Non-Payment Of Unused Power Pushes Electricity Debts To N1.66tn

The failure of power distribution companies (DISCOS) to pay for deemed capacity has pushed the debts of power generation companies (GENCOS) to N1.66 trillion in seven years.

The Executive Secretary, Association of Power Generation Companies (APGC), the umbrella body for the Gencos, Dr Joy Ogaji, said this on Wednesday at a stakeholders’ meeting on electricity organised by the Wole Soyinka Centre for Investigative Journalism (WSCIJ).

Ogaji said the available generation capacity dropped to 6,192.34 megawatts this year from 7,792.51MW in 2020 while the average generation capacity rose to 4,120.96MW from 4,050.07MW.

The association described deemed capacity is the capacity that should have been delivered, but for the system operator’s instruction to a Genco to derate or reduce its capacity to achieve grid balance and stability.

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According to her, 34.20 percent (2,117.86MW) of the Gencos’ generation capacity are currently stranded, compared to 48.03 per cent (3,742.43MW) in 2020.

She said the Gencos recorded a capacity payment loss of N151.22billion this year, N266.10billion in 2020, N256.97billion in 2019, N264.08billion in 2018, N236.47billion in 2017, N273.32billion in 2016 and N214.93billion in 2015.

Ogaji said, “The generation companies are willing to make that power available but the system is not able to take it.

“So, whether or not it is because Nigerians are not taking the power or they are not able to pay or we are having infrastructural challenges is what government needs to investigate and resolve because this is eight years post-privatisation.

“So, if we are able to utilise what is already available, which is about 8,000MW, then it will give a boost to generation companies to bring up the rest. But for eight years, we are just remaining within 3,000MW-3,500MW and maximum of 4,000MW. We are not making progress.

“The generation companies also have expansion capacity to double that 13,427MW. What is going on is not given them an incentive to boost it, and their business is, as it were, stagnant. This is in addition to not being paid for what has already been utilised.”