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Friday, July 22, 2011

Power supply: PHCN reveals its Major Problem

The disturbing level of obsolete equipment at the disposal of Power Holding Company of Nigeria (PHCN) is responsible for the deteriorating electricity supply in the country.

This follows a disclosure that the company lacks the capacity to take gas made available to it because of its aging plants.

Until now, PHCN had always given the impression that the absence of a steady gas supply was crippling electricity supply in the country.

As a result, the Presidential Task Force which developed the power road map has as a matter of urgency made the issue of gas supply to the power plants one of it cardinal points and has ensured that international oil companies are encouraged to produce more gas by increasing the price at which the commodity is purchased from them.

An oil and gas industry source told Nigeria newspapers that gas supply to PHCN facilities from oil companies through the Nigerian Gas Company (NGC) has improved steadily in recent months, “such that supply can meet with the requirement of PHCN, but the problem has been the bad state of some PHCN plants which may collapse if they get full supply.”

The PHCN plants, the source insisted, “are so old and deteriorated to the extent that if the organisation decides to take the volume of gas that is actually required, the plants will crash, as they are too weak to bear such volume of gas from the oil companies through NGC.”

A PHCN official had though attributed the shut-down of Utorogu gas plant facility by Shell Development Company (SPDC) as being responsible for the worsening electricity power supply, saying since the closure of Utorogu power plant, power generation has nose dived to about 3000 megawatts.

Nigeria newspapers investigations have meanwhile revealed that contrary to the PHCN official’s claim, Shell gas plants like - Utorogu, Obigbo, Ughelli and Okoloma are indeed up and running and have daily been supplying the market through the NGC about 500 million standard cubic feet of gas.

More than 70 percent of the gas supply from Shell facilities is devoted to the power sector.

An official of Shell who spoke with Nigeria newspaper said the Utorogu gas plant has been running for some time now and has been supplying gas to NGC to service the power sector.

“What I can tell you is that Shell supplies 70 percent of the domestic gas supply, most of which is used for power generation.”

Analysts who volunteered words with Nigeria newspapers, all unequivocally affirmed that government has failed to achieve the target it set for itself within the first quarter of this year. Power generation, they maintain, is still very bad, as Nigerians still spend so much on diesel and petrol for running their generating sets.

According to the presidential action plan which preceded the setting up of the Presidential Task Force, the government has planned to within three-six months fast-track improvement and predictability in electricity availability to Nigerian homes and businesses.

It also planned that within 3-12 months, it would take irreversible steps to promote medium- to long-term sustainable growth of the Nigerian electricity supply industry, thereby improve electricity availability to Nigerian homes and businesses within a short time frame.

Other plans contained in the action plans are: Establish and sustain effective communication with stakeholders and the Nigerian public on the Action Plan, make every Nigerian electricity consumer a responsible customer complying with tariff and service obligations, and establish a competitive power procurement framework that delivers increased generation to meet increasing customer demand.

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