NESI

Transmission

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 and is a product of a merger of the transmission and system operations parts of PHCN. It was incorporated in November 2005 and issued a transmission license on July 1, 2006. TCN is presently fully owned and operated by the government and as part of the reform programme of the government, it is to be reorganised and restructured to improve its reliability and expand its capacity.

TCN’s licensed activities include: electricity transmission, system operation and electricity trading. It is responsible for evacuating electric power generated by the electricity generating companies (GenCos) and wheeling it to distribution companies (DisCos). It provides the vital transmission infrastructure between the GenCos and the DisCos’ Feeder Sub-stations.

Nigeria’s transmission network consists of high voltage substations with a total (theoretical) transmission wheeling capacity of 7,500MW and over 20,000km of transmission lines. Currently, transmission wheeling capacity (5,300MW) is higher than average operational generation capacity of 3,879MW but it is far below the total installed generation capacity of 12,522MW. The entire infrastructure is essentially radial, without redundancies thus creating inherent reliability issues. At an average of approx. 7.4%, the transmission losses across the network are high compared to emerging countries’ benchmarks of 2-6%. The number of system collapses has fallen over the past years from a peak of 42 in 2010 to a few last year. All these reflects the critical infrastructure and operational challenges in the transmission subsector of the industry.

 

TCN consists of three operational departments:

1. Transmission Service Provider (TSP)

The TSP oversees the development and maintenance of the transmission infrastructure. It is responsible for the national inter-connected transmission system of substations and power lines and providing open access transmission services. Its role is to maintain the physical infrastructure that make up the transmission grid and expand it to new areas.

2. System Operations (SO)

The SO manages the flow of electricity throughout the power system from generation to distribution companies. It operates the Grid Code for the Nigerian Electricity Supply Industry (NESI). The SO has the responsibility for ensuring that the transmission grid lines are reliable and maintaining the technical stability of the grid through its operations of planning, dispatch, and control of the electricity on the grid. Specifically, responsibilities of the SO are:

  1. Controlling grid frequency and voltage;
  2. Allocating power loads in times of insufficient generation;
  3. Designing, installing, and maintaining Supervisory Control and Data Acquisition (SCADA) and Communication facilities for effective grid operations;
  4. Economic dispatch of generating units
  5. Procuring & managing ancillary services;
  6. Enforcing the Grid Code and the operational procedures
  7. Coordinating all planned outages for the maintenance of system equipment;
  8. Performing post fault analysis of all major grid disturbances.

Under the Electric Power Sector Reform Act (EPSRA) 2005, it is envisioned that in the long term, SO will devolve into an independent body separate from TCN when the electricity market reaches the fully developed stage.

3. Market Operations (MO)

The MO administers the market rules of the NESI. It is responsible for the administration of the Electricity Market and promoting efficiency in the market. Specifically, the roles of MO include:

  1. Implementing and administering the Nigerian Electricity Market Rules,
  2. Drafting and implementing the Market Procedures;
  3. Administration of the Commercial Metering System by ensuring that each trading point has adequate metering systems in place;
  4. Administration of the Market Settlement System;
  5. Administration of the Payment System and commercial arrangement of the energy market, including Ancillary Services;
  6. Supervising Electricity Market Participants’ compliance with and enforcing the Market Rules and the Grid Code.
  7. Periodic reporting on the implementation of the Market Rules;
  8. Capacity building of market of Participants on the Market Rules and Procedures and Trading Arrangements;

At the long-term stage of the electricity market, ensuring and promoting competition among market participants will be a key function of the MO.

 

Investment Opportunities in the Transmission network

The transmission network system requires a significant amount of investment for expansion of wheeling capacity, improving reliability, stability and reducing transmission losses.

The Private Sector investment will be required in the following areas to achieve the goals of the electric power reform programme of the government.

  • Transmission Network expansion;
  • Dualization of critical lines to create redundancy;
  • Relief for congested segments of the grid;
  • Replacement of old & broken down lines & equipment
  • Modern asset management & operational processes
  • Efficient Project management practices
  • Vegetation management;
  • Human capacity development
  • Local manufacture of components.
  • Implementation of the Super Grid concept (approx. cost of $5bn)

A clear and concise contractual, regulatory, and financial framework is a critical requirement for attracting private sector capital to the NESI. The Commission guided by the EPSR Act 2005, provides a tariff methodology that encourages investment in transmission sub-sector of the industry.

Click here to learn more about transmission Tariff

Corporate Headquarters


Adamawa Plaza,
 Plot 1099,
First Avenue, 
Off Shehu Shagari Way
Central Business District

Abuja F.C.T, Nigeria
Tel: +234 09 4621400, 09 4621410
info@nerc.gov.ng

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