The Federal Government has mandated system operators in the Nigerian power industry to supply not more than 6% of total available grid generation per hour to international customers or off-takers.
In a new order by the Nigerian Electricity Regulatory Commission (NERC) to electricity generation companies on Saturday, the regulator stated that the priority system of prioritising international customers and limiting distribution companies (Discos)’ offtake during times of imbalances in the grid is both inefficient and inequitable.
According to the new order, the aggregate capacity to be allocated by electricity generation companies to international off-takers in the next six months shall not be more than 10% of Genco’s generation capacity.
- It stated, “The System Operator shall ensure that the maximum load allocation to international off-takers in each trading hour shall not be more than 6% of the total available grid generation.
- The aggregate capacity that can be nominated by a generating plant to service international off-takers shall not be more than 10% of its available generation capacity unless in exceptional circumstances a derogation is granted by the Commission.”
Furthermore, the new order mandated the system operators and the Transmission Company of Nigeria (TCN) to install IoT meters at all offtake and delivery points of Eligible Customers, bilateral supplies, cross-border trades, and outgoing 33kv feeders of the DisCos to provide real-time data on supply to offtakers.
The new order also mandates the system operator to publish hourly readings of adherence to grid instructions to check for violations of offtake contracts and also publish the previous day’s hourly log reading to market participants.
What this means
The Federal Government has observed that electricity generation companies in times of low grid availability prefer to supply to international customers sometimes above the allocated offtake on the bilateral contracts.
The NERC noted that such practices have caused untold hardship to Nigerians due to irregular supply to Discos, especially during times of high demand, hence this order.
By the order, the Federal Government is prioritising electricity supply to local customers- industrial and residential- following the hike in electricity tariff to Band A customers and the need to ensure the set hours of electricity supply to different categories of local customers is met.
