Eko, Ikeja, Abuja Discos to Implement Bilateral Power Purchase Deals with Gencos This Year
Peter Uzoho
Three power distribution companies (Discos) including Eko, Ikeja and Abuja Discos will be implementing bilateral power purchase agreements with some Generation Companies (Gencos) of their choice before the end of this year, Managing Director of Eko Disco, Dr Tinuade Sanda, has revealed.
Sanda disclosed this during an exclusive interview with THISDAY in commemoration of her one year in charge of the power distribution company.
She noted that the Nigerian Electricity Regulatory Commission (NERC) had singled out the three Discos as the excellent Discos to start the innitiative.
Sanda said when the bilateral power deal between the three Discos and Gencos take effect, Nigerians would be able to witness improvement in power supply towards the end of the year as the Discos will now be dealing directly with Gencos.
She described the implementation of the partial power activation by the market participants last year, which was ‘botched’ as a step in the right direction.
Sanda stated: “Towards the end of the year we should see some improvement. Some part of last year was really bad. This year is looking better and we hope that it continues to improve. So, in my opinion, I feel that that partial activation implementation was a good one, the right step in the right direction.
“I know that the regulator has been talking about Eko, Ikeja, Abuja Discos being the excellent Discos to start full bilateral. What it means is that we are looking to implement bilateral before the end of this year. When this commences, we will be dealing directly with the Gencos and that is when the real change will start in the power sector.
“So, I will buy the energy that I want, I pay for the energy I want, there is gas commitment for the energy that I want to buy. And at the same time, I know that the regulator is trying to be careful in ensuring that they are able to balance the grid, they are able to balance every other interest because everybody in Nigeria is also important, they are all entitled to receive power.”
She, however, noted that lessons had been learnt from the implementation of the failed partial activation, stating that with the introduction of the partial activation last year, there has been some discipline in the sector.
THISDAY had reported last month that the hope of an improved power supply in Nigeria may have evaporated with the failure of the anticipated minimum 5000 megawatts (mw) Power Purchase Agreement (PPA) activated by market participants in the second quarter of 2022 under the coordination of NERC and the Nigerian Bulk Electricity Trading Plc (NBET).
NERC had on June 15, 2022 announced in Lagos that market participants including Gencos, Discos, Transmission Company of Nigeria (TCN), gas suppliers and the Nigerian Bulk Electricity Trading (NBET) had signed a contract that would ensure that at least 5000mw of power was generated, paid for 100 per cent and successfully delivered to consumers on a daily basis with effect from July 1, 2022.
But Gencos attributed the collapse of the partial activation to the imposition of the contract and its terms on them, as well as the lack of key contractual details in the agreement document handed to them by the regulator.
However, as a fallout of the partial activation, Sanda stated that stakeholders have upped their game and were being careful of not incurring liquidated damages, adding that there was improved efficiency arising from the activation.
She observed that the gas challenge in the power sector still remains while the vadalism of power facilities was still happening, pointing out that those issues were being addressed by the government.
Sanda added that the securitisation of premium waterfall for the gas companies has also given some level of assurance to the gas companies that they would get paid, maintaining that that has improved and helped generation to some extent.
