The power sector needs an efficiently managed national grid

Instead of building trusts and working to light up the bewildering darkness in the land, both the electricity distribution companies (DISCOs) and the Transmission Company of Nigeria (TCN) are busy trading blame on their inefficiencies. Last week, the Association of Nigerian Electricity Distributors (ANED) blamed the frequent collapse of the national grid in recent times on the TCN’s lack of standard power protection equipment at its transmission substations.

ANED said it had reported the trend of burnt or failed transmission stations’ incidents in Lagos, Calabar, Abuja, Enugu and Onitsha last May, all due to inadequate transmission protection mechanisms and procedures, adding that the TCN was notorious for dumping “load” on the Discos whenever it had challenges managing energy on its grid. But predictably, the TCN has hit back as it accused the Discos for the collapse because they “rejected electricity loads allocated to them.”

This year alone, nine system collapses had been recorded which left many areas across the country in darkness for hours and sometime, days. In January, the system collapsed five times while one was reported in April, and two in May. The latest, which occurred last June 30, affected a section of the Benin Substation, its second collapse within the year. “A properly protected transmission system will always isolate faults,” ANED said. “But, unfortunately, the resultant effect is that we have experienced the ninth total black out in Nigeria this year, a rate of transmission failure that is in excess of one blackout per month – far beyond any international standard.”

After six years of privatising electricity, and after billions of dollars in investment, Nigerians are still daily inundated with silly excuses why they are in perpetual darkness. Hardly a week passes without either the electricity generation companies (Gencos), the distribution companies (Discos) and the lone transmission company, which is still within government’s control, trading blame instead of focusing on realising actual delivery of its acclaimed 8,100 megawatts wheeling capacity.

It is irritating enough that the little megawatts of electricity generated in the country cannot be evacuated or distributed because of decayed infrastructure. It is even worse that nothing tangible is being done to remedy the situation – through the acquisition of good transmission networks for better power delivery. At the receiving end most times are the Discos which represent the direct link with the consumers. They have been accused of investing too little to improve their networks and services since they took over.

They have also been called out, as in the present case, for failing to take more power from the grid to their customers, and therefore increasing the volume of power stranded on transmission lines. Equipment that can monitor the grid and trace system collapse faults within reasonable time is not available. Besides, the TCN has said that the Discos needed $4.3billion investment to upgrade their networks. A recent report by the French Development Agency said that the Discos would need about $181 million annually to improve their networks capacity. Even if the Discos are able to raise this amount, which is unlikely, they are still constrained: the industry regulator has a ceiling of $150m investment annually, about $13.6m per Disco yearly.

Instructively, Nigeria has one of the harshest environments for doing business and also makes the country less competitive. China, for instance, spends less than 10 per cent of its production cost on electricity. In Nigeria, it is in excess of 40 per cent, as individuals and businesses have had to resort to self-help through an assortment of generators.

As we have repeatedly noted on this page, we need a robust and efficiently managed grid, appropriate incentives to attract necessary investment, and smart regulation to revive the ailing power sector.