NIGERIAN ELECTRICITY GRID COLLAPSE: WHO IS TO BLAME?
On Wednesday, 17th August 2022, the national grid crashed to zero megawatts, throwing businesses and homes across the country into darkness as workers at the Transmission Company of Nigeria (TCN) embarked on strike. However, this was not the first blackout Nigerians experienced across the country due to the system collapse of the grid.
In this article, I shall explain who or what is to blame for the continuous power distribution failure resulting from a grid collapse.
There is a cost to creating energy. Unlike other utilities like water, electricity cannot be created, stored, and provided at a later date. The instant it is produced, it ought to be used regardless of how far apart the producer and end users are.
Below is a simplified description of the components of the Nigerian electricity value chain.
The process of moving electrical current from the point of generation to distribution is known as SYSTEM OPERATIONS (SO). For the sake of the Nigerian context, I shall break down the players in this flow and how the system is expected to run if it is efficient.
Generation
Generation is the point where electricity is produced. There are several types of power plants but what happens here is the conversion of different fuel or energy types into electrical energy. Most power plants are situated in populated areas and must be transported efficiently via high voltage transmission lines.
Transmission
At the plant, transformers boost the voltage, enabling electrical energy to travel farther along transmission lines. Note that all electricity supply systems function smoothly due to the balance between voltage and frequency. Voltage, measured in "volts", is the pressure that pushes electrons along a distance. These electrons travel as "alternating current" along cables. They do so in waves that oscillate at a certain speed. Transmission lines enable these electrons along the lines. The farther the distance electrons must travel, the higher the voltage required to push them along the grid. Once the energy reaches the needed areas, transformers step down the voltage for practical usage.
The company responsible for this in Nigeria is known as the Transmission Company of Nigeria (TCN). Transmission Company of Nigeria (TCN) manages the electricity transmission network in the country. It is one of the 18 companies that was unbundled from the defunct Power Holding Company of Nigeria (PHCN) in April 2004. It is a product of a merger of the transmission and system operations parts of PHCN.
TCN's licensed activities include electricity transmission, system operation, and trading. It is responsible for evacuating electric power generated by the electricity generating companies (GenCos) and wheeling it to distribution companies (DisCos). In addition, it provides the vital transmission infrastructure between the GenCos and the DisCos' Feeder Sub-stations.
Distribution
The Distribution Companies have Feeder Substations where feeder lines deliver electrical energy to the final consumers. These distribution companies are the ones we directly interact with as energy customers. Smaller transformers further step down the feeders' voltage for industrial, commercial, or residential usage.
Most of the power grid uses Alternating Current (AC). Alternating Current can be stepped up and down to enable efficient movement of electrical current from where it is produced to where it is consumed.
The Problem in the Nigerian Energy Market
As described above, electricity is useless unless it can be delivered via electricity markets, whether public or private sector owned and managed. Nigeria is unique because it has a single national electricity market and System Operations, which exists as part of TCN. TCN has two licenses, one for transmission (construction and maintenance of the grid) and the other for system operations. The large mass of data and links you can see daily at nsong.org.
The problem is that only the TCN alone can accurately tell what was generated and picked up by the distribution companies.
Due to this oversight, only the system operations can reliably and transparently tell all players in the market how much they should expect to pay or receive on a given settlement day and for what quantity.
Beyond engineering, we can agree that every electron put into/taken out of the market must be matched by a proportional amount of money paid. A balance ensures the electrical energy is produced in the required quantity and quality and, in addition, gives a reasonable profit that enables the generator, the transmission entity, the distribution entity, the fuel supplier, and, of course, the system operator to continue in that market.
The above is not the case in Nigeria because there is an imbalance between the technical and commercial parts of the business. As a result, poor revenue collection by the Distribution Companies creates revenue gaps. It ultimately makes inadequate investment in the grid network maintenance and growth solely under the control of the government.
These outcomes are rooted in poor governance choices/decisions by policymakers, regulators, and operators that breach the laws of economics and, in turn, take us back to engineering imbalances - poor generation, poor transmission, distribution outages, and ultimately system collapses (aka grid crash).
What is the way forward?
Infrastructure financing and investment to expand fuel supply, generation, transmission, and distribution and exceed known demand. However, as long as the market continues to aggregate the billions of CAPEX US Dollars required for investment into our single national electricity market, year-on-year for decades to come as it is being used, the resolution is unlikely to happen.
Kindly contribute to the discourse.
In what specific ways can these issues be resolved, in your opinion?
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Written by Olumuyiwa Fatoba.