Govt should hands off power sector, says TCN MD

Isaac Anumihe, Abuja

Transmission Company of Nigeria (TCN) is one of the organisations that emerged from the ashes of Power Holding Company of Nigeria (PHCN) following its privatisation.

As a company owned 100 per cent by the Federal Government, it has a mandate to operate/upgrade transmission facilities for efficient and effective wheeling of generated electricity. The company is also expected to build transmission grid that can evacuate generated power and reduce transmission losses to at least 5 per cent among others.

As the 14th chief executive officer of TCN, Mr Usman Mohammed Gur, is pushing  for the  withdrawal of government from the market.

According to him the power market should be contract-driven so that people who cannot perform can be liquidated.

Gur, in this chat, made other clarifications regarding skada, spinning reserve and procurement of six new GenCos in the sector.

Excerpts

Govt’s interference in power sector

As I always say, as Nigerians we have to take a decision. We need to make the market work. We need to remove the government out of the market. The market needs to be driven as a sustainable industry.

We need to take that decision. Otherwise, we will continue to pump money into the sector without making it work because it is supposed to be governed by contract such that those who cannot perform can be easily liquidated because of this contract. If we don’t do that, we will continue to waste time and resources and I have said this times without number.

Increase in tariff

There is no relationship between poverty and payment of electricity. We need to do the right thing. Provide electricity to our people 24 hours; give them means of measurement so that they have electricity in their house. They will decide when to put on their light and when to switch off light. This means we should provide meters. We should not supply anybody without meter and then give them the right to put on the light and put off the light when they like.

Again, there is no relationship between poverty and payment of electricity because places that are very poor like Burkina Faso, have bio-electricity. In Burkina Faso, they are buying electricity between 17 cents and 21 cents per kilowatt and yet they are the most efficient utility. In Nigeria, go to places they are deploying mini-grid, you’ll see that people are paying up to N100 per kilowatt hour. And those people that are paying up to N100 per kilowatt hour are in the villages. So, what does that mean. It means that the grid is still the cheapest means of electricity. We need to make it work and the only way we can make it work is that, first of all, Nigerians must pay for the cost of electricity. Second, the industry should be governed by contract.

Report on extraordinary tariff

You know there was a report recently that indicated that TCN submitted case for extraordinary review of tariff and it was turned down by National Electricity Regulatory Commission (NERC). That is not the correct position. We did not submit report for extraordinary tariff review. What we requested was for a provision of auxiliary service. Auxiliary service is one that is supposed to be provided by the market to ensure that we have a stable grid and another we call secondary reserve. A secondary reserve is also called spinning reserve. That secondary reserve is supposed to take care of instability that cannot be taken care of by the primary reserve. The primary reserve is a frequency control. When we came to TCN there was no primary reserve. A primary reserve is the one to take care of demand and supply so that all the generators connected to the grid in line with the grid code; are put on what is called free governor mode. All generators are on free governor mode in Nigeria which is a significant achievement.

The next thing we need to have is secondary reserve. A secondary reserve is to take care of instability that cannot be taken care of by the primary reserve. If for example, a generator that is carrying 300 mw for example goes off or a transmission line that is with huge power, let’s say 400 mw,  trips, maybe due to fire, the secondary reserve is supposed to come out to support the grid so that demand and supply will balance. That is what we are requesting. We are not requesting for it for TCN. It is for the industry. Once there is a system collapse, is it only TCN that loses? No. Everybody loses and it brings a lot of strains in TCN equipment, distribution equipment and generation equipment. The reason we are making the request is because we are the ones that are making the grid.  Otherwise, it is for everybody. The general consensus is that most of them have understood what we are requesting for and it is not a revenue for TCN.  It is actually a service we have to provide so that it will stabilise the grid.

Will consumers pay for it?

Yes, they will pay for it. It will help to improve the service. We have to understand that this is the standard all over the world. When you go to Europe you find that their light does not go off. It is because they have done the right thing. These are some of the right things they need to do. One of the things I want you to support is this issue of skada. Most of the stakeholders in the market see skada as if it is a TCN thing. It is a service that will help us further to stabilise the grid. We are talking of if a generator goes out, the spinning reserve is supposed to stabilise the grid. But is it supposed to go out? No. Any generator that goes out is supposed to be penalised. But how do we penalise them? You only penalise them if you can see them.

The only way you can see them is the register of events which is the skada and that is why we are emphasising the need to have a functional skada. Otherwise, we cannot operate the grid efficiently like other countries.

TCN has procured six GenCos. Which are these GenCos?

The six GenCos include some hydros.  The contracted generators like Azura and Odupani are also part of them. But what I want to tell you is that all those generators have been tested and we have seen that they are capable of providing the service. The only challenge we have as at today is the fact that we don’t have skada.  Some of the current skada can see them. But some of skada cannot see them.

Will spinning reserve address load rejection by DisCos?

National Electricity Regulatory Commission (NERC) is addressing that. NERC has already done an order mandating DisCos that they are going to pay for capacity. This is going to address that problem. Very soon, you will see that this load rejection is going to be a thing of the past. The DisCos can drop and increase load at will and they are not penalised for anything. But now that NERC is putting these structures to ensure that there is capacity charge for those that refuse to take load, very soon you will see that the load rejection is going to be a thing of the past.

Can we convert excess load to reserve?

A spinning reserve is not a capacity charge. It is a provision for service. We are not even paying for the energy. We are only paying for providing the service. And that service will be called on when it is needed. It is not that we are deploying that service.  It will be running all the time. So, we are paying for making that service available. So, it is not to convert excess generation. Of course, if you don’t have excess generation how do you provide spinning reserve?  Every generator that is providing spinning reserve is providing over and above what he can provide to the grid. Currently, we still have a problem of gas. We have a problem of gas because the market is not working.