The NESI Components: Exploring the Transmission Sub-Sector

Introduction

The Nigerian Electricity Supply Industry (NESI) is primarily made up of the Generation Companies (GenCos), the Transmission Company of Nigeria (TCN), the Distribution Companies (DisCos), and the consumers. The NESI transmission network is used for the bulk movement of electrical energy from a generating site, such as a power station or power plant, to a substation where voltage is transformed and distributed to consumers or other substations. The interconnected lines that enable the movement of electrical energy are known as a “transmission network,”. These form an electrical power transmission system or, as it is more commonly known, the power grid.

The Transmission Company of Nigeria (TCN) owns and manages the 330kV and 132kV kV transmission lines and substations’ infrastructure constituting the power transmission system. The TCN interconnects 27 GenCos and load centers of the 11 Discos, making up the Nigerian electricity grid. Power is wheeled from the transmission system through over 840 transmission/distribution interfaces (33kV feeders radiating from 132/33kV transformers); three international connectors (to export power to utilities in Benin Republic, Togo Republic, and Niger Republic); and 18 eligible customers on 132kV and 33kV networks.
The Transmission Company of Nigeria has a total of 196 substations: 43 330KV and 153 132kV substations spread across the country.

Background

The TCN is one of the 18 successor companies of the former Power Holding Company of Nigeria (PHCN). The TCN was established as part of the power sector unbundling in line with the Electric Power Sector Reform Act (EPSRA) of 2005. The electric utility is owned by the federal government and holds the Transmission Service Provider (TSP) license and System Operations (SO) license from the Nigeria Electricity Regulatory Commission (NERC).

The TCN performs three primary functions: the provision of transmission services, system operation services, and market operation services. As the Transmission Service Provider (TSP), it is mandated to carry out the national grid’s planning, expansion, operations, and maintenance. As the System Operator, the TCN is required to dispatch generating units, manage, coordinate, and supervise the power grid, procure ancillary services, and perform load forecasts for the grid. Finally, the Market Operations (MO) services of the utility include market administration, market rules implementation, and managing market participants.

The TCN is a member of the West African Power Pool (WAPP), an agency committed to improving energy flow across the Economic Community of West African States (ECOWAS). The WAPP achieves this through joint financing between member countries for better sustainability of regional power projects. In furtherance of this collective objective, the TCN provides bulk power supplies to countries like the Republic of Niger, the Republic of Benin, and Togo.

Analysis

The unbundling of the Transmission Company of Nigeria has been proposed. The rationale is to ensure that the NESI can effectively consolidate the gains experienced since the passage of the Electric Power Sector Reform (ESPR) Act, 2005. In 2013, NERC issued two licences to the TCN to carry out Transmission Service Provider (“TSP”) and System Operation (“SO”) functions, in line with Sections 25(d) & 26(1) (i-ii) of EPSRA. However, the issuance of the SO license is envisioned to be on an interim basis pending the establishment of an independent SO (“ISO”), consequent upon a declaration by the Minister of Power that a more competitive market be established or initiated in line with section 24 (2) of the EPSRA.

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Following the declaration of the Transitional Electricity Market (TEM) in 2015, many factors have led to the clamour for the separation of the activities of SO and MO from the TCN, leaving the TCN with the sole responsibility of providing transmission services – TSP. These factors include the growth of the electricity market, activities across the value chain, and the need to ensure efficient coordination, control, and engender discipline in managing the Nigerian electricity transmission grid. In addition, the separation is considered the only way the System Operators and Market Operators can provide non-discriminatory and efficient system and market administration services to all market participants, considering the degree of privatization that has occurred and the existence of potentially competitive entities.

The lack of separation between the SO/MO and the TSP has led to the vulnerability of SO/MO functions to undue interference under the complete management of the TCN. Having the SO/MO under the same management control as the TSP is viewed as hindering the ability of the system and market operators to independently and efficiently implement the provisions of ESPRA, the Grid Codes, Market Rules, and regulatory directives by NERC.

Challenges and Recommendations

Some challenges currently affecting TCN include:

• The 132kV system (330/132 kV substations, 132 kV overhead lines, and 132 /33 kV substations) faces the most constraints due to old age, inefficiency, defective components, and undersized conductors.

• Lack of operating reserves.

• A substantial amount of transmission and generation stations do not have Supervisory Control and Data Acquisition (SCADA) and Telecommunication systems for sharing data.

Some urgent actions required by TCN to resolve these challenges include:

• The procurement of additional transformers.

• The upgrade of existing lines and the creation of alternative lines.

• The deployment of asset performance systems to monitor the condition of assets.

• The procurement of critical spare parts.

• The procurement of reserves to help limit the frequency of system collapses.

• The procurement of a new SCADA System and integration of the Internet of Things (IoT) into transmission operations.

Conclusion

The TCN is an integral part of the NESI, providing transmission services, system operation services, and market operation services to Generating Companies, Distribution Companies, international customers, and eligible customers.

Although currently operating as TSP and SO, the TCN plans to separate these functions as required by Section 26(7) of EPSRA. In order to do this, the utility needs to improve and resolve some of its challenges, especially the lack of a SCADA system. This will help support the optimal functioning of the ISO and the overall management of the country’s electricity grid.