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NCC to support telcos in the face of new challenges

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The Nigerian Communications Commission (NCC) yesterday in Lagos said it was not unaware of the debilitating challenge faced by telcos as a result of the activities of Over The Top (OTT) service providers.

Its Executive Vice Chairman/CEO, Prof Garba Dambatta, told some licensees of the Commission during the annual stakeholders meeting with them at Lagos Sheraton Hotel and Towers, Ikeja, that much of the problems of the industry could be traced to lax governance standards.

He said the Commission expected all licensees (including those or whom the Code is not yet mandatory) to review their governance practices to better conform with the code.

Dambatta said the Commission is not disregarding the impact of the disruptive changes brought about by advancements in technology, changing values and growing efficiency. According to him,  the consequence of the mix is that businesses are having to grapple with staying alive as their turnover takes successive hits by of OTT services that are eating into traditional revenue at a pace that barely allows legacy companies room to respond to the changes taking place.

“Licensees had drawn attention to the impact on their operations and viability, and the NCC is actively weighing alternatives.

“Even as we gather here to ponder individual and collective responses to the disruption by emerging technologies, new discoveries and inventions are coming out that could diminish the value of investments being made in the telecoms sector. But are we to allow the sector to be forced into inaction because of the pace at which new technologies and systems are emerging? The response is no.

“I am aware that players in the sector are struggling to innovate and to deploy creative ideas for remaining relevant in an age when the life cycle of a concept is barely longer than six months. I assure you of the full support of the NCC in this quest,” Dambatta said.

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National News

Nigeria’s power generation drops to 3,390MW

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Nigeria’s power generation dropped to 3,390.7 megawatts on Monday as seven plants, including three built under the National Integrated Power Project, sat idle.

Electricity generation has been hovering around 2,600MW and 3,800MW as of 6.00 am every day since the start of this month, according to data obtained by our correspondent. It plunged to 2,692.7MW on June 7.

Seven power plants, namely Afam IV&V, Alaoji NIPP, Olorunsogo NIPP, Gbarain NIPP, Okpai IPP, AES IPP and ASCO IPP, did not generate any megawatts of electricity as of 6.00 am on Monday.

Total generation fell slightly to 3,429MW as of 6.00 am on Sunday from 3,461.7MW on Saturday, data from the Nigeria Electricity System Operator, an arm of the Transmission Company of Nigeria, showed.

The amount of electricity produced by the nation’s 27 power plants stood at 3,898.9MW as of 6.00 am on Friday, the highest level achieved so far this month at that time of the day.

The plants generated 4,050MW as of 6.00 am on May 30 but their total output dropped to 3,161.6MW on June 1, according to the data.

The system operator put the nation’s installed generation capacity at 12,910.40MW; available capacity at 7,652.60MW; transmission wheeling capacity at 8,100MW; and the peak generation ever attained at 5,375MW.

The nation generates most of its electricity from gas-fired power plants, while output from hydropower plants makes up about 30 per cent of the total.

Last month, the power grid experienced what the Managing Director of TCN, Mr Usman Mohammed, described as the worst system instability since he assumed office.

The data from the system operator showed that power generation plunged to zero megawatt as of 6.00 am on May 9 and 10.

The TCN, which manages the national grid, is still fully owned and operated by the government.

The grid has continued to suffer system collapse over the years amid a lack of spinning reserve that is meant to forestall such occurrences. It has suffered seven collapses so far this year.

Spinning reserve is the generation capacity that is online but unloaded and that can respond within 10 minutes to compensate for generation or transmission outages.

Out of the five power stations meant to provide spinning reserves, none has any actual reserve, with the contracted reserve put at 295MW.

The power stations are Egbin, Delta, Olorunsogo NIPP, Geregu NIPP and Omotosho NIPP.

More than five years after the privatisation, the investors who took over the six generation companies and 11 distribution companies that emerged after the unbundling of the Power Holding Company of Nigeria are still grappling with the old problems in the sector.

The sector is plagued with problems of gas supply shortages, limited distribution networks, limited transmission line capacity, huge metering gap, electricity theft, and high technical and commercial losses, among others.

The financial viability of the Nigerian electricity supply industry remains the most significant challenge threatening the sustainability of the power sector, according to the Nigerian Electricity Regulatory Commission.

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Science & Technology

DISCOs give update on metering

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The pace of metering of electricity consumers is slow because of low liquidity in the sector, it was learnt on Thursday from the Abuja Electricity Distribution Company (AEDC), General Manager, Corporate Communication, Mr. Oyebode Fadipe.

He pointed out that metering is aligned with the issue of liquidity in the sector, stressing that where there is an issue of paucity of cash, it limits the firm’s capital expenditure.

Fadipe, who spoke in an audience participatory program of Radio Nigeria in Abuja, noted that the Federal Government has pegged a limit to which the DisCos can spend its revenue.

Besides, he said that the DisCos have not been allowed to thrive with a cost reflective tariff.
The General Manager said: “The issue of metering is tied to the issue of liquidity. Where there are no sufficient funds for investment in the sector, there is no way you can expect everything will go on smoothly.

“For instance, the fundamental part of the challenges that the DisCos and indeed the power sector experiences are that there is a limit to your capital expenditure. You have a ceiling on your budget. You are not allowed to spend beyond a particular revenue level. Then how do you want to provide all the things that you want?

“That is also with prejudice to the fact that you don’t even have a cost reflective tariff that is supposed to help you have the cash to enable you to purchase most of these things.”

He, however, revealed that in its bid to intensify efforts at metering the customers in its franchise area, the AEDC recently purchased a single vehicle for N114 million.

He said that “We (AEDC) signed the contract for N10billion for just meters alone and it was not going to give us a much as 300,000 pieces of meters for a customer population of that is over a million.

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Money

Billionaire, Otedola sells off Forte Oil

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Billionaire businessman, Femi Otedola has revealed that he has sold his interests in Forte Oil.

Otedola made the revelation on Wednesday on his verified Instagram handle, adding that he has moved on from being a player in the petroleum industry to focusing on his power generation business.

The businessman, who shared photos of the different brand changes that the oil company had undergone, wrote: “A few years ago, my team and I embarked on an arduous task of transforming a moribund petroleum marketing business, African Petroleum Plc (formerly British Petroleum) into Forte Oil Plc; a leading integrated solutions provider with solid footprints in downstream petroleum marketing, Upstream Services and Power Generation and one in which we built intrinsic value to the benefits of our shareholders.

“In line with my principle of business focus, we have divested from our marketing and upstream businesses and shall from now on focus and consolidate on the gains of our power generation business, Geregu Power Plc.

“We wish our successors the very best and urge them to build on our legacies which have been established since 1964.”

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Science & Technology

Gencos may get fresh N600bn Palliatives

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The Nigerian Bulk Electricity Trading Plc (NBET) has recommended additional N600 billion under the ‘Payment Assurance Guarantee (PAG)’ for the power generation companies (Gencos).

PAG was first set up in 2017 by the NBET to, among other objectives, mitigate the financial constraints of the Gencos, who as a result of the poor remittances from power distribution companies (Discos), do not get enough money for the power they generate. The initial fund worth N701 billion covered the Gencos’ revenue shortfalls between 2017 and end of 2018.

However, reliable sources within the power ministry, NBET, Nigerian Electricity Regulatory Commission (NERC) and industry operators disclosed that a N600 billion extension package may have been worked out and approved by the government, to continue the scheme and keep Gencos and gas suppliers running.

These sources, however, explained the Central Bank of Nigeria (CBN), which provided the first N701 billion package to the NBET on terms that included the bulk trader repaying the loan in 10 years, would also disclose the terms for the new package.

The Association of Power Generating Companies (APGC), said they were yet to be informed of the new funding window. They also noted that such funding would be another palliative to the financially-distressed Nigeria’s power sector.

“As far as we are concerned, it’s a rumour until we receive a formal notification,” said the Executive Secretary of APGC, Dr Joy Ogaji.

Ogaji, further stated: “Relative to how we feel as Gencos, these are palliatives to the symptomatic decadence of the sector. Until the government decides to move from palliatives to cure, we will continue in this unending and incomprehensive dance.”

Meanwhile, Nigeria’s electricity generation capacity has continued to wobble with the average volume of power generated into the grid in seven days – between June 5 and 11, almost at per with the volume that was not generated due to multiple constraints.

Records from the Advisory Power Team in the Office of the Vice President, Prof. Yemi Osinbajo, indicated that between these periods, the country’s average daily power supply was 3,483 megawatts (MW), while constrained volume was 3,031MW, resulting to a financial loss of N10.184 billion.

It explained the highest generation volume for the period was 3778.84MW generated on June 5, while the lowest was 3166.65MW on June 6. Similarly, the country had the highest volume of constrained electricity for this period on June 6 when 4161.7MW could not be generated and the lowest of 2794.5MW unavailable on June 10. Gas supply, water management, transmission and distribution constraints were reportedly responsible for this.

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