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Published On: Tue, Jun 5th, 2018

GENCO clarifies on TCN’s allegation of false generation capacity

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The Transmission Company of Nigeria (TCN)

By Etuka Sunday

Electricity Generation Company (GENCOs) has provided clarifications on the allegation by the Transmission Company of Nigeria (TCN) that GenCos falsify their capacity declarations for financial claims.
The umbrella body of the GENCOs, the Association of Power Generation Companies (APGC) described the allegation as malicious, baseless and an exhibition of ignorance of the electricity market proceedings.
It is important to state for clarity sake, that GenCos are not currently paid on capacity declaration but only on delivered capacity.
Delivered capacity in this regard means converting metered energy to capacity – a practice which is unknown or practiced by any electricity market in the world.
The TCN said recently that most power plants submit generation capacities they are unable to deliver when its subsidiary, the National Control Center (NCC) make such demand.
“The NCC operates strictly in line with the grid code and merit order. Stability of the national grid is paramount. Unfortunately many GENCOs due to greed, destabilise the grid through illegal practices in order to collect more money from NBET.
“They do so through false capacity declarations, unwillingness to put their generators on effective frequency response, delay in executing NCC dispatch instructions, intimidation and blackmail of NCC operatives,” the TCN said in a statement by its spokesperson, Ndidi Mbah.
The APGC in a statement through its Executive Secretary, Joy Ogaji on Sunday strongly disputed the allegation.
She explained that capacities declared by the GenCos are confirmed by the Power National Control Centre (NCC) before allocating same to the Discos and cannot allocate what is not available.
Gencos have available capacity well above what the Transmission Grid can evacuate and the question is, why is the national grid that has a capacity of about 12,000MW not able to evacuate 7,500MW?
Can the DisCos alleged load dropping account for TCN’s inability to evacuate the GenCos available Capacity?
It is obvious that the grid constraints and inefficient grid administration are reasons why NCC forces GenCos to ramp down on their production without taking responsibility for the associated deemed capacity payments.
Meanwhile, it is difficult to make distinction between the alleged DisCos load dropping and Transmission inefficiency – which, of late has culminated into serial burning of power transformers across the grid.
It is also noteworthy that because the grid cannot evacuate GenCos available capacity, the NCC dictates what the grid can carry.
No GenCo can declare the capacity it does not have, because the NCC uses SCADA and other electronic means to confirm every GenCos declared capacity.
Therefore, it takes ignorance of the market flow to make such a frivolous allegation that GenCos declare false capacity which they cannot make available on demand.
In addition to the NCC’s capacity monitor, the Nigerian Bulk Electricity Trader (NBET) as well as the Independent System Operator (ISO) periodically send their teams to carry out capacity test on all GenCos to re-confirm NCC’s capacity data.
Faulting TCN’s claims, the APGC boss said in a regulated electricity market such as ours, operators and Market Participants are bound by regulations and rules and not frivolity as portended by TCN.
She further stated that since TCN, through its subsidiary, the NCC, is the source of all power sector data, as they relate to power Generation, Transmission, Distribution and consumption/demand forecast, the allegation of falsified capacity declaration was worrisome.
This allegation, she pointed out, was indicting, not just the current administration’s efforts to increase power generation in the country, but also efforts by all players in the value chain, as they were being portrayed as relying on fraudulent data.

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