Despite the recent increase in electricity tariff by the Nigerian Electricity Regulatory Commission (NERC), the expected improvement in power supply has not materialized. As of 3 pm yesterday, on-grid generation plummeted to 3,383 Mega Watts, raising concerns about the effectiveness of the tariff adjustment.
National Grid data from the System Operator’s Grid Data Portal, analyzed by Vanguard, revealed that 19 power generation plants were on the grid at the specified time. Notably, Azura Power, which started the day at 434MW, was off-grid. Egbin Power, the nation’s largest power plant, was operating at 325MW, significantly below its daily average supply to the grid of approximately 600MW.
The NERC’s new Multi-Year Tariff Order (MYTO 2024), implemented from January 1, raised tariffs, stating that consumers would continue to pay the old rate, with the government covering the gap through a subsidy amounting to N1.6 trillion in 2024.
In an effort to align with the new tariff regime, NERC directed electricity distribution companies (DisCos) to off-take 3,963MW as part of their obligations. DisCos were instructed to secure adequate bilateral contracts to transition from the Nigerian Bulk Electricity Trading (NBET) vesting contract regime and to mitigate exposures to volumetric energy risk.
However, an inspection of DisCos’ grid energy off-take revealed a disparity. The eleven DisCos collectively had a load allocation of 3,134MW, falling short of the 3,963MW ordered by NERC. This discrepancy raises questions about the effective implementation of the new tariff structure.
In response to the decline in power generation, the Transmission Company of Nigeria (TCN) attributed the situation to a lack of gas supply to power generation companies. TCN emphasized the impact of gas constraints on thermal generating companies, leading to a gradual decrease in available generation into the grid. The statement by TCN’s General Manager, Public Affairs, Ndidi Mbah, expressed the commitment to increasing electricity supply as gas supply improves to power available thermal plants.
