What You Need To Know About The Transmission Company Of Nigeria (TCN) -By Oyetola Muyiwa Atoyebi & Ene Iwodi

On the 17^th of August 2022, many Nigerian cities reported a total electricity blackout. In 2022, this development did not come as a surprise to many Nigerians because there have been repeated nationwide power outages, as the national electricity grid has collapsed at least six (6) times in 2022. What may however come as a surprise to Nigerians is that the blackout of 17^th August was not caused by a national grid collapse, but as a result of a strike action by the National Union of Electricity Employees (NUEE).

INTRODUCTION

On the 17^th of August 2022, many Nigerian cities reported a total electricity blackout. In 2022, this development must not have come as a surprise to many Nigerians as there have been repeated nationwide power outages as the national electricity grid has collapsed at least six(6) times in 2022.[1] What may however come as a surprise to Nigerians is that the blackout of 17^th August was not caused by a national grid collapse, but as a result of a strike action by the National Union of Electricity Employees (NUEE). Its members who were working in the Transmission Company of Nigeria (TCN), were directed to shut down its operations chiefly in response to a directive issued by the TCN that certain officers in line to be promoted must first appear for a promotion interview.[2]

The TCN has also been at the heart of the previous electricity outages caused by the collapse of the national grid as they are the organization in charge of maintenance of the national grid.

This article aims to address significant concerns on the implications of the TCN while identifying its role in the supply of electricity in Nigeria.

The Transmission Company of Nigeria (TCN) is the sole governmental organization charged primarily with the transmission of electricity in Nigeria, which is a key segment of the Nigerian Electricity supply chain which runs from the generation of electricity to transmission, and then distribution to the end users/consumers.[3]Transmission of electricity involves the movement in bulk of electricity from large-scale generation sites or power plants, usually over long distances to the point of distribution where it is then transformed and distributed to the consumers and end users.[4]

The Transmission of Electricity is important, as electricity generated from large-scale generation sites is usually generated at electrical levels ranging from 11 to 33kv (kilovolts), which has to be stepped up via a transformer to levels ranging between 100kv to 700kv, in order to enable it to travel long distances efficiently without transmission power loss, and then stepped down via a transformer when it reaches the distribution point for further transmission to end users.[5]

It is therefore the link between generation of electricity and distribution to end users. This electricity transmission is usually done through a dedicated transmission network. In Nigeria, electricity transmission is done by the Transmission Company of Nigeria (TCN) through the national transmission grid infrastructure which consists of high voltage transmission substations which step up the electricity produced from the large-scale generation sites at about 16kv to 330kv and then steps it down at the distribution point to 132kv.[6]

HISTORY OF THE TRANSMISSION COMPANY OF THE NIGERIA

The Nigerian Electricity and Power Sector was in dire straits post-independence particularly in 1999, during the newly elected civilian administration, as an estimated 90million people did not have access to electricity and industry losses were believed to be more than 50%.[7]Public confidence in the Nigerian power sector had all but diminished and it became abundantly clear that the cross of the now defunct National Electric Power Authority (NEPA) who was saddled with the production, transmission and distribution of electricity throughout Nigeria had become too heavy for it to bear efficiently and thus, in order to alleviate this burden and make for a better and more efficient power sector, the now defunct Power Holding Company of Nigeria (PHCN) was established in 2005, in line with the Electric Power Sector Reform Act (EPSRA) with a view to the diversification and privatisation of the Power Sector in Various Generation and Distribution Companies. Also, a transmission Company which was to be fully owned by the Federal Government, and gave birth to the Transmission Company of Nigeria (TCN) which was incorporated in November 2005,with an Operations License and was issued a Transmission license in July 2006.[8] It was subsequently issued licenses as a Transmission Service Provider and a System Operator in June 2013.[9]

POWERS, SCOPE AND FUNCTIONS OF THE TCN

Aside from its primary function of transmitting electricity in Nigeria, the TCN has two other major functions, which are; Provision of System Operation Services and Market Operation Services with other subfunctions under these major functions.[10]The TCN also transmits electricity to other neighbouring countries such as the Niger Republic, Burkina Faso, Togo and the Benin Republic that Nigeria supplies electricity to.[11]It also consists of three departments to carry out these functions which are; Transmission Service Provider, System Operator and Market Operator. These departments and their modus operandi in the carrying out of their functions will be further explained below

• Transmission Service Provider: This department is primarily charged with the maintenance and development of the national transmission grid infrastructure and also includes the expansion of the grid network to new areas.[12] In carrying out the maintenance and development of the national transmission network, the department evaluates new grid connections and only admits users who satisfy the requirements laid out in the Market Rules which are rules laid out for the operations in the Electricity Market/Industry by its regulatory body, the Nigeria Electricity Regulation Commission (NERC). The department also ensures that there is proper metering at all connection points.[13]

• System Operator: This department operates the transmission system and manages the transmission of electricity from generation to distribution companies. The System Operator manages the transmission system in compliance with the Grid Code which is also issued by the NERC and entails the guidelines for the operation of the Grid System.[14]

• Market Operator: This department carries out the function of the TCN as a market operator which oversees and administers the Market Rules of the Nigerian Electricity Market which is a system for effecting the purchase and sale of electricity using supply and demand to set the price.[15] It involves managing the settlement and payment systems involved in the Electricity Supply Industry, admitting and registering Industry participants and also reviewing the efficiency and adequacy of Market Rules amongothers.[16]

PROBLEMS/CHALLENGES ASSOCIATED WITH THE TRANSMISSION OF ELECTRICITY IN NIGERIA AND THE TCN

The transmission sector of the Nigerian electricity industry is grossly underperforming. Although the current national grid infrastructure network is reported to have a wheeling capacity of 7,500MW (Megawatts), it has not been able to transmit higher than 5375MW[17] and as ofAugust 16^th before the national blackout as a result of the strike, the transmission peak was 4,830.69MW.[18]This is not an encouraging figure as even the 7,500 transmission wheeling capacity is less than Nigeria’s available generation capacity reported to be at 8,000MW.[19]  The repeated failure and collapse of the national grid infrastructure is also a cause of alarm as it has collapsed over 140 times since 2013.[20] The transmission network also reports a transmission loss of approximately 7.4%, which is a high figure compared to that of other countries that range between 2-6%[21]. As the TCN is the sole organization in charge of electricity transmission in Nigeria, it must also bear the responsibility for its problems. The TCN has been accused of underinvestment in building new infrastructure and expanding the transmission network, and also with lack of timely and efficient maintenance of current infrastructure in 2017, the TCN pledged to invest about $800million in order to improve its transfer capacity and reliability to more than 10,000 MW[22].

However, it has not yet met this goal and continues to suffer system failure and grid collapse in 2022. A big challenge facing the TCN is that of revenue generation, as the TCN does not generate enough revenue to be self-sustainable and depends on government appropriation and financing from external sources. In addition, the TCN is still owed a significant amount of money for its transmission services provided.[23]

CONCLUSION

It has been suggested and recommended that the functions which the TCN currently carries should be further unbundled and there should be a separate organization carrying out the function of an Independent Service Operator (ISO) and also that other private individuals and corporations who are qualified enough to do so, should be licensed to also carry out transmission activities and own and operate transmission infrastructure.[24] There shouldn’t be a monopoly by the government on transmission activities so as to enable a more efficient and smooth operation. It has also been suggested that the TCN should also be privatised.[25]

AUTHOR: Oyetola Muyiwa Atoyebi, SAN, FCIArb. (UK).

Mr. Oyetola Muyiwa Atoyebi, SAN is the Managing Partner of O. M. Atoyebi, S.A.N & Partners (OMAPLEX Law Firm) where he also doubles as the Team Lead of the Firm’s Emerging Areas of Law Practice.

Mr. Atoyebi has expertise in and a vast knowledge of Energy Law and this has seen him advise and represent his vast clientele in a myriad of high level transactions.  He holds the honour of being the youngest lawyer in Nigeria’s history to be conferred with the rank of a Senior Advocate of Nigeria.

He can be reached at atoyebi@omaplex.com.ng

CONTRIBUTOR: Ene Iwodi.

Ene is a Team Lead in the Corporate and Commercial Team at OMAPLEX Law Firm where she heads the Energy Practice Group.

She can be reached at ene.iwodi@omaplex.com.ng.

[1]GbengeOloniniran ‘National Grid Collapses Again’ 20^th July 2022 https://punchng.com/national-grid-collapses-again/#:~:text=The%20collapse%20of%20the%20national,the%20fifth%20time%20in%202022.&text=The%20collapse%20is%20expected%20to,some%20parts%20of%20the%20country.

[2]OladeindeOlawoyin ‘The Day Electricity Workers Held Nigeria to Ransom’ https://www.premiumtimesng.com/news/headlines/550120-the-day-electricity-workers-held-nigeria-to-ransom.html

[3]KofoworolaOlokun- Olawoyin ‘The Nigerian Electricity Supply Industry’ De’Lex Centre Publications

[4] Erika Granath, ‘The Basics of an Electrical power transmission system’ https://www.power-and-beyond.com/basics-of-an-electrical-power-transmission-system-a-919739/

[5] Ibid

[6]KofoworolaOlokun- Olawoyin, ‘The Nigerian Electricity Supply Industry’ <Unverifiable external source>

[7]BolanleOnagoruwa ‘Nigerian Power Sector Reforms and Privatisation’ <https://www.esi-africa.com/wp-content/uploads/Bolanle_Onagoruwa_0.pdf>  Presentation to the West African Power Industry Convention November 2011

[8] ‘About Transmission Company of Nigeria’ https://www.tcn.org.ng/page_history.php

[9]‘About Us’ https://www.tcn.org.ng/page_about_us.php#:~:text=TCN%20was%20incorporated%20in%20November,electricty%20transmission%20and%20system%20operations.

[10] ‘About Transmission Company of Nigeria’ https://www.tcn.org.ng/page_history.php

[11] Ibid

[12] ‘Transmission’ https://nerc.gov.ng/index.php/home/nesi/404-transmission#:~:text=TCN’s%20licensed%20activities%20include%3A%20electricity,to%20distribution%20companies%20(DisCos).

[13] Section 1.5.1 NERC Grid Code https://nerc.gov.ng/index.php/library/documents/func-startdown/305/

[14] T.S.G Wuli, Sunday Obi ‘The Nigeria Grid Code’ https://www.esi-africa.com/wp-content/uploads/TSG_Wudil.pdf

[15] ‘Nigerian Electricity Market’ https://nerc.gov.ng/index.php/home/operators/ltmr/405-nigerian-electricity-market#:~:text=The%20Market%20Rules%20is%20a,together%20to%20secure%20efficient%20co%2D

[16] ‘About Transmission Company of Nigeria’ https://www.tcn.org.ng/page_history.php

[17] ‘TCN Announces New National Peak of 5375MW’ 20 December 2019 https://www.nsong.org/MediaPublicity/NewsDetails?NewsID=79

[18]OladeindeOlawoyin ‘The Day Electricity Workers Held Nigeria to Ransom’ https://www.premiumtimesng.com/news/headlines/550120-the-day-electricity-workers-held-nigeria-to-ransom.html

[19]ObasEsiedesa ‘How poor generation, metering gap, financial crisis shackled power sector in 2021’ <https://www.vanguardngr.com/2022/01/how-poor-generation-metering-gap-financial-crisis-shackled-power-sector-in-2021/>

[20] ‘Kingsley Jeremiah and John Akubo ‘Nationwide darkness as Nigeria’s grid collapses seventh time in 2022’ <https://guardian.ng/news/nationwide-darkness-as-nigerias-grid-collapses-seventh-time-in-2022/>

[21] Transmission’ https://nerc.gov.ng/index.php/home/nesi/404-transmission#:~:text=TCN’s%20licensed%20activities%20include%3A%20electricity,to%20distribution%20companies%20(DisCos).

[22]KofoworolaOlokun- Olawoyin ‘The Nigerian Electricity Supply Industry’ De’Lex Centre Publications

[23]OdionOmonfoman ‘Nigerian Electricity Transmission Grid- Issues and Way forward’ https://opinion.premiumtimesng.com/2016/01/25/nigerian-electricity-transmission-grid-issues-and-way-forward-by-odion-omonfoman/

[24] THIS DAY NG ‘Nigeria’s Unending Transmission Failures- Any Solutions to this Problem?’ <https://legal.businessday.ng/2020/12/04/nigerias-unending-transmission-failures-any-solutions-to-this-problem/>

[25] No 18