Nigeria’s erratic electricity supply has lingered for decades. Even after spending billions of dollars in an attempt to provide lasting solution to the power challenges, the situation has not improved significantly. The poor electricity supply has also driven up the cost of production, created uncertainty in the future of most businesses and led to high cost of production and the inevitable high cost of finished goods and services.
As part of efforts to address the situation, the federal government in 2013 carried out a privatisation exercise which brought in investors who inherited the assets of the defunct Power Holding Company of Nigeria (PHCN). They were categorized into distribution companies (Discos), generating companies (Gencos) and the Transmission Company of Nigeria (TCN).
The generating companies were privatised. Most of them own their assets. The distribution companies were partially privatised with the government still retaining ownership of 49 per cent of the assets, and the Transmission Companies are owned by the government.
While the Gencos and Discos have often boasted of investing in infrastructure, the TCN has been accused of being the weak link in the power supply chain and a cog in the wheel of progress in the nation’s power supply. The generation companies complain that they cannot work at full capacity because the transmission companies still owned by the federal government, are not measuring up to speed. The TCN is said to be unable to transmit more than a certain volume of power.
It is unfortunate, in our view, that five years after the privatisation programme, the power sector is still mired in debilitating challenges, ranging from poor liquidity, inefficient distribution line and weak transmission line. Information in the public space claims that Nigeria currently has an installed generating capacity of over 12,500MW with an available capacity of about 7,500MW. But it can only generate and transmit about 4000MW currently.The TCN is said to have a transmission capacity of about 6,000MW but can only actually transmit about 4,500MW and a distribution capacity of about 4,600MW.
The Gencos have blamed the woes of the power sector on the weak transmission infrastructure of Transmission Company of Nigeria (TCN). Similarly, the Discos attribute the poor state of the country’s power supply to the TCN.
But the case of TCN was not like this at the initial stage. In July 2012, the federal government contracted a Canadian firm, Manitoba Hydro International, to run the affairs of TCN. The management contract was for three years in the first instance. Manitoba made significant contributions towards improving the overall performance of the TCN, one of them being the reduction of transmission losses from 12 per cent to 6.45 per cent.
Given that the annual commercial value of one per cent of the power wheeled by the TCN amounts to about N5 billion, a saving of 5.5 per cent provides the industry an opportunity to earn an additional income of about N27 billion per annum.
Before Manitoba came on board (2009-July 2012), partial collapse of the national grid was 51 and total collapse was 61 during the review period. After it commenced work (August 2012 to 2016), partial collapse was 13 and total collapse was 42. This fact shows that the company reduced system collapses by over 50 per cent.
Notwithstanding this achievement, the Canadian firm was driven away for ministry officials to run the TCN, but the results are not good.
The TCN is said to have transmission capability of about 6GW. Nigeria’s transmission infrastructure is made up of approximately 6,680km of 330KV lines, 7,780km of 132KV lines, 330/132KV substations with installed transmission capacity of 10,166MVA and 132/32/11KV substations with installed transmission capacity of 11,660MVA. A total of 2,650km of 330KV transmission lines, 7,101km of 132KV transmission lines, 2,850MVA of 330/132KV and 2,900MVA of 132/33KV transmission capacity will be added to the network in the next two years going by projected schedules of TCN. In addition, there are ongoing reinforcements of existing 330KV and 132KV lines and substations to enable the efficient wheeling of more electricity across Nigeria. But TCN is said to be plagued with high non-technical losses and low infrastructure coverage of the country, with less than 40 per cent of the country covered by the existing transmission infrastructure.
TCN has many instances of stranded generation, thus the improvement of its operational performance and efficiency remains fundamental to the attainment of stable and reliable power to all Nigerians. In view of all these, we urge the federal government to address the broad challenges facing TCN such as inadequate coverage of transmission infrastructure and weak infrastructure to evacuate existing generation. In our considered opinion, there is urgent need to address the issue of funding for planned and ongoing transmission projects as well as cost-reflective tariff