NERC approves purchase of 450MW electricity from Zungeru plant to prevent shutdown

The Nigerian Electricity Regulatory Commission (NERC) has approved an agreement for the procurement of 450 megawatts of power from Zungeru Hydro Electricity Generation Company Limited (ZHEGC) to halt the shutdown of the plant.

According to a NERC report, dated June 3, the directive was issued further to the commission’s order no. NERC/2024/044 on the ‘Transmission System Dispatch Operation, Cross-Border Supply and Related Matters’, to ensure continuous improvement in electricity supply to Nigerians.

The commission directed the “ISO of the Transmission Company of Nigeria (“TCN-ISO”) to enter into an interim energy sales agreement with ZHEGC for up to 450MW of energy and capacity”. 

This, the NERC said, is to correct the imbalances currently experienced between generation and offtake — further improving grid management.

“In line with Section 4 of the Order No. NERC/2024/044, the sub-optimal grid dispatch experienced on the national grid is partly occasioned by low generation thereby affecting the Electricity Distribution Companies’ (“DisCos”) ability to deliver on the committed service levels to end-use customers due to frequent interruptions to manage transient and recurring grid imbalances,” the directive reads.

“The Commission further notes that the Zungeru Hydro Electricity Generation Company Ltd (“ZHEGC”) had successfully concluded its initial capacity testing on the 15th of May 2024 with a demonstrated average generation capacity of 600MW.”

‘ZUNGERU INTENDED TO SHUT DOWN’ 

According to the NERC, the company currently has no contract and had planned to shut down the plant after the capacity test, pending final contractual arrangements with potential off-takers.

The commission, however, said it considers it crucial to ensure that the power plant remains on the grid and “continues to inject power to improve service delivery to electricity consumers in Nigeria”.

“Given the overriding public interest, the Commission has granted a special dispensation that permits the Independent System Operator of the Transmission Company of Nigeria (“TCN-ISO”) to assume responsibility for the administration of settlement for power wheeled from ZHEGC for an initial period of 105 days commencing from 0.00 Hrs of the 16th May 2024,” the report further reads.

“Further to the above and to avoid the perpetual practice of limiting DisCos’ load offtake as a corrective mechanism for system imbalances, the Commission hereby directs the ISO of the Transmission Company of Nigeria (“TCN-ISO”) to enter into an interim energy sales agreement with ZHEGC for up to 450MW of energy and capacity to address the imbalances currently experienced between generation and offtake, thereby further strengthening grid management.”

The agreement, the NERC said, would be on a best-effort basis.

The commission said the interim agreement, which commenced on May 16, 2024, will be effective till August 31.