June 23, 2024
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Electricity: Nigeria to Unbundle TCN into Two Entities

The Nigerian Government disclosed that would unbundle the Transmission Company of Nigeria (TCN) into two distinct entities in its plans for the overall reform of the electricity sector.

The decision for the reforms is coming barely a day after the power grid collapsed resulting in blackouts in the country.

Energy Afrique earlier reported that Nigeria witnessed another collapse of its national grid on Monday afternoon, leading to a crash in power generation from 4,032.8 megawatts to 43.5MW.

Nigeria admitted that TCN, which is responsible for managing the national power grid as well as delivering bulk electricity to distribution companies and eligible customers, has been identified as the weakest segment in the Nigerian Electricity Supply Industry, NESI.

Speaking in Abuja on Monday at the opening of a Ministerial Retreat organized by the Federal Ministry of Power, the Minister of Power, Chief Adebayo Adelabu said TCN would be restructured to become the Independent System Operator, ISO and the Transmission Service Provider, TSP.

The Vanguard quoted the minister explaining that the restructuring must synchronize with the evolving landscape of State Electricity Markets, addressing calls for the decentralization of the national grid into regional grids interconnected by a new higher voltage national or super-grid.

He observed that the goals of the reforms introduced by the government to improve power supply have largely remained unmet, urging stakeholders and operators to renew their efforts to ensure that these were achieved.

According to him, “One of the main objectives of the Nigerian electricity sector reform programme initiated over 23 years ago is to make electricity available to consumers across the country with efficiency and consistency, which in turn lead to general reliability and affordability.

“Even as electricity consumption per capita was at 140 KWh in 2021, relatively low in comparison to neighbouring countries and almost three times lower than the average for Sub-Saharan Africa, Nigeria is a case study in a deep electricity paradox.

“Nigeria has grown to become the host of probably the world’s largest fleet of diesel- and petrol-powered generation capacity that is utilized for base load supply. Various figures have been mentioned but it is safe to say that this fleet measures no less than 40,000MW of total capacity. At an average operating cost of no less than N250/kWh as opposed to an average economic tariff today of approximately N120/kWh (weighted between petrol and diesel generation), the daily cost of this extreme inefficiency in electricity supply in Nigeria, is measurable in tens of billions of Naira daily.

“This is hard-earned money that would better be deployed to savings, discretionary consumer spending and tax revenue for governments instead of being literally burnt and going up in diesel and petrol emissions that harm our environment and contribute to incessant noise pollution in many of Nigeria’s cities”.

He expressed regret over the second power grid crash on Monday, explaining that it happened for a few hours and “was operational again. It was not due to strategic faults in the grid. Immediately it collapsed, our people swung into action and made sure the grid was restored”.

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