Output from the Shell Petroleum Development Company Limited (SPDC) Joint Venture-owned Afam VI power plant in the Niger Delta region has dropped by about 40 per cent to 350megawatts (Mw) due to transmission challenge.
The Nation learnt that the power plant, which has capacity to generate 650Mw, can at most generate 450Mw because the transmission infrastructure doesn’t have the capacity to evacuate the entire 650Mw.
A document obtained by The Nation showed that besides shortage of gas commonly given as major challenge thermal power plants have transmission facilities at the power plants that are inefficient and cannot wheel the electricity produced by these plants.
According to the document, “The reliability of the existing also needs improvement. For example, SPDC JV’s Afam VI power plant, which has the capacity to generate up to 650Mw, only generates between 350-450Mw most of the time because the power transmission system is unable to evacuate the full output.”
The document, which stressed areas to address in the power value chain to ensure improved and sustainable electricity supply, SPDC JV noted the need for steady gas supply and payment of debts owed the various power sector operators.
“Sufficient funding from our JV partners would increase gas production by optimising existing operations as well as accelerate the completion of new gas development projects. Operationalising the new funding regime for joint venture oil and gas operations in Nigeria, which is expected to resolve Nigerian National Petroleum Corporation’s funding constraints in the SPDC JV, will aid in the delivery of key projects aimed at boosting gas production.
“A second challenge is to clear the backlog of unpaid deliveries of both power and gas to customers. Without the repayment of outstanding gas and power invoice arrears, and securitisation of current and future revenues, operators are reluctant to commit additional investments to grow domestic gas supply.
“Another challenge deals with the need to attract investment to further develop infrastructure along the gas value chain, for example, to create a more robust pipeline network to improve reliability of and security of supply.
“Ensuring a conducive business environment is essential to attract investments and have reliable operations. This includes a predictable regulatory, commercial and legal framework across the country and overcoming security challenges, particularly in the Niger Delta that has experienced an increased risk to personnel and property as well as the disruption to operations.”