NERC Blasts Market Operator For Sitting On $30bn Funding

The Nigerian Electricity Regulatory Commission (NERC) has blasted the market operator for delaying the utilisation of $30 billion in funding in its coffers intended for the development of a spinning reserve in the Nigeria electricity sector.

This is as the industry has recorded about 162 systems collapse since privatisation 11 years ago.

NERC’s concerns centre on the operator’s failure to utilise these funds effectively, which have hampers improvements in electricity supply and infrastructure development.

This followed three significant outages within a week, raising concerns about the stability of Nigeria’s power infrastructure.

NERC convened stakeholders across the Nigerian Electricity Supply Industry (NESI) value chain to review the options of the system and proffer solutions to the incessant grid collapses.

Chairman/CEO of NERC Sanusi Garba, who described the frequent collapses of the national grid as a national embarrassment, said the Transmission Company of Nigeria (TCN) was not optimising its own utilisation of scarce resources to the benefit of the sector.

Speaking during the public consultation on grid collapses organised by the commission in Abuja on Thursday, Engr Garba therefore charged the market operator on speedy utilisation of the funds to boost the stability grid.

“The Market Operator did mention that he’s sitting on $30 billion to procure a spinning reserve, and if this is identified as a critical thing we need to do to make sure that there’s more stability of the grid, then obviously you are not a banker.

“You are supposed to use that money for the purpose it was meant for. If there’s any indication of inadequacy of resources to do it, you revert back to the Commission to see what can be done.

Garba said NERC will look at the Performance Improvement Plan (PIP) again to identify some of the urgent things that need to be done in the short-term to mitigate the risk and ensure the story of system collapses, which is a national embarrassment becomes a story of the past.

Speaking on the Supervisory Control and Data Acquisition (SCADA) project, the NERC boss said there is ongoing work within the commission to make sure that any missing scopes so far identified are accomplished.

“We have made significant effort to identify possible funding sources for the scope that may seem to be missing today. We are also very much passionate about identifying short-term and medium-term action that we need to take following the hearing,” he said.

The well-attended public hearing involved stakeholders from the electricity sector, civil society organisations, and the general public, focusing on strategies to revamp the grid system.

The NERC boss emphasised the urgency of addressing these disturbances to restore confidence in the electricity supply industry and mitigate widespread blackouts across the nation, noting that all submissions by stakeholders have been noted and adequate actions would be set in motion to address the issues raised and apply the recommendations advanced.

Various speakers at the stakeholders engagement blamed TCN‘s poor operational prudence and poor/manual maintenance policy for its aged transmission network, among others, for the persistent system collapses.

NERC Commissioner, Engineering and Performance Monitoring, Dr Chidi Ike, stressed that the TCN needs to change from a manual maintenance policy to maintenance management software that can detect faults on a real time basis.

“You have a maintenance policy on paper, but it’s not being implemented. Let me make it clear to you.That policy is a manual policy. Maintenance once a year. But what about the condition? That is what the maintenance management software does for you. Maintenance management software will move you away from once a year to five times a year. Because it is monitoring what is happening in that plant, how many trips it has suffered, the condition of the oil, the temperature, insulation, it monitors it remotely. And it moves you away from this manual approach, because once a year, it’s not enough.”

The managing director/chief executive officer of the Association of Power Generation Companies (APGC) Joy Ogaji, lamented that the nation recorded 162 cases of grid collapse from 2013 till date.

She emphasised the huge financial loss recorded by businesses as well as individuals as a result of the recurring grid collapses and widespread outages usually occasioned by the grid disturbances.

“From the association data taken from 2013 till date the grid has collapsed 162 times,” Ogaji said.

She said the level of frequency fluctuation and frequency crippling on the grid cannot be cured by a free governor.

“Before the grid code specified or the switch is up to like four. But we have done investigation and found out that sometimes the cripple is well over four, even up to ten, that is eating into somebody’s generation that would have fetched them money.

“So while I am not saying that spinning reserve is a solution, I believe that putting a spinning reserve and the free governor mode side by side can cure the volatility on the grid, because research shows that about hundreds of steel mills operate on our grid, and we know what steel mills does to frequency,” she said.

According to her, the association did a study and found out that 95 per cent of the time, from 2013 till date, the grid has not been in compliance with the grid code requirement of 50 hertz.

“It has always been out of frequency requirement of the grid,” she added.

Other speakers heaped bulk of the blame on TCN, insisting that the unacceptable frequency of grid collapses is due to ageing infrastructure, poor management systems, the absence of Supervisory Control and Data Acquisition (SCADA), lack of maintenance software, misplaced priority of investments into grid expansion among others, emphasising the need for unbundle the agency for enhanced service delivery.