The Managing Director of Niger Delta Power Holding Company of Nigeria (NDPHC), Mr Chiedu Ugbo, in this interview with journalists in Lagos, highlighted the achievements and challenges confronting the company. Olatunde Dodondawa brings exerpts:
What are the challenges confronting the company regarding gas supply to its power plants
We have gas supply agreement negotiated for most of our power plants. The recent one signed is for Calabar power plants. A lot of investments were made by local companies building the gas pipeline from Akwa Ibom State to Calabar in Cross River, crossing many rivers.
We have full gas for Calabar, yes the challenges are there, but the gas is guaranteed.
In the gas agreement, you have to take 80 per cent of the gas supplied or you pay for it.
But that doesn’t mean that if you pay you have lost it, we have what you call make-up gas, when you pay for it, we keep it for you. All is just to assure some certainty in investment.
The federal government is also working to ensure that Calabar is effectively dispatched. We have five units and they are all good, they have good evacuation system and Calabar line to Ikot Ekpene is very good.
What is the value of the investments on these projects?
So far, we have invested about $4billion on generation plants. We have had offers from prospective investors who want to buy 80 per cent stake in the plants at about $5.7billion. So the record I have shows that we have spent about $4billion. For distribution lines, we have spent about $1billion on projects all across the country and slightly over $2bilion as well for the entire transmission projects.
The Minister of Power, Works and Housing, Mr. Raji Fashola, recently said Nigeria has 7000 MW, but Nigerians are saying it doesn’t result in improved power supply, kindly explain sir.
In energy economics, there is a differentce between installed capacity and available capacity.
What the minister has said was that we have a minimum of 7000MW available, that is the one that has no mechanical issue, so that any time you call them they will come up and that’s the available capacity.
But you noticed that we are not doing 7000MW now, so there is another concept which is actual generation, which we have been doing close to 5000MW.
We have hit 4000MW many times in the past two weeks and that’s the actual generation and that is where the issue of load rejection comes in.
So you have well above 7000MW available and if the system operator, that is National Control Center (NCC) says we should come up with two to three units and we are able to come up and we are able to come up full load and the distribution companies are not able to take full load, this becomes a challenge because as you know, power has to be consumed immediately.
We have never gone below 4000MW in the last six months, though not all are from our power plants because we are not there yet but as we make this progress, it is good for us to also show it. From our 10 power plants, we have roughly 2900 and 3000 MW availability in those plants.
What is the way forward on maximizing output from the NIPPs
We are not sleeping until we get this power to the end users. There is no use having generation plants sitting idle and the challenges we had when we came in and having resolved them, we met new challenges at the distribution end and we have also moved in in that distribution end. We are working and you will see the result soonest.
At the time the bidders emerged in 2014, I mentioned that there were a number of challenges to completion of the transaction; some were internal to us and some external.
The internal ones, included the completion of the plant, the necessary agreement, like the gas supply and purchase agreement. Yes, in resolving these challenges that was when we went back to His Excellency, Vice President Yemi Osinbajo, to let us put these sales in phases, as we complete the issues and the three that are on the table, that have advanced. I mentioned Calabar that we have gas supply agreement and we also have all the agreements for Calabar and we are very good to go. The second one is Omotosho and the third one is Geregu.
How do you intend to resolve disputes with the distribution companies?
A lot is being done to reset the market and resolve the challenges the Discos are facing and on our part, we are also stepping in to deal with the infrastructure challenges they are having and to make more impact. The truth is that there have been some major improvements from the feedbacks we get and we are working to make sure that it gets across board and everybody gets adequate power supply.
And also the project we are also doing for the under staffed communities. We have 20000 solar home system we are rolling out and we have launched that in a village near Gwagwalada in Abuja with the Vice President and we have rolled out 5000 units across the northern region.
There are some villages without any electricity at all and we thought about providing it to them, rather than relying on kerosene and candle so that they too will have some small solar unit and electricity; we are working on that.