• 2013 tagged ‘make or break’ year for sector
• Privatisation to end in
fourth quarter
fourth quarter
FACED with the difficulties of meeting
its 2012 target for the electricity sector, the Presidency has commenced the
review of its “Power Sector Roadmap.”
its 2012 target for the electricity sector, the Presidency has commenced the
review of its “Power Sector Roadmap.”
As a mark of its determination to
deliver on its promises in the electricity sector, the Presidency has described
the year 2013 as “a make or break” year.
deliver on its promises in the electricity sector, the Presidency has described
the year 2013 as “a make or break” year.
According to a review of the
electricity sector in 2012 and projections for the future released at the
weekend, the year 2013 is a “make or break year” for the electricity sector
reform in Nigeria. Timely delivery of the 2013 milestones will guarantee a big
pay-off from 2014 and beyond in terms of improved electricity supply, impact on
the economy, and political dividends to this administration. Poor performance in
2013 will leave the reform very vulnerable and lead to gain reversals and
market confusion.
electricity sector in 2012 and projections for the future released at the
weekend, the year 2013 is a “make or break year” for the electricity sector
reform in Nigeria. Timely delivery of the 2013 milestones will guarantee a big
pay-off from 2014 and beyond in terms of improved electricity supply, impact on
the economy, and political dividends to this administration. Poor performance in
2013 will leave the reform very vulnerable and lead to gain reversals and
market confusion.
President Goodluck Jonathan had on
August 26, 2010 launched his government’s “Power Sector Roadmap”, a kind of
contract with Nigerians for stable electricity supply.
August 26, 2010 launched his government’s “Power Sector Roadmap”, a kind of
contract with Nigerians for stable electricity supply.
The roadmap, which contains a number of
policies and institutional reforms, was seen as having the capacity to expand
electricity supply and access significantly.
policies and institutional reforms, was seen as having the capacity to expand
electricity supply and access significantly.
In the project unveiled in 2010,
government had promised the implementation of a super transmission network,
generation of additional 5,000mw by international oil companies, active
exploitation of hydro, nuclear and coal power, privatisation of PHCN generation
and distribution network, a new gas pricing policy, constitution of two
presidential committees on power and the reconstitution of the boards and
membership of the Nigerian Electricity Regulatory Commission (NERC).
government had promised the implementation of a super transmission network,
generation of additional 5,000mw by international oil companies, active
exploitation of hydro, nuclear and coal power, privatisation of PHCN generation
and distribution network, a new gas pricing policy, constitution of two
presidential committees on power and the reconstitution of the boards and
membership of the Nigerian Electricity Regulatory Commission (NERC).
“In the medium term (up to December
2013), we can expect: A modest increase in the total power generation capacity
of the existing PHCN power stations (which would bring the total to just under
4,500mw); the addition of 4,775mw from the NIPP plants; and a substantial
(3,300mw) increase in power generation capacity from IPPs all by December 2013.
As such, the medium term expectation is that 14,000mw of power generation
capacity will be available by December 2013, “ the roadmap said.
2013), we can expect: A modest increase in the total power generation capacity
of the existing PHCN power stations (which would bring the total to just under
4,500mw); the addition of 4,775mw from the NIPP plants; and a substantial
(3,300mw) increase in power generation capacity from IPPs all by December 2013.
As such, the medium term expectation is that 14,000mw of power generation
capacity will be available by December 2013, “ the roadmap said.
Although certain aspects of the roadmap
were said to have been accomplished by the close of the year 2012, key aspects
like completion of the privation timetable, among others, were fraught with
postponements and disappointments.
were said to have been accomplished by the close of the year 2012, key aspects
like completion of the privation timetable, among others, were fraught with
postponements and disappointments.
But in a detailed review of the
electricity sector released at the weekend, the Presidential Task Force on
Power (PTFP) stressed that a revised roadmap was being produced. The revised
roadmap, according to the task force, would now aim to deliver the
privatisation in full by the fourth quarter of 2013, and make projections for
growth from various fuel and energy sources up to 2016.
electricity sector released at the weekend, the Presidential Task Force on
Power (PTFP) stressed that a revised roadmap was being produced. The revised
roadmap, according to the task force, would now aim to deliver the
privatisation in full by the fourth quarter of 2013, and make projections for
growth from various fuel and energy sources up to 2016.
Among other targets in the new roadmap
expected to be ready before April, according to officials, are the commencement
and conclusion of all labour settlements, severance, rationalisation and
winding down of the Power Holding Company of Nigeria (PHCN).
expected to be ready before April, according to officials, are the commencement
and conclusion of all labour settlements, severance, rationalisation and
winding down of the Power Holding Company of Nigeria (PHCN).
The Chairman of the Presidential Task
Force on Power, Beks Dagogo-Jack, in the review of the electricity sector,
called for co-operation from all stakeholders to enable government meet its
2013 targets.
Force on Power, Beks Dagogo-Jack, in the review of the electricity sector,
called for co-operation from all stakeholders to enable government meet its
2013 targets.
He said government would also this year
position the Nigerian Electricity Liability Management Company (NELMCO) as a
robust organisation to address post-handover fall-outs from creditors.
position the Nigerian Electricity Liability Management Company (NELMCO) as a
robust organisation to address post-handover fall-outs from creditors.
On the electricity sector in 2013, he
stressed: “Along with our colleagues, we made good progress over the past year.
The nation proudly witnessed the sector’s highest peak generation (4,517
megawatts) on December 21, 2012. We also achieved the highest ever level
of energy sent out per day in excess of 98,580 MWH on December 19, 2012. In
addition to these achievements, we attained a record peak in gas production and
supply to power.
stressed: “Along with our colleagues, we made good progress over the past year.
The nation proudly witnessed the sector’s highest peak generation (4,517
megawatts) on December 21, 2012. We also achieved the highest ever level
of energy sent out per day in excess of 98,580 MWH on December 19, 2012. In
addition to these achievements, we attained a record peak in gas production and
supply to power.
“Since then, we have maintained close
interaction with the system operator and the rest of the technical teams for
daily performance monitoring. We have instituted new service protocols, which
better integrate the roles of the gas supplier and the system operator for
daily energy output optimisation. We are hopeful that these initiatives
supported with the delivery of some critical transmission-distribution
interface gap-closure projects will see us putting more power on the grid in
the next coming months.”
interaction with the system operator and the rest of the technical teams for
daily performance monitoring. We have instituted new service protocols, which
better integrate the roles of the gas supplier and the system operator for
daily energy output optimisation. We are hopeful that these initiatives
supported with the delivery of some critical transmission-distribution
interface gap-closure projects will see us putting more power on the grid in
the next coming months.”
He said the sector achieved between
eight and 20 hours of steady daily supply in some parts of our major cities.
eight and 20 hours of steady daily supply in some parts of our major cities.
He went on: “By way of specific success
stories, it is worth mentioning the successful implementation of the Multi-Year
Tariff Order 2 (MYTO 2) on June 1, 2012. This was a significant reform
milestone, which forms the main enabling frame-work to attract private sector
investments and set the stage for the full transition of the power sector to a
self-sustaining market mode.
stories, it is worth mentioning the successful implementation of the Multi-Year
Tariff Order 2 (MYTO 2) on June 1, 2012. This was a significant reform
milestone, which forms the main enabling frame-work to attract private sector
investments and set the stage for the full transition of the power sector to a
self-sustaining market mode.
“Other success stories in 2012 include
the additional 1,000 megawatts of new capacity contributed from the
commissioning of some turbine units of the National Integration Power Projects
(NIPP), the 79 bids received for the PHCN successor companies, the successful bids
for the five generation companies and the 11 distribution companies. The
contributors to these key milestone successes – Nigeria Delta Power Holding
Company (NDPHC), NERC, BPE and their teams all deserve commendation and
appreciation.”
the additional 1,000 megawatts of new capacity contributed from the
commissioning of some turbine units of the National Integration Power Projects
(NIPP), the 79 bids received for the PHCN successor companies, the successful bids
for the five generation companies and the 11 distribution companies. The
contributors to these key milestone successes – Nigeria Delta Power Holding
Company (NDPHC), NERC, BPE and their teams all deserve commendation and
appreciation.”
He described the year 2013 as bearing
what he described as all the marks of the most critical year for the
electricity reform “since we must kick in the Transitional Electricity Market
this year marking the outset of a privatised Nigerian Electricity Supply
Industry.”
what he described as all the marks of the most critical year for the
electricity reform “since we must kick in the Transitional Electricity Market
this year marking the outset of a privatised Nigerian Electricity Supply
Industry.”
He went on: “From Q3-2012 we commenced
re-energizing the reform momentum. Going forward there is a sound basis
for cautious optimism which places a huge responsibility on the whole power
team for vigilance and staying the course until we have crossed the finish
line.
re-energizing the reform momentum. Going forward there is a sound basis
for cautious optimism which places a huge responsibility on the whole power
team for vigilance and staying the course until we have crossed the finish
line.
“I am also convinced that the first two
quarters of the year will challenge us to deliver some critical path milestones
without fail, such as clarity on transmission funding mechanism, conclusion of
negotiations with the successful bidders, providing for labour settlement
obligations, completion of the due National Integration Power Plant (NIPP)
generation and transmission projects, market revenue and settlement profile
improvement, securing a minimum transitional service delivery level through projects
and process optimisation, and positioning a robust Nigerian Electricity
Liability Management Company (NELMCO) to address post handover fall-outs from
creditors.”
quarters of the year will challenge us to deliver some critical path milestones
without fail, such as clarity on transmission funding mechanism, conclusion of
negotiations with the successful bidders, providing for labour settlement
obligations, completion of the due National Integration Power Plant (NIPP)
generation and transmission projects, market revenue and settlement profile
improvement, securing a minimum transitional service delivery level through projects
and process optimisation, and positioning a robust Nigerian Electricity
Liability Management Company (NELMCO) to address post handover fall-outs from
creditors.”
The review document stressed that
completion and handover of the successor companies would occur in the fourth
quarter of 2013 while the new owners would be expected to invest capital and
provide technical and managerial expertise necessary to create a robust and
dynamic power sector, as necessary for reviving the nation’s manufacturing sector,
creating jobs, and improving quality of life.
completion and handover of the successor companies would occur in the fourth
quarter of 2013 while the new owners would be expected to invest capital and
provide technical and managerial expertise necessary to create a robust and
dynamic power sector, as necessary for reviving the nation’s manufacturing sector,
creating jobs, and improving quality of life.
According to the document, “2013 will
witness the commencement and conclusion of payment of labour severance packages
to former PHCN staff. There will be enhanced capacity of NBET to sign and
execute PPAs for existing FGN assets and the first wave of new IPPs.
Bidders of privatised assets will complete full payment and handover of such
assets will be completed. The capacity of NELMCO will be enhanced to deal with
liabilities pre- and post-privatisation. The announcement of the commencement
of the Transitional Electricity Market is expected in 2013.”
witness the commencement and conclusion of payment of labour severance packages
to former PHCN staff. There will be enhanced capacity of NBET to sign and
execute PPAs for existing FGN assets and the first wave of new IPPs.
Bidders of privatised assets will complete full payment and handover of such
assets will be completed. The capacity of NELMCO will be enhanced to deal with
liabilities pre- and post-privatisation. The announcement of the commencement
of the Transitional Electricity Market is expected in 2013.”
On funding, the PTFP said it would
liaise with the Federal Ministry of Finance and Federal Ministry of Power to
completely fund and operationalise NELMCO and NBET so as to conclude all credit
enhancement provisions and allied market staging processes aimed at
securitising the bulk trader’s activities and all processes to enable the
earliest declaration of the Transitional Electricity Market (TEM) stage.
liaise with the Federal Ministry of Finance and Federal Ministry of Power to
completely fund and operationalise NELMCO and NBET so as to conclude all credit
enhancement provisions and allied market staging processes aimed at
securitising the bulk trader’s activities and all processes to enable the
earliest declaration of the Transitional Electricity Market (TEM) stage.
“The PTFP will also work with these
ministries to ensure the timely release of the MYTO subsidy. NERC will
increase co-operation with other agencies and market participants at this
critical stage of market development,” the document noted.
ministries to ensure the timely release of the MYTO subsidy. NERC will
increase co-operation with other agencies and market participants at this
critical stage of market development,” the document noted.
Source: Guiardian
