of the Association of Power Generation Companies (APGC), Dr Joy Ogaji at the event raised concerns over the devastating impact of grid collapses on Nigeria’s electricity generation sector, citing both technical and financial challenges.

Ogaji emphasised the urgent need for collaborative action to address the persistent issue.

“Grid collapses pose a significant threat to Nigeria’s power sector, causing frequent disruptions, equipment damage, and substantial revenue losses for Generation Companies (GenCos),” she stated.

Ogaji highlighted the dual impact of these failures; especially catastrophic damage to critical infrastructure such as generators and transformers, and financial strain from reduced power sales, penalties for non-delivery, and increased operational costs.

An energy expert, Prof. Joy Ogaji said some power generation units have an average of 22-25 starts/stops per month with the consequent impact on the maintenance factor and overall factored fired hours (FFH) bringing the outage timing of the unit closer two years instead of four years.

According to him, the overall impact of the grid collapse, unit starts/stops is pointing to a significant financial implication to the GenCos in terms of outage cost, fuel consumption efficiency and constrained power sale of the Gas Turbine.

Suggesting a way forward, he said Nigerian Electricity Regulatory Commission (NERC) should approve the procurement of Ancillary Services that provides secondary controls (Spinning Reserve)

Ogaji also asked the System operator to as a matter of urgency complete and commission the SCADA project to enable them to oversee all the power systems properly, adding that the system operator should put in effect the earlier proposed Generation Dispatch Tool (GDT), while implementing and enforcing all the provisions of the Grid Code.

“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 per cent average,” he said.