From Isaac Anumihe, Abuja
Electricity industry players have hailed the unbundling of Transmission Company of Nigeria (TCN), saying that TCN was managed by wrong and unqualified people.
According to them, with the unbundling of the company, government should fill the new companies with the right people.
TCN was separated into two entities, Independent System Operator (ISO) and the Transmission Service Provider (TSP) has the potential to bring about positive changes to the Nigerian power sector.
The stakeholders, said that the proposed restructuring of TCN into ISO and TSP is aimed at addressing some challenges and improve the overall performance of the transmission segment.
Vice President, Operations, Ashipa Electric, Folusho Alabi submitted that the unbundling of transmission companies is a global phenomenon. Nigeria is not alone.
“More than 90 countries, especially those with state-managed electric utilities like Australia, Germany, Sweden among others, have unbundled their transmission system for effective delivery. Thus, the proposed restructuring of the Transmission Company of Nigeria (TCN) into two entities – the Independent System Operator (ISO) and the Transmission Service Provider (TSP) is a common industry practice. This separation is often referred to as the “unbundling” of transmission services.
“TCN is the only existing government-owned electric utility company in the previous government wholely owned electric ecosystem before the privatization of the Power Holding Company of Nigeria (PHCN), whose keyrole is to deliver electricity to end-users in Nigeria and neighbouring countries. The company’s primary responsibilities include evacuating electric power from generating companies and wheeling it to distribution companies, providing vital transmission infrastructure and ensuring a reliable transmission grid”he said.
Alabi recognized the fact that the company has faced a lot of challenges because of its poor performance. Though, he noted, in the midst of the challenges, the company has made some progress which include, increasing grid capacity and stability; implementing grid expansion and upgrading projects; improving transmission efficiency and reducing losses, and enhancing grid management and monitoring systems.
“The Transmission Company of Nigeria (TCN) has faced various challenges and criticisms over the years, and its performance has been a subject of debate, especially with the multiple occurrences of grid collapse and nationwide power failure. While TCN has made efforts to improve the transmission infrastructure and increase grid capacity, the Nigerian power sector still faces significant challenges, including inadequate and unreliable power supply, frequent grid collapses, transmission congestion and bottlenecks, limited access to electricity, especially in rural areas, and high energy losses and theft.
“Despite these challenges, TCN has made some progress, such as increasing grid capacity and stability, implementing grid expansion and upgrading projects, improving transmission efficiency and reducing losses, and enhancing grid management and monitoring systems. However, more needs to be done to address the sector’s underlying issues and meet the growing demand for electricity. The proposed restructuring of TCN into ISO and TSP aims to address some of these challenges and improve the overall performance of the transmission segment” the Vice President who’s also a mini-grid developer, said.
While ISO would be responsible for managing the grid and ensuring reliable and efficient transmission of electricity TSP would focus on the maintenance and upgrade of transmission infrastructure.
“The ISO would be responsible for managing the grid and ensuring reliable and efficient transmission of electricity, while the TSP would focus on the maintenance and upgrade of transmission infrastructure. This separation is expected to ensure improved grid management and efficiency, enhanced competition and open access to the transmission network, increased investment in transmission infrastructure and better alignment with international best practices.
However, Alabi, opined, the success of this restructuring depends on various factors, including clear definition of roles and responsibilities, effective regulatory oversight, strong institutional capacity and governance, and adequate funding and investment in both entities.
“Practically, the decision to restructure TCN into ISO and TSP has the potential to bring about positive changes to the Nigerian power sector, but its implementation will require careful planning, co-ordination, and execution.
“It is important to note that the Nigerian power sector is complex, and TCN’s performance is influenced by various factors, including generation and distribution challenges, regulatory issues, and funding constraints. Therefore, a comprehensive approach is needed to address the sector’s challenges and ensure reliable, efficient, and sustainable power supply” he said.
President, Chartered Institute of Power Engineers (CIPE), Engineer Israel Abraham said that the unbundling of TCN is long overdue.
According to the act, the ISO as a regulator, has a lot of work to do.
The unbundling will make the government to invest a lot of money into the system.
The unbundling of TCN, he noted, is expected because TCN is politically managed, a situation that makes its performance poor.
“The company was managed by wrong people. The right persons should be brought on board” he said
The same way, former Chief Technical Officer of FGN Power Company, Engineer Idowu Oyebanjo, said that the unbundling of TCN was done by the Nigerian Electricity Regulatory Commission (NERC) based on the Electric Power Sector Reform Act (EPSRA) 2005.
“TCN, until now, has two separate licences in one, due to the lack of clarity on the implementation of the policy. With the electricity act 2023 (as amended), the details of implementation have been further clarified, making it possible for the commission to give impetus to the order for its implementation. So, this is a matter of law.
Oyebanjo asserted that the evolving electricity market will include national and state electricity markets, unbundled TCN (TSP and ISO), successor DisCos, subsidiary DisCos, among others.
“This will make the fragile electricity market very vulnerable.
The greatest risk is if the system does not allow capable hands to drive the complex system that is evolving. We are battling with a paltry 4000MW for a population of over 200 million people, a consequence of unbundling the old NEPA, and now, to further unbundle TCN requires careful implementation by expert personnel” he said
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