2016: Transmission frailties undermine power sector aspirations
The Nigeria power sector in the last 12 months have had to contend with adverse macro-economic changes, gas pipeline vandalism, limited gas supply, regulatory uncertainty, lack of respect for contract and government policy inconsistency which in no small ways posed hiccups to its operations.
With all the effort put into reforming the power sector,the challenges still linger on. Gas accounts for 81 percent of electricity generation but unfortunately Gencos suffered frequent gas shortages even though Nigeria has one of the largest gas reserves in Africa.
Industry watchers observed that despite private investment into the power sector, issues with collection, transmission, gas supply among others have limited the impact that private sector would have had in the sector.
In the wake of these realities, they expressed concern over the state of Transmission which is also a major challenge as this is still handled by the Transmission Company of Nigeria which remains a government owned entity lacking modern facilities, amongst other challenges.
While some observers say there has been some noticeable reduction in system collapse in the transmission network post-privatisation, other analysts are concerned that the numbers of collapses are still too many to call for worries; in 2016 system collapses by mid-year had exceeded the ones experienced in 2015.
They are of the opinions that investors in the power sector are at a crossroad concerning their initial decision to invest in the sector.
What really is wrong with transmission?
Transmission in the views of industry analysts stand alongside generation and distribution in the tripod of electricity value chain.However, industry analysts observed that transmission in the last 12 months experienced limitations in the value chain that precludes their ability to receive the consistent power supply that they have a right to expect.
Report indicates that the maximum wheeling capacity reached by Transmission Company of Nigeria has been 5,074.7 Megawatts, MW (attained February 2nd, 2016) versus its claims of increased capacity from 5,500 MW to 6,000 MW, wholly untested and unproven.
The plan targets transmission capacity of 8,200Mw by 2018 and 10,000Mw by 2019. The transmission arm of the power supply value chain has been tagged the weakest link of the chain by operators. If the targets of the plan work were achieved, it would boost stable electricity supply.
Association of Nigeria Electricity Distribution (ANED) only recently attributed the poor state of the country’s power supply to the Transmission Company of Nigeria, TCN describing it as the weakest link in the power supply chain.
The association explained that “any plans by TCN to complete 22 critical projects captured in the 2016 budget has to be a function of the availability and release of the requisite funding required for same.
According to them “It is not clear that TCN has received, nor will it receive, any funding that comes close to enabling it complete the indicated projects –a continued legacy of limited and poor funding of a vital aspect of power infrastructure.”
They argue that considering the importance of power as the fundamental ingredient for the growth of any economy, getting all the parts to work in sync is crucial.
“Factually, a major contribution to the liquidity challenges that the DISCOs are currently experiencing is TCN’s infrastructure and technical limitations in wheeling power to the proper areas of a DISCO’s geographical footprint. “Also, DISCOs are currently experiencing a monthly loss in excess of N1 billion due to limited transmission capacities in various areas of the country. Analyst observed.
Sunday OlurotimiOduntan , Executive Director, Research & Advocacy , Association of Nigeria Electricity Distribution was quoted to have said at a recent programme that a fundamental premise of the privatisation of the Power Holding Company of Nigeria, PHCN, successor companies was that TCN would be operated efficiently, consistent with private sector attributes of productivity and managerial efficiency.
Oduntan observed that such attributes were expected to result increased wheeling capacity that would complement increased power generation and, ultimately, increased supply to consumers. Alas, progress in that direction remains minimal.
Data from the Transmission Company of Nigeria (TCN) show that national peak demand forecast is 17,720Mw while operators of the electricity distribution companies said it is 20,000Mw, reflecting a deficit of more 14,000Mw.
According to the data, the average daily power output in 2016 was 3667.95Mw, which was achieved in January. This level dropped abysmally at the peak of the renewed attacks by the Niger Delta militants. Average daily generation in May and June were 1791.49Mw and 1307.81Mw.
The TCN’s data showed that the nation has installed transmission capacity of 11,165.40Mw, but available capacity is 7,139.60Mw, while the network operational capability is 5,500Mw.
Steps to tackle transmission shortfalls
Industry close watchers observe that as long as the same fundamental issues and challenges exist in the power sector, there are no miracles to seeking the turnaround that we all desire.
Sunday OlurotimiOduntan, pointed out that unless TCN is properly funded, its project management capacity upgraded, trained and competent personnel enlisted, it is fair to question the veracity of the constant assurances of possible foreign/donor investment in TCN.
On his part, Dolapo Oni, an energy expert cautioned that with Transmission still in the hand of government much would not change. “We need to expand transmission capacity. Transmission should always lead generation. You can’t be generating 7,000 megawatts and be transmitting only 4,000. Transmission is in the hands of government that needs to change”, he said.
Oni suggested that if government wants to privatise TCN, they should go ahead. Most countries have moved away from this national grid structure. Most countries have their grids broken down into several segments so that you can have a northeastern grid and various grid connections. That is what we need to start exploring the idea of breaking down the grid and making sure that it works.
Analysts are of the views that the power value chain would applaud TCN’s ascendancy from being the weakest link in the supply of power to consumers, more funds is needed to be pumped into the system for adequate power delivery.
They opine that the government should ensure not just expansion but flexible transmission system. This can be achieved through breaking up the grid into regional networks. Interconnection between the regional networks will be done to guarantee the required flexibility. Also there is need for the dualisation of congested transmission networks to create relief.
“The implementation of (Super Grid) concept (a 745kv) networks being considered by the government is imperative as it would improve the efficiency of the network,” they added.
KELECHI EWUZIE