Kainji, Jebba Power Plants Suffer ?3.46 Billion Losses Due to Grid Collapse

Date: 2024-11-22

The Kainji and Jebba Hydro Power Plants, jointly operated by Mainstream Energy Solutions Limited (MESL), have incurred losses amounting to ?3.46 billion this year due to grid collapses.

This was revealed in a presentation titled "Impact of System Collapse on GenCos", delivered by the company's Operation Supervisor, Engr. Jacob John Barasuno, at a training session for Power Correspondents Association of Nigeria (PCAN) in Abuja on Thursday.

The training, organised by the Association of Power Generating Companies (APGC), also highlighted that system instability and high frequency have resulted in additional losses of ?4.44 billion for MESL from its power plants this year.

He stressed that while ramp down has gulped N12.80billion, unplanned outages have also cost them N1.17billion this year.

Summing up the negative impacts on the energy firm, he said MESL has lost a total of N21.87billion to the menace from grid related issues this year.

According to him, these have led to different commercial implications as inability to meet “their targets due to damaged equipment.”

He said it might result in inability to meet bilateral customers demand.

According to him, the company budgetary and loan requirement obligation will not be met while “contractual energy agreement might not be met, resulting to penalties.”

In her opening remarks, the APGC, Chief Executive Officer (CEO) Dr. Joy Ogaji said owing to the frequency of the grid collapses in the country, it has become necessary to make some clarification on the impacts on the power generating companies (GenCos) businesses.

She insisted that just as it is necessary to increase energy supply projection, it is also germane to preserve the lives and equipment in order to sustain economic growth.

Ogaji said: “Given the frequency of grid collapses in the country and the impact of it on our business we have thought it wise to provide clarification on how it affects our businesses

“While we certainly need a huge jump in our electricity supply projection, it is imperative to preserve lives and equipment to sustain our rapid economic growth and meet the growing demand, we therefore need to make every effort to efficiently manage all stages of value chain with intentional focus on maximizing efficiency in the entire electricity chain,” she said.

Grid collapse, according to her, poses a significant threat to Nigeria's power sector, resulting in frequent disruptions, equipment damage, and substantial revenue losses for GenCos.

“Technically, grid collapse can cause catastrophic damage to generators, transformers, and other critical infrastructure, leading to prolonged downtime and costly repairs.

“Commercially, the impact is equally severe, as GenCos face reduced power sales, penalties for non-delivery (in bilateral and cross border trades), and increased operational expenses. The dwindling resources exacerbate these challenges, making it difficult for GenCos to maintain, repair, and replace damaged equipment, ultimately compromising the reliability and efficiency of the power supply.

“Addressing these challenges requires coordinated efforts from government, regulatory bodies, and the power sector to improve infrastructure, enforce maintenance protocols, and ensure financial viability for GenCos,” she said.

 

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