The Nigerian Electricity Regulatory Commission (NERC) has sanctioned a deal to procure 450 megawatts of electricity from the Zungeru Hydro Electricity Generation Company Limited. This move aims to stabilize the grid and prevent the shutdown of the newly completed Zungeru hydropower plant while it awaits contracts with off-takers.
The directive, part of the Commission’s Order No. NERC/2024/044 on transmission system dispatch and related matters, was issued in the public interest to ensure continuous improvement in electricity supply across Nigeria. Signed by NERC’s Vice Chairman, Musiliu Oseni, the directive acknowledges that sub-optimal grid dispatch due to low generation impacts the ability of electricity distribution companies to maintain committed service levels, causing frequent power interruptions.
The Zungeru Hydro Electricity Generation Company successfully completed its initial capacity testing on May 15, demonstrating an average generation capacity of 600MW. However, without contracts with off-takers, the company planned to shut down the plant post-testing.
To prevent this, NERC has granted a special dispensation allowing the Independent System Operator of the Transmission Company of Nigeria (TCN) to manage the settlement for power supplied by Zungeru for 105 days starting from May 16. This ensures the plant remains operational and continues to supply power to improve electricity service delivery.
The commission has directed TCN-ISO to enter an interim energy sales agreement with Zungeru for up to 450MW to address current imbalances between generation and offtake, strengthening grid management. This interim agreement, effective from May 16 to August 31, 2024, will be on a best-effort basis.
Under this agreement, Zungeru will invoice the Market Operator for capacity and energy based on metered generation. The Market Operator will issue settlement statements to distribution companies (DisCos) for transmission and market administration services, as well as for energy from Zungeru, which will be allocated to DisCos on a pro-rata basis.
The Zungeru power plant, Nigeria’s second-largest hydroelectric facility, can generate 700MW and is expected to produce 2.64 billion kilowatt-hours annually, meeting nearly 10% of the country’s domestic energy needs. The recent addition of 625MW from Zungeru has boosted Nigeria’s power generation capacity to 4,800MW, according to the Minister of Power, Adebayo Adelabu.
This initiative by NERC is expected to significantly improve grid stability and electricity supply across the country, mitigating the adverse effects of power generation shortfalls experienced earlier this year.
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