NERC okays 450MW deal to avert Zungeru plant shutdown

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The Nigerian Electricity Regulatory Commission (NERC) has sanctioned a deal to procure 450 megawatts of electricity from the newly completed Zungeru Hydro Electricity Generation Company Limited. This move, driven by the need to enhance grid stability and ensure a continuous electricity supply, follows NERC’s directive aimed at addressing sub-optimal grid dispatch and frequent power interruptions. The Zungeru plant, which successfully completed its initial capacity testing with an average generation capacity of 600MW, faced potential shutdown pending contractual agreements with off-takers.

To prevent the shutdown and maintain power supply, NERC has granted a special dispensation allowing the Independent System Operator (ISO) of the Transmission Company of Nigeria to manage the settlement for power from Zungeru for an initial period of 105 days starting from May 16, 2024. This arrangement is intended to bridge the gap between power generation and offtake, thereby improving the performance of electricity distribution companies (DisCos) and ensuring better service delivery to end-users.

The administration of this agreement involves Zungeru invoicing the Market Operator for capacity and energy based on metered energy generated. The Market Operator will issue settlement statements to DisCos for both transmission and market administration services, and the energy supplied from Zungeru will be allocated to DisCos on a pro-rata basis. The prioritization of settlements for Zungeru’s energy supply will be managed by the Nigeria Electricity Supply Industry Stabilisation Securities Limited, ensuring a streamlined process that supports the stability and reliability of Nigeria’s electricity grid.

Source: PUNCH

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