The Nigerian Electricity Regulatory Commission has approved a deal to procure 450 megawatts of electricity from the Zungeru Hydro Electricity Generation Company Limited.
This move aims to ensure the stability of the national grid and prevent the shutdown of the newly completed Zungeru hydropower plant.
The directive, issued as part of the Commission’s Order No. NERC/2024/044, is in the public interest to improve the supply of electricity to Nigerians. NERC Vice Chairman, Musiliu Oseni, acknowledged the challenges faced by the national grid, which include low generation affecting the ability of electricity distribution companies to provide consistent service.
The Zungeru Hydro Electricity Generation Company completed its initial capacity testing on May 15, showing an average generation capacity of 600MW. However, with no current contracts with off-takers, the company planned to shut down the plant pending finalization of such agreements. To avoid this, NERC has ensured the plant remains operational, injecting power into the grid to enhance service delivery.
The Commission has granted a special dispensation allowing the Independent System Operator 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.
The directive states: “The Commission… considers it necessary to ensure that the power plant remains on the grid and continues to inject power to improve service delivery to electricity consumers in Nigeria.”
Furthermore, NERC has directed the TCN-ISO to enter into an interim energy sales agreement with Zungeru for up to 450MW to address current generation and offtake imbalances, strengthening grid management. This agreement will be effective from May 16 to August 31, 2024.
For every settlement cycle, Zungeru will invoice the Market Operator for capacity and energy based on metered energy generated. The Market Operator will issue settlement statements to DisCos for the transmission and market administration services, and the energy supplied from Zungeru.
The Zungeru power plant is a significant infrastructure project with a capacity of 700MW, making it the second-largest hydroelectric plant in Nigeria. Located on the Kaduna River near Zungeru in Niger State, the plant is expected to generate 2.64 billion kilowatt-hours of electricity annually, meeting nearly 10% of Nigeria’s domestic energy needs.
The Minister of Power, Adebayo Adelabu, announced that power generation rose to 4,800MW following the completion of the Zungeru power plant, which added 625MW to the national grid.
Adelabu said, “We have started seeing improvements in our generation output. In the past few days, the output has increased from 4,200MW to 4,800MW.”
